Indiana Administrative Code › Title 405 - OFFICE OF THE SECRETARY OF FAMILY AND SOCIAL SERVICES › Article 1 - MEDICAID PROVIDERS AND SERVICES › Rule 14.6 - Rate-Setting Criteria for Nursing Facilities › Section 14.6-7 - Inflation adjustment; minimum occupancy level; case mix indices

Current through July 10, 2024
Authority: IC
				  12-15-1-10; IC
				  12-15-21-2
Affected: IC
				  12-13-7-3; IC
				  12-15-13-6
Sec. 7.
(a) For
				purposes of determining the average allowable cost of the median patient day
				and a provider's annual rate review, each provider's cost from the most recent
				completed year will be adjusted for inflation by the office using the
				methodology in this subsection. All allowable costs of the provider, except for
				mortgage interest on facilities and equipment, depreciation on facilities and
				equipment, rent or lease costs for facilities and equipment, and working
				capital interest shall be adjusted for inflation using the CMS Nursing Home
				without Capital Market Basket index as published by IHS. The inflation
				adjustment shall apply from the midpoint of the annual financial report period
				to the midpoint prescribed as follows:
Effective Date
Midpoint Quarter
January 1, Year 1
July 1, Year 1
April 1, Year 1
October 1, Year 1
July 1, Year 1
January 1, Year 2
October 1, Year 1
April 1, Year 2
(b)
				Notwithstanding subsection (a), beginning July 1, 2019, the inflation
				adjustment determined as prescribed in subsection (a) shall be reduced by an
				inflation reduction factor equal to three and three-tenths percent (3.3%). The
				resulting inflation adjustment shall not be less than zero (0). Any reduction
				or elimination of the inflation reduction factor shall be made effective no
				earlier than permitted under IC
				12-15-13-6(a).
(c) In determining prospective allowable
				costs for a new provider that has undergone a change of provider ownership or
				control through an arm's-length transaction between unrelated parties, when the
				first fiscal year end following the change of provider ownership or control is
				less than six (6) full calendar months, the previous provider's most recently
				completed annual financial report used to establish a Medicaid rate for the
				previous provider shall be utilized to calculate the new provider's first
				annual rate review. The inflation adjustment for the new provider's first
				annual rate review shall be applied from the midpoint of the previous
				provider's most recently completed annual financial report period to the
				midpoint prescribed under subsection (a).
(d) Allowable fixed costs per patient day for
				direct care, indirect care, and administrative costs shall be computed based on
				the following minimum occupancy levels:
(1)
				For nursing facilities with less than fifty-one (51) beds, an occupancy rate
				equal to the greater of eighty-five percent (85%) or the provider's actual
				occupancy rate from the most recently completed historical period.
(2) For nursing facilities with greater than
				fifty (50) beds, an occupancy rate equal to the greater of ninety percent (90%)
				or the provider's actual occupancy rate from the most recently completed
				historical period.