Virginia Administrative Code › Title 12 - HEALTH › Agency 30 - DEPARTMENT OF MEDICAL ASSISTANCE SERVICES › Chapter 90 - METHODS AND STANDARDS FOR ESTABLISHING PAYMENT RATES FOR LONG-TERM CARE › Part III - Nursing Home Payment System Appendices › Appendix IV - Resource Utilization Groups (RUGs) › Section 12VAC30-90-307 - Applicability of case-mix indices (CMI)

Current through Register Vol. 40, No. 24, July 15, 2024
A. The CMI shall be used to adjust the direct
					 patient care cost ceilings and rates for application to individual nursing
					 facilities. Indirect patient care cost ceilings and rates shall not be case-mix
					 adjusted. The CMI shall be calculated using MDS data taken from picture dates
					 as specified in this section.
B.
					 When a facility's direct patient care cost ceiling is compared to its facility
					 specific direct patient care cost rate to determine the direct patient care
					 prospective rate, both the ceiling and the rate shall be case-mix neutral. The
					 direct patient care cost ceiling shall be case-mix neutral because it shall be
					 calculated using base year facility direct patient care cost data that have
					 been case-mix neutralized. To accomplish this neutralization, each facility's
					 base year direct patient care operating cost shall be divided by the facility's
					 average normalized Medicaid CMI developed for the two semiannual periods of
					 assessment data that most closely match the provider's cost reporting year that
					 ends in the base year (see Table IV below). This shall be the facility's
					 case-mix neutral direct patient care per diem for the base year and shall be
					 used in the calculation of the peer group direct patient care cost ceilings.
					 Table IV shows an example of the picture dates used to case-mix neutralize
					 facility specific direct costs for the ceiling calculation. For the first few
					 provider fiscal years for which cost neutralization will be done, a data
					 limitation affects the picture dates that can be used. Accurate case-mix data
					 are available starting with the fourth quarter of calendar year (CY) 1999. For
					 providers with cost reporting periods ending during the first, second, and
					 third quarters of CY 2000, the picture dates used in cost neutralization shall
					 be modified to reflect only accurate case-mix data. For provider cost reporting
					 periods ending in the fourth quarter of 2000 and afterward, this limitation no
					 longer exists and assessment data shall be used that most closely match the
					 cost reporting period.
Table IV
Quarter of Provider Cost Report Year End
Picture Dates Used to Neutralize Costs
								for Ceiling Calculation
Preferred Picture Dates if No Data Limitation
								Applied
Picture Dates That Shall be Used Due to Data
								Limitation
First Quarter of CY 2000
3/31/99, 6/30/99, 9/30/99, 12/31/99
12/31/99
Second Quarter of CY 2000
6/30/99, 9/30/99, 12/31/99, 3/31/00
12/31/99, 3/31/00
Third Quarter of CY 2000
9/30/99, 12/31/99, 3/31/00, 6/30/00
12/31/99, 3/31/00, 6/30/00
Fourth Quarter of CY 2000
12/31/99, 3/31/00, 6/30/00, 9/30/00
12/31/99, 3/31/00, 6/30/00, 9/30/00
C. When direct patient care prospective rates
					 are set, the direct patient care ceilings used in the calculation shall be the
					 case-mix neutralized ceiling described in subsection B of this section,
					 adjusted for inflation to the midpoint of the prospective period. However, the
					 facility-specific direct patient care cost rates used in the calculation shall
					 not be from the base year, but shall be from the provider fiscal year prior to
					 the period for which a prospective rate is being calculated. Therefore, the
					 provider's direct patient care rate from the previous cost reporting period
					 shall be case-mix neutralized using the facility average normalized Medicaid
					 CMI developed for the two semiannual periods of assessment data that most
					 closely match the cost reporting period prior to the prospective period for
					 which a rate is being calculated. Each year when a new prospective rate is
					 developed, the provider specific direct patient care rate shall be case-mix
					 neutralized using CMI data that uses picture dates that correspond to the cost
					 reporting period used to develop the rate. The relationship between provider
					 cost reporting period and picture dates shall be that illustrated in Table IV,
					 except that in the time period when rates will first be set, the data
					 limitation that affected the picture dates shown in Table IV will not apply.
					 Therefore, for all provider cost reporting periods, picture dates that
					 correspond to the cost reporting period shall be used.
D. After the case-mix neutral direct patient
					 care ceiling (adjusted for inflation from the base year to the prospective
					 period) is compared to the case-mix neutralized facility-specific direct
					 patient care rate (adjusted for inflation from the previous cost reporting
					 period to the prospective period), the lower of the two shall be chosen. This
					 lower amount shall be the case-mix neutral prospective rate per diem for the
					 prospective period. It shall then be adjusted for the CMI intended to
					 correspond as closely as possible to the prospective period. Because of the
					 manner in which the necessary data are reported, there shall be a lag between
					 the picture dates used to develop the CMI information and the prospective
					 period to which the CMI shall apply. The relationship between picture dates and
					 prospective rate periods is illustrated in Table V.
Table V Example of Picture Dates Used in
								Case-Mix Adjustment of Prospective Rate
Quarter of Provider Cost Report Year End
Picture Dates Used to Adjust First Prospective
								Semiannual Period
Picture Dates Used to Adjust Second Prospective
								Semiannual Period
First Quarter CY 2002
9/30/01, 12/31/01
3/31/02, 6/30/02
Second Quarter CY 2002
12/31/01, 3/31/02
6/30/02, 9/30/02
Third Quarter CY 2002
3/31/02, 6/30/02
9/30/02, 12/31/02
Fourth Quarter CