CO Code § 25.5-6-201 (2021)
2021 Colorado Code|Title 25.5 - Health Care Policy and Financing|Article 6 - Colorado Medical Assistance Act - Long-Term Care|Part 2 - Nursing Facilities|§ 25.5-6-201. Special Definitions Relating to Nursing Facility Reimbursement

 As used in this part 2, unless the context otherwise requires:    “Acquisition cost” means the actual allowable cost to the owners of a capital-related asset or any improvement thereto as determined in accordance with generally accepted accounting principles.    “Actual cost” or “cost” means the audited cost of providing services.    “Administration and general services costs” means costs in the following categories:   Advertising, recruitment, and public relations, to the extent that such costs are necessary, reasonable, and patient-related;    Travel and training of facility staff, unless the travel includes residents of the facility or the training is for the facility staff described in paragraph (a) of subsection (15) of this section; and    All other costs that are not direct or indirect health-care services, raw food costs, or capital-related assets.       “Appraised value” means the determination by a qualified appraiser who is a member of an institute of real estate appraisers, or its equivalent, of the depreciated cost of replacement of a capital-related asset to its current owner. The depreciated replacement appraisal must be based on a nationally recognized valuation system determined by the state department. The depreciated cost of replacement appraisal must be redetermined at least every four years by new appraisals of the nursing facilities. The new appraisals must be based upon rules promulgated by the state board.    “Array of facility providers” means a listing in order from lowest per diem cost facility to highest for that category of costs or rates, as may be applicable, of all medicaid-participating nursing facility providers in the state.      “Base value” means:   For the fiscal year 1986-87 and every fourth year thereafter, the appraised value of a capital-related asset;    For each year in which an appraisal is not done pursuant to subparagraph (I) of this paragraph (a), the most recent appraisal together with fifty percent of any increase or decrease each year since the last appraisal, as reflected in the index.       For the fiscal year 1985-86, the base value shall not exceed twenty-five thousand dollars per licensed bed at any participating facility, and, for each succeeding fiscal year, the base value shall not exceed the previous year's limitation adjusted by any increase or decrease in the index.    An improvement to a capital-related asset, which is an addition to that asset, as defined by rules adopted by the state board, shall increase the base value by the acquisition cost of the improvement.       “Capital-related asset” means the land, buildings, and fixed equipment of a participating facility.    “Case-mix” means a relative score or weight assigned for a given group of residents based upon their levels of resources, consumption, and needs.    “Case-mix adjusted direct health-care services costs” means those costs comprising the compensation, salaries, bonuses, workers' compensation, employer-contributed taxes, and other employment benefits attributable to a nursing facility provider's direct care nursing staff whether employed directly or as contract employees, including but not limited to registered nurses, licensed practical nurses, and nurses' aides. (9.5) “Case-mix group” means the system determined by the state department for grouping a nursing facility's residents according to their clinical and functional status as identified from data supplied by the facility's minimum data set as published by the United States department of health and human services.    “Case-mix index” means a numeric score assigned to each nursing facility resident based upon a resident's physical and mental condition that reflects the amount of relative resources required to provide care to that resident.    “Case-mix neutral” means the direct health-care costs of all facilities adjusted to a common case-mix.    “Case-mix reimbursement” means a payment system that reimburses each facility according to the resource consumption in treating its case-mix of medicaid residents, which case-mix may include such factors as the age, health status, resource utilization, and diagnoses of the facility's medicaid residents as further specified in this section.    “Class I facility” means a private for-profit or not-for-profit nursing facility provider or a facility provider operated by the state of Colorado, a county, a city and county, or special district that provides general skilled nursing facility care to residents who require twenty-four-hour nursing care and services due to their ages, infirmity, or health-care conditions, including residents who are behaviorally challenged by virtue of a severe behavioral or mental health disorder.    “Direct health-care services costs” means those costs subject to case-mix adjusted direct health-care services costs.    “Direct or indirect health-care services costs” means the costs incurred for patient support services, including the following:   Salaries, payroll taxes, workers' compensation payments, training, and other employee benefits for registered nurses, licensed practical nurses, aides, medical records librarians, social workers, and activity personnel;    Nonprescription drugs ordered by a physician;    Consultant fees for nursing, medical records, patient activities, social workers, pharmacies, physicians, and therapies;    Purchases, rentals, and costs incurred to operate, maintain, or repair health- care equipment;    Supplies for nurses, medical records personnel, social workers, activity personnel, and therapy personnel;    Medical director fees;    Therapies and other medically related services, including the following:   Utilization review;    Dental care, when required by federal law;    Audiology;    Psychology;    Physical therapy;    Recreational therapy;    Occupational therapy; and    Speech therapy;       Other patient support services determined and defined by the state board pursuant to rule;    Raw food costs that do not include the costs of equipment, staff, or other costs associated with meal preparation;    Malpractice insurance;    Depreciation and interest for major health-care equipment, such as equipment purchased for the sole purpose of providing care to facility residents; and    Photocopying related to health-care purposes such as medical records of patients. (15.5) “Eligible nursing facility provider” means a nursing facility provider that is located:   Within the jurisdiction of a local government that has increased its local minimum wage above the statewide minimum wage; or    Adjacent to a local government that has increased its local minimum wage above the statewide minimum wage and the nursing facility has voluntarily agreed to raise the wage of all employees to the same amount and in the same manner as the adjacent local government.          “Facility population distribution” means the number of Colorado nursing facility residents who are classified into each case-mix group as of a specific point in time.    “Fair rental allowance” means the product obtained by multiplying the base value of a capital-related asset by the rental rate.    “Improvement” means the addition to a capital-related asset of land, buildings, or fixed equipment.    “Index” means the RSMeans construction systems cost index or an equivalent index that is based upon a survey of prices of common building materials and wage rates for nursing home construction.    “Index maximization” means classifying a resident who could be assigned to more than one category to the category with the highest case-mix index. (20.5) “Local minimum wage enhancement payment” means a supplemental payment to an eligible nursing facility provider that is subject to available appropriations and not a rate enhancement.    “Median per diem cost” means the average daily cost of care and services per patient for the nursing facility provider that represents the middle of all of the arrayed facilities participating as providers or as the number of arrayed facilities may dictate, the mean of the two middle providers.    “Minimum data set” means a set of screening, clinical, and functional status elements that are used in the assessment of a nursing facility provider's residents under the federal medicare and medicaid programs.    “Normalization ratio” means the statewide average case-mix index divided by the facility's cost report period case-mix index.    “Normalized” means multiplying the nursing facility provider's per diem case-mix adjusted direct health-care services cost by its case-mix index normalization ratio for the purpose of making the per diem cost comparable among facilities based upon a common case-mix in order to determine the maximum allowable reimbursement limitation.    “Nursing facility provider” means a facility provider that meets the state nursing home licensing standards established pursuant to section 25-1.5-103 (1)(a), C.R.S., and is maintained primarily for the care and treatment of inpatients under the direction of a physician.    “Nursing salary ratios” means the relative difference in hourly wages of registered nurses, licensed practical nurses, and nurses' aides.    “Nursing weights” means numeric scores assigned to each category of the case-mix groups that measure the relative amount of resources required to provide nursing care to a nursing facility provider's residents.    “Occupancy-imputed days” means the use of a predetermined number for patient days rather than actual patients days in computing per diem cost.    “Per diem cost” means the daily cost of care and services per patient for a nursing facility provider.    “Per diem rate” means the daily dollar amount of reimbursement that the state department shall pay a nursing facility provider per patient.    “Provider fee” means a licensing fee, assessment, or other mandatory payment that is related to health-care items or services as specified under 42 CFR 433.55.    “Raw food” means the products and substances, including but not limited to nutritional supplements, that are consumed by residents.    “Rental rate” means the average annualized composite rate for United States treasury bonds issued for periods of ten years and longer plus two percent. The rental rate shall not exceed ten and three-quarters percent nor fall below eight and one-quarter percent.    Repealed.    “Statewide average per diem rate” means the average daily dollar amount of the per patient payments to all medicaid-participating facility providers in the state.    “Supplemental medicaid payment” means a lump sum payment that is made in addition to a provider's per diem rate. A supplemental medicaid payment is calculated on an annual basis using historical data and paid as a fixed monthly amount with no retroactive adjustment.      History. Source: L. 2006: Entire article added with relocations, p. 1924, § 7, effective July 1. L. 2008: Entire section R&RE, p. 1773, § 2, effective July 1. L. 2009: (36) added,(SB 09-263), ch. 203, p. 914, § 1, effective May 1. L. 2017: (13) amended,(SB 17-242), ch. 263, p. 1329, § 207, effective May 25. L. 2019: (15.5) and (20.5) added,(HB 19-1210), ch. 320, p. 2976, § 6, effective January 1, 2020. L. 2021: (4), (16), and (27) amended, (9.5) added, and (34) repealed,(HB 21-1227), ch. 192, p. 1015, § 2, effective September 7.    Editor's note:   This section is similar to former § 26-4-502 as it existed prior to 2006.   Cross references:   For the legislative declaration contained in the 2008 act repealing and reenacting this section, see section 1 of chapter 383, Session Laws of Colorado 2008. For the legislative declaration in SB 17-242, see section 1 of chapter 263, Session Laws of Colorado 2017. For the legislative declaration in HB 19-1210, see section 1 of chapter 320, Session Laws of Colorado 2019.   ANNOTATION   The department's rule assigning 25 of the variables required under the Boeckh system as default variables is consistent with the general assembly's mandate that the Boeckh system be the method used for property assessments. Thus, the administrative law judge did not have authority to require three of the variables assigned as default variables to be specifically calculated. State Dept. of Soc. Servs. v. Hillhaven Corp., 923 P.2d 129 (Colo. App. 1995) (decided prior to the 2006 amendments relocating article 4 of title 26 to title 25.5).