Code of Maine Rules › 10 - DEPARTMENT OF HEALTH AND HUMAN SERVICES › 144 - DEPARTMENT OF HEALTH AND HUMAN SERVICES - GENERAL › Chapter 101 - MAINECARE BENEFITS MANUAL (FORMERLY MAINE MEDICAL ASSISTANCE MANUAL) › Chapter III - Allowances for Services › Section 144-101-III-67 - Principles of Reimbursement for Nursing Facilities › Subsection 144-101-III-67-1 - GENERAL PROVISIONS

Current through 2024-29, July 17, 2024
1.1
PURPOSE
The purpose of these principles is to provide for payment
						of nursing facility services provided under the MaineCare Program in accordance
						with Title XIX of the
Social Security Act
.
1.2
AUTHORITY
The Authority of the Department to accept and administer
						any funds which may be available from private, local, State or Federal sources
						for the provision of the services set forth in the Principles of Reimbursement
						is established in Title 22 of the
Maine Revised Statutes
						Annotated
, Sections
						10 and
						12. The regulations
						themselves are issued pursuant to authority granted to the Department by Title
						22 of the
Maine Revised Statutes Annotated
Section
						42(1).
1.3
GENERAL DESCRIPTION OF
					 THE RATE SETTING SYSTEM
A prospective case mix payment system for nursing
						facilities is established by these rules in which the payment rate for services
						is set in advance of the actual provision of those services. A nursing
						facility's base year cost report is used to review the facility's costs against
						these rules, to determine and identify which costs are allowable under this
						rule.
1.4
DEFINITIONS
Department
as used throughout these
						principles is the State of Maine Department of Health and Human
						Services.
State Licensing and Federal Certification
as
						used throughout these principles is the "Regulations Governing the Licensing
						and Functioning of Nursing Facilities" and the Federal Certification
						requirements for nursing care facilities that are in effect at the time the
						cost is incurred.
Accrual Method of Accounting
means that
						revenue is reported in the period when it is earned, regardless of when it is
						collected, and expenses are reported in the period in which they are incurred,
						regardless of when they are paid.
AICPA
is the American Institute of Certified
						Public Accountants
Allowable Costs
are costs that MaineCare
						will reimburse under these Principles of Reimbursement and that are below the
						caps (upper limits).
Ancillary Services
are medical items or
						services identifiable to a specific resident furnished at the direction of a
						physician and for which charges are customarily made in addition to the per
						diem charge.
*The Department shall submit to CMS and anticipates
						approval for a State Plan Amendment related to these provisions.
*Base Year
is a fiscal period for which the
						allowable costs are the basis for the case mix prospective rate. For the state
						fiscal year beginning July 1, 2018, the base year for each facility is its
						fiscal year that ended in the calendar year 2016. For state fiscal years
						beginning on or after July 1, 2019, subsequent rebasing must be based on the
						most recently filed cost report available by June
						1st of the re-basing year.
For the state fiscal year beginning July 1, 2018, the
						rates set for each rebasing year shall include an inflation adjustment for a
						cost-of-living percentage change in nursing facility reimbursement each year in
						accordance with the United States Department of Labor Statistics Consumer Price
						Index - medical care services index from the prior December for professional
						services, nursing home, and adult day care services.
*Base Year Costs
shall be the costs as shown
						on the cost report for the base year.
Capital Asset
is defined as services,
						equipment, supplies or purchases which have a value of $500 or greater.
Case Mix Weight
is a relative evaluation of
						the nursing resources used in the care of a given class of residents.
Cash Method of Accounting
means that
						revenues are recognized only when cash is received and expenditures for expense
						and asset items are not recorded until cash is disbursed for them.
Centers for Medicare and Medicaid Services
						(CMS)
is the agency within the U.S. Department of Health and Human
						Services (HHS) responsible for developing and implementing policies governing
						the Medicare and Medicaid programs.
Common Ownership
exists when an individual
						possesses significant ownership or equity in the provider and the institution
						or organization serving the provider.
Compensation
means total benefit provided
						for the administration and policy-planning services rendered to the provider.
						It includes:
(a) Fees, salaries,
					 wages, payroll taxes, fringe benefits, contributions to deferred compensation
					 plan, and other increments paid to or for the benefit of, those providing the
					 administration and policy-planning services;
(b) The cost of services provided by the
					 provider to, or for the benefit of, those providing the administration and
					 policy planning services, including, but not limited to food, lodging, and the
					 use of the provider's vehicles.
