§ 1187.96. Price- and rate-setting computations.
(a) Using the NIS database in accordance with this subsection and § 1187.91 (relating to database), the Department will set prices for the resident care cost category.
(1) The Department will use each nursing facility’s cost reports in the NIS database to make the following computations:
(i) The total resident care cost for each cost report will be divided by the total facility CMI from the available February 1 picture date closest to the midpoint of the cost report period to obtain case-mix neutral total resident care cost for the cost report year.
(ii) The case-mix neutral total resident care cost for each cost report will be divided by the total actual resident days for the cost report year to obtain the case-mix neutral resident care cost per diem for the cost report year.
(iii) The Department will calculate the 3-year arithmetic mean of the case-mix neutral resident care cost per diem for each nursing facility to obtain the average case-mix neutral resident care cost per diem of each nursing facility.
(2) The average case-mix neutral resident care cost per diem for each nursing facility will be arrayed within the respective peer groups, and a median determined for each peer group.
(3) For rate years 2006-2007, 2007-2008, 2009-2010, 2010-2011 and 2011-2012, the median used to set the resident care price will be the phase-out median as determined in accordance with § 1187.98 (relating to phase-out median determination).
(4) The median of each peer group will be multiplied by 1.17, and the resultant peer group price assigned to each nursing facility in the peer group.
(5) The price derived in paragraph (4) for each nursing facility will be limited by § 1187.107 (relating to limitations on resident care and other resident related cost centers) and the amount will be multiplied each quarter by the respective nursing facility MA CMI to determine the nursing facility resident care rate. The MA CMI picture date data used in the rate determination are as follows: July 1 rate—February 1 picture date; October 1 rate—May 1 picture date; January 1 rate—August 1 picture date; and April 1 rate—November 1 picture date.
(6) For rate years 2010-2011, 2011-2012 and 2012-2013, unless the nursing facility is a new nursing facility, the resident care rate used to establish the nursing facility’s case-mix per diem rate will be a blended resident care rate.
(i) The nursing facility’s blended resident care rate for the 2010-2011 rate year will equal 75% of the nursing facility’s 5.01 resident care rate calculated in accordance with subparagraph (iv) plus 25% of the nursing facility’s 5.12 resident care rate calculated in accordance with subparagraph (iv).
(ii) The nursing facility’s blended resident care rate for the 2011-2012 rate year will equal 50% of the nursing facility’s 5.01 resident care rate calculated in accordance with subparagraph (v) and 50% of the nursing facility’s 5.12 resident care rate calculated in accordance with subparagraph (v).
(iii) The nursing facility’s blended resident care rate for the 2012-2013 rate year will equal 25% of the nursing facility’s 5.01 resident care rate calculated in accordance with subparagraph (v) and 75% of the nursing facility’s 5.12 resident care rate calculated in accordance with subparagraph (v).
(iv) For the rate year 2010-2011, each nursing facility’s blended resident care rate will be determined based on the following calculations:
(A) For the first quarter of the rate year (July 1, 2010—September 30, 2010), the Department will calculate each nursing facility’s blended resident care rate as follows:
(I) The Department will calculate a 5.12 resident care rate for each nursing facility in accordance with paragraphs (1)—(5). The CMI values the Department will use to determine each nursing facility’s total facility CMIs and facility MA CMI, computed in accordance with § 1187.93 (relating to CMI calculations), will be the RUG-III version 5.12 44 group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent classifiable resident assessment of any type.
(II) The Department will calculate a 5.01 resident care rate for each nursing facility in accordance with paragraphs (1)—(5). The CMI values the Department will use to determine each nursing facility’s total facility CMIs and facility MA CMI, computed in accordance with § 1187.93, will be the RUG-III version 5.01 44-group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent comprehensive resident assessment.
(III) The nursing facility’s blended resident care rate for the quarter beginning July 1, 2010, and ending September 30, 2010, will be the sum of the nursing facility’s 5.01 resident care rate multiplied by 0.75 and the nursing facility’s 5.12 resident care rate multiplied by 0.25.
