Hawaii Administrative Rules › Title 17 - DEPARTMENT OF HUMAN SERVICES › Department of Human Services › Chapter 1739.2 - AUTHORIZATION, PAYMENT, AND CLAIMS IN THE FEE-FOR-SERVICE MEDICAL ASSISTANCE PROGRAM - LONG TERM CARE PROSPECTIVE PAYMENT SYSTEM › Exhibit A - ACUITY BASED LONG TERM CARE REIMBURSEMENT RATES (JULY 2003)

Current through June, 2024
A new price based reimbursement system with three components
				  (direct care, administrative and capital) will determine the rates paid to
				  nursing facilities. The direct care component will be acuity based (adjusted
				  for the average acuity of all of the patients in each facility).
The case mix system is based on the thirty-four III
				  classification methodology similar to that which will be employed to calculate
				  the acuity based portion of the long term care reimbursement rates. The system
				  is price-based, with periodic evaluation of the price level of the rate
				  components. An adjustment for case mix will be applied periodically to the
				  direct care price component.
The acuity based portion of the reimbursement system applies
				  the average case mix of all of the patients in each provider's facility to the
				  direct care price to arrive at an acuity adjusted direct care component for
				  each provider. The resulting acuity adjusted direct care component will be
				  combined with the other price components to establish the rate for that
				  provider. This rate will be adjusted periodically when the acuity scores are
				  compiled. The rate established will be used for all patient days billed to
				  Medicaid for that period. After the initial phase in period there will no
				  longer be a distinction between level A and level C acuity as the new
				  thirty-four group RUG-III system will replace the old classification system.
				  The standard price components for direct care, general and administrative, and
				  capital were derived from the most current Medicare cost reports available on
				  June 30, 2001 and inflated using from the midpoint of the cost report period to
				  the midpoint of the FY 03 rate year using DRI. A statewide standard price for
				  the direct care component is calculated using the cost reports for all
				  facilities and their respective case mix indices.
Calculation of the facility specific case mix index is based
				  on data from the Minimum Data Set (MDS), a component of the federally mandated
				  Resident Assessment Instrument, to classify residents into one of thirty-four
				  mutually exclusive groups representing the residents' relative direct care
				  resource requirements. The average case mix index of all of the residents of
				  the facility at various points in time (snapshots) is then applied to the
				  direct care component for each facility. The facility's Medicaid acuity based
				  reimbursement rate is the direct care component adjusted by the facility's case
				  mix index for all residents, to which is added the general and administrative
				  component, and the capital component.
Parameters of the New Rate Setting
				  Methodology
The new rate setting methodology uses a price based system
				  with the following parameters:
Rate Component
Component Price set at
Myers & Stauffer calculated amount for rate period
							 ending 6/30/2003
Case - Mix Adjusted
Direct care
110% of Median
$102.19
Yes
Administrative & General
103% of Median
$61.83
No
Capital
Median
$13.04
No
The price parameters listed above (110% of median for direct
				  care, 103% of the median for administrative and general and the median for
				  capital) will remain constant for all future rate setting periods. The prices
				  listed above ($102.19 for direct care, $61.83 for administrative and general
				  and $13.04 for capitol) reflect prices that relate to the rate period beginning
				  July 1, 2002 and ending June 30, 2003. Therefore, those prices will need to be
				  updated for each subsequent rate period before they can be used in the rate
				  setting process for those periods. They will be updated by the full inflation
				  factor for each period, as determined by the inflation
				  adjustment.