Consumer Price Index (CPI)
is the CPI
						published by the U.S. Department of Labor.
Control
exists where an individual or an
						organization has the power, directly or indirectly, to significantly influence
						or direct the actions or policies of an organization or institution.
Cost Finding
is the process of segregating
						costs by cost centers and allocating indirect cost to determine the cost of
						services provided.
Days of Care
are the total number of days of
						care provided whether or not payment is received and the number of any other
						days for which payment is made. (Note: Bed held days and discharge days are
						included only if payment is received for these days.)
Direct Care Base Rate
is the facility
						specific direct care cost per day as determined from the base year.
Direct Costs
are costs that are directly
						identifiable with a specific activity, service or product of the
						program.
Discrete Costing
is the specific costing
						methodology that calculates the costs associated with new additions/renovations
						of nursing facilities. None of the historical basis of costs from the original
						building are allocated to the addition/renovation.
Donated Asset
is an asset acquired without
						making any payment in the form of cash, property or services.
Experience Modifier
is the rating number
						given to nursing facilities based on worker's compensation claims submitted for
						the previous three (3) years. The lower the rating number, the better the
						worker's compensation claims ratio.
Fair Market Value
is the price that the
						asset would bring by bona fide bargaining between well-informed buyers and
						sellers at the date of acquisition. Usually the fair market price will be the
						price at which bona fide sales have been communicated for assets of like type,
						quality, and quantity in a particular market at the time of acquisition.
Fixed Cost Component
shall be determined
						based upon actual allowable costs incurred by an economically and efficiently
						operated facility.
Free Standing Facility
is a facility that is
						not hospital-affiliated.
Front Line Employees
are defined as all
						employees who work in the facility, except the administrator and contract
						labor.
Fringe Benefits
include payroll taxes,
						qualified retirement plan contributions, group health, dental, and life
						insurance, cafeteria plans and flexible spending plans.
Generally Accepted Accounting Principles
						(GAAP)
are accounting principles approved by the American Institute of
						Certified Public Accountants: those accounting principles with substantial
						authoritative support. In order of authority the following documents are
						considered GAAP:
(1) FASB standards
					 and Interpretations,
(2) APB
					 Opinions and Interpretations,
(3)
					 CAP Accounting Research Bulletins,
(4) AICPA Statements of Position,
(5) AICPA Industry Accounting and Auditing
					 Guides,
(6) FASB technical
					 Bulletins,
(7) FASB Concepts
					 statements,
(8) AICPA Issues Papers
					 and Practice Bulletins, and other pronouncements of the AICPA or
					 FASB.
Historical Cost
is the cost incurred by the
						present owner in acquiring the asset. The historical cost shall not exceed the
						lower of:
(a) current reproduction
					 cost adjusted for straight-line depreciation over the life of the asset to the
					 time of the purchase;
(b) fair
					 market value at the time of the purchase;
(c) the allowable historical cost of the
					 first owner of record on or after July 18, 1984.
In computing the historical cost the four (4) categories
						of assets will be evaluated, Land, Building, Equipment and Motor Vehicles. Each
						category will be evaluated based on the methods listed above.
Hospital-affiliated Nursing Facility
is a
						nursing facility that is a distinct part of a hospital provider, located within
						the same building as the hospital unit or licensed as a hospital facility, or
						has ambulatory care services and nursing facility beds located within the same
						building or whose nursing facility beds were previously part of a hospital and
						relocated prior to January 1, 2005.
Land
(non-depreciable) includes the land
						owned and used in provider operations. Included in the cost of the land are
						costs of such items as off-site sewer and water lines, public utility charges
						necessary to service the land, governmental assessments for street paving and
						sewers, the cost of permanent roadways and grading of a non-depreciable nature,
						the cost of curbs and sidewalks whose replacement is not the responsibility of
						the provider and other land expenditures of a nondepreciable nature.
Land Improvements
(depreciable) include
						paving, tunnels, underpasses, on-site sewer and water lines, parking lots,
						shrubbery, fences, walls, etc. (if replacement is the responsibility of the
						provider).
Leasehold Improvements
include betterments
						and additions made by the lessee to the leased property. Such improvements
						become the property of the leaser after the expiration of the lease.