(B) For the remaining 3 quarters of the 2010-2011 rate year (October 1 through December 31; January 1 through March 31; April 1 through June 30), the Department will calculate each nursing facility’s blended resident care rate as follows:
(I) The Department will calculate a quarterly adjusted 5.12 resident care rate for each nursing facility in accordance with paragraph (5). The CMI values used to determine each nursing facility’s MA CMI, computed in accordance with § 1187.93, will be the RUG-III version 5.12 44 group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent classifiable resident assessment of any type.
(II) The Department will calculate a quarterly adjusted 5.01 resident care rate for each nursing facility by multiplying the nursing facility’s prior quarter 5.01 resident care rate by the percentage change between the nursing facility’s current quarter 5.12 resident care rate and the nursing facility’s previous quarter 5.12 resident care rate. The percentage change will be determined by dividing the nursing facility’s current quarter 5.12 resident care rate by the nursing facility’s previous quarter 5.12 resident care rate.
(III) The nursing facility’s blended resident care rate for the 3 remaining quarters of the rate year will be the sum of the nursing facility’s quarterly adjusted 5.01 resident care rate multiplied by 0.75 and the nursing facility’s quarterly adjusted 5.12 resident care rate multiplied by 0.25.
(v) For rate years 2011-2012 and 2012-2013, each nursing facility’s blended resident care rate will be determined based on the following calculations:
(A) For the first quarter of each rate year (July 1—September 30), the Department will calculate each nursing facility’s blended resident care rate as follows:
(I) The Department will calculate a 5.12 resident care rate for each nursing facility in accordance with paragraphs (1)—(5). The CMI values used to determine each nursing facility’s total facility CMIs and facility MA CMI, computed in accordance with § 1187.93, will be the RUG-III version 5.12 44 group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent classifiable resident assessment of any type.
(II) The Department will calculate a 5.01 resident care rate for each nursing facility by multiplying the nursing facility’s prior April 1st quarter 5.01 resident care rate by the percentage change between the nursing facility’s current 5.12 resident care rate and the nursing facility’s prior April 1st quarter 5.12 resident care rate. The percentage change will be determined by dividing the nursing facility’s current 5.12 resident care by the nursing facility’s April 1st quarter 5.12 resident care rate.
(III) The nursing facility’s blended resident care rate for the quarter beginning July 1, 2011, and ending September 30, 2011, will be the sum of the nursing facility’s 5.01 resident care rate multiplied by 0.50 and the nursing facility’s 5.12 resident care rate multiplied by 0.50.
(IV) The nursing facility’s blended resident care rate for the quarter beginning July 1, 2012, and ending September 30, 2012, will be the sum of the nursing facility’s 5.01 resident care rate multiplied by 0.25 and the nursing facility’s 5.12 resident care rate multiplied by 0.75.
(B) For the remaining 3 quarters of each rate year (October 1 through December 31; January 1 through March 31; April 1 through June 30), the Department will calculate each nursing facility’s blended resident care rate as follows:
(I) The Department will calculate a quarterly adjusted 5.12 resident care rate for each nursing facility in accordance with paragraph (5). The CMI values used to determine each nursing facility’s MA CMI, computed in accordance with § 1187.93, will be the RUG-III version 5.12 44 group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent classifiable resident assessment of any type.
(II) The Department will calculate a quarterly adjusted 5.01 resident care rate for each nursing facility by multiplying the nursing facility’s prior quarter 5.01 resident care rate by the percentage change between the nursing facility’s current quarter 5.12 resident care rate and the nursing facility’s previous quarter 5.12 resident care rate. The percentage change will be determined by dividing the nursing facility’s current quarter 5.12 resident care rate by the nursing facility’s previous quarter 5.12 resident care rate.
(III) For the remaining 3 quarters of rate year 2011-2012 (October 1 through December 31; January 1 through March 31; April 1 through June 30), each nursing facility’s blended resident care rate will be the sum of the nursing facility’s quarterly adjusted 5.01 resident care rate multiplied by 0.50 and the nursing facility’s quarterly adjusted 5.12 resident care rate multiplied by 0.50.