MaineCare Utilization
means, for nursing
						facilities, a fraction (expressed as a percentage), the numerator of which is
						the nursing facility's number of MaineCare days attributable to MaineCare
						patients whose claims were reimbursed for those days, and the denominator of
						which is the total number of the nursing facility's days of care for that
						period.
MDS
is the Minimum Data Set currently
						specified by the Centers for Medicare and Medicaid Services for use by Nursing
						Facilities.
Necessary and Proper Costs
are for services
						and items that are essential to provide appropriate resident care and
						activities at an efficient and economically operated facility. They are costs
						for services and items that are commonly provided and are commonly accepted as
						essential for the type of facility in question.
Net Book Value
of an asset is the
						depreciable basis used under the program by the asset's last participation
						owner less the depreciation recognized under the program.
Nursing Facility
is a nursing home facility
						licensed and certified for participation in the MaineCare Program by the State
						of Maine.
OBRA Assessment
is the assessment defined by
						CMS as a schedule of assessments performed for a nursing facility resident at
						admission, quarterly, and annually, whenever the resident experiences a
						significant change in status, and whenever the facility identifies a
						significant error in a prior assessment. This assessment is the active
						assessment instrument used for evaluating members during their stay in a
						nursing facility. Reimbursement is based on these assessment outcomes. With the
						exception of the admission assessment, the active OBRA assessment sets the
						payment from the Assessment Reference Date (ARD) until the day before the ARD
						on the next required OBRA assessment. The admission assessment sets payment
						from the admission date until the next required OBRA assessment.
Owners
include any individual or
						organization with ten percent (10%) equity interest in the provider's operation
						and any members of such individual's family or his or her spouse's family.
						Owners also include all partners and all stockholders in the provider's
						operation and all partners and stockholders or organizations that have an
						equity interest in the provider's operation.
Per Diem Rate
is the total allowable costs
						divided by days of care. The prospective per diem rate, as described by days of
						care for MaineCare members, will determine reimbursement.
Policy Planning Function
includes the
						policy-making, planning and decision-making activities necessary for the
						general and long-term management of the affairs of the facility, including, but
						not limited to the following:
(a) the
					 financial management of the facility;
(b) the establishment of personnel
					 policies;
(c) the planning of
					 resident admission policies;
(d)
					 the planning of expansion and financing thereof.
Prospective Case-Mix Reimbursement System
is
						a method of paying health care providers rates that are established in advance.
						These rates take into account the fact that some residents are more costly to
						care for than others.
Publicly Owned Nursing Facility
must be
						owned and operated by the State, City, Town, or other local government entity
						and be receiving funding from that public entity for the purposes of operating
						and providing nursing facility services to the residents of the
						facility.
Reasonable Costs
are those services and
						items for which a prudent and cost-conscious buyer would pay and which are
						essential for resident care and activities at the facility. If any of a
						provider's costs are determined to exceed by a significant amount, those that a
						prudent and costconscious buyer would have paid, those costs of the provider
						will be considered unreasonable in the absence of a showing by the provider
						that those costs were unavoidable.
Related to Provider
means that the provider
						to a significant extent is associated or affiliated by common ownership with or
						has control of or is controlled by the organization furnishing the services,
						facilities, and supplies.
Stand Alone Nursing Facility
is a facility
						that is not physically located within a hospital.
State Assistance
as used in throughout these
						principles is the amount of funds appropriated by the Legislature in a specific
						State Fiscal Year for the purpose of assisting in the reimbursement of publicly
						owned nursing facilities for services provided to their residents.
State Fiscal Year
is defined as July
						1st of the first year through June
						30th of the second year. Example: State fiscal year
						05-06 begins July 1st of 2005 and ends June
						30th of 2006.
Straight-line Method
is a method of
						depreciation whereby the cost or other basis (e.g., fair market value in the
						case of a donated asset) of an asset, less its estimated salvage value, if any,
						is determined first. This amount is then distributed in equal amounts over the
						period of the estimated useful life of the asset.
Total Allowable Inflated Direct Care Rate Per
						Day
is the facility base year direct care costs divided by the days of
						care, adjusted for case mix and wages and held to the direct care upper limit
						and inflated based on Principle 91 of these Principles.
Total Resident Census
is the total number of
						residents residing in a nursing facility during the facility's fiscal
						year.