(IV) For the remaining 3 quarters of rate year 2012-2013 (October 1 through December 31; January 1 through March 31; April 1 through June 30), each nursing facility’s blended resident care rate will be the sum of the nursing facility’s quarterly adjusted 5.01 resident care rate multiplied by 0.25 and the facility’s quarterly adjusted 5.12 resident care rate multiplied by 0.75.
(7) Beginning with rate year 2013-2014, and thereafter, the Department will calculate each nursing facility’s resident care rate in accordance with paragraphs (1)—(5). The CMI values used to determine each nursing facility’s total facility CMIs and facility MA CMI, computed in accordance with § 1187.93, will be the RUG-III version 5.12 44 group values as set forth in Appendix A. The resident assessment that will be used for each resident will be the most recent classifiable resident assessment of any type.
(b) Using the NIS database in accordance with this subsection and § 1187.91, the Department will set prices for the other resident related cost category.
(1) The Department will use each nursing facility’s cost reports in the NIS database to make the following computations:
(i) The total other resident related cost for each cost report will be divided by the total actual resident days for the cost report year to obtain the other resident related cost per diem for the cost report year.
(ii) The Department will calculate the 3-year arithmetic mean of the other resident related cost for each nursing facility to obtain the average other resident related cost per diem of each nursing facility.
(2) The average other resident related cost per diem for each nursing facility will be arrayed within the respective peer groups and a median determined for each peer group.
(3) For rate years 2006-2007, 2007-2008, 2009-2010, 2010-2011 and 2011-2012, the median used to set the other resident related price will be the phase-out median as determined in accordance with § 1187.98.
(4) The median of each peer group will be multiplied by 1.12, and the resultant peer group price assigned to each nursing facility in the peer group. This price for each nursing facility will be limited by § 1187.107 to determine the nursing facility other resident related rate.
(c) Using the NIS database in accordance with this subsection and § 1187.91, the Department will set prices for the administrative cost category.
(1) The Department will use each nursing facility’s cost reports in the NIS database to make the following computations:
(i) The total actual resident days for each cost report will be adjusted to a minimum 90% occupancy, if applicable, in accordance with § 1187.23 (relating to nursing facility incentives and adjustments).
(ii) The total allowable administrative cost for each cost report will be divided by the total actual resident days, adjusted to 90% occupancy, if applicable, to obtain the administrative cost per diem for the cost report year.
(iii) The Department will calculate the 3-year arithmetic mean of the administrative cost for each nursing facility to obtain the average administrative cost per diem of each nursing facility.
(2) The average administrative cost per diem for each nursing facility will be arrayed within the respective peer groups and a median determined for each peer group.
(3) For rate years 2006-2007, 2007-2008, 2009-2010, 2010-2011 and 2011-2012, the median used to set the administrative price will be the phase-out median as determined in accordance with § 1187.98.
(4) The median of each peer group will be multiplied by 1.04, and the resultant peer group price will be assigned to each nursing facility in the peer group to determine the nursing facility’s administrative rate.
(d) Using the NIS database in accordance with this subsection and § 1187.91, the Department will set a rate for the capital cost category for each nursing facility by adding the nursing facility’s fixed property component, movable property component and real estate tax component and dividing the sum of the three components by the nursing facility’s total actual resident days, adjusted to 90% occupancy, if applicable.
(1) The Department will determine the fixed property component of each nursing facility’s capital rate as follows:
(i) The Department will multiply the total number of the nursing facility’s allowable beds as of April 1, immediately preceding the rate year, by $26,000 to determine the nursing facility’s allowable fixed property cost.
(ii) The Department will multiply the result by the financial yield rate.
(2) The Department will determine the movable property component of each nursing facility’s capital rate based on the audited actual costs of major movable property as set forth in the most recent audited MA-11 cost report available in the NIS database in accordance with § 1187.91. This amount is referred to as the nursing facility’s allowable movable property cost.
(3) The Department will determine the real estate tax cost component of each nursing facility’s capital rate based on the audited actual real estate tax cost as set forth in the most recent audited MA-11 cost report available in the NIS database.
(e) The following applies to the computation of nursing facilities’ per diem rates:
(1) The nursing facility per diem rate will be computed by adding the resident care rate, the other resident related rate, the administrative rate and the capital rate for the nursing facility.
(2) For each quarter of the 2006-2007 and 2007-2008 rate-setting years, the nursing facility per diem rate will be computed as follows:
(i) Generally. If a nursing facility is not a new nursing facility or a nursing facility experiencing a change of ownership during the rate year, that nursing facility’s resident care rate, other resident related rate, administrative rate and capital rate will be computed in accordance with subsections (a)—(d) and the nursing facility’s per diem rate will be the sum of those rates multiplied by a budget adjustment factor determined in accordance with subparagraph (iv).
(ii) New nursing facilities. If a nursing facility is a new nursing facility for purposes of § 1187.97(1) (relating to rates for new nursing facilities, nursing facilities with a change of ownership, reorganized nursing facilities and former prospective payment nursing facilities) that nursing facility’s resident care rate, other resident related rate, administrative rate and capital rate will be computed in accordance with § 1187.97(1), and the nursing facility’s per diem rate will be the sum of those rates multiplied by a budget adjustment factor determined in accordance with subparagraph (iv).
(iii) Nursing facilities with a change of ownership and reorganized nursing facilities. If a nursing facility undergoes a change of ownership during the rate year, that nursing facility’s resident care rate, other resident related rate, administrative rate and capital rate will be computed in accordance with § 1187.97(2), and the nursing facility’s per diem rate will be the sum of those rates multiplied by a budget adjustment factor determined in accordance with subparagraph (iv).
(iv) Budget adjustment factor. The budget adjustment factor for the rate year will be determined in accordance with the formula set forth in the Commonwealth’s approved State Plan.
(3) For rate years 2010-2011, 2011-2012 and 2012-2013, unless the nursing facility is a new nursing facility, the nursing facility per diem rate will be computed by adding the blended resident care rate, the other resident related rate, the administrative rate and the capital rate for the nursing facility.
Authority The provisions of this § 1187.96 amended under sections 201(2), 206(2), 403(b), 443.1(5) and 454 of the Public Welfare Code (62 P. S. § § 201(2), 206(2), 403(b), 443.1(5) and 454).
Source The provisions of this § 1187.96 amended February 8, 2002, effective July 1, 2001, 32 Pa.B. 734; amended November 11, 2005, effective July 1, 2005, 35 Pa.B. 6232; amended June 23, 2006, effective July 1, 2006, 36 Pa.B. 3207; amended November 26, 2010, effective November 27, 2010, 40 Pa.B. 6782; amended August 26, 2011, effective retroactive to July 1, 2010, 41 Pa.B. 4630; corrected February 3, 2012, effective February 5, 2011, 42 Pa.B 673. Immediately preceding text appears at serial pages (358354) to (358361).
Notes of Decisions Nursing facilities alleged that legislative bill authorizing Department of Public Welfare to adopt regulations to control increases in payment rates to nursing facilities was unconstitutional and Department regulations adopted under such authority were void; legislative standards in the State Welfare Code and Federal Medicaid Act properly delegate lawmaking power to Department and are adequate to guide and restrain its discretion in establishing payment methodology. Christ v. Department of Public Welfare, 911 A.2d 624, 642—643 (Pa. Cmwlth. 2006).
Cross References This section cited in 55 Pa. Code § 1187.80 (relating to failure to file an MA-11); 55 Pa. Code § 1187.93 (relating to CMI calculations); 55 Pa. Code § 1187.91 (relating to database); 55 Pa. Code § 1187.95 (relating to general principles for rate and price setting); 55 Pa. Code § 1187.97 (relating to rates for new nursing facilities, nursing facilities with a change of ownership, reorganized nursing facilities, and former prospective payment nursing facilities); 55 Pa. Code § 1187.98 (relating to phase-out median determination); 55 Pa. Code § 1187.104 (relating to limitations on payment for reserved beds); and 55 Pa. Code § 1187.141 (relating to nursing facility’s right to appeal and to a hearing).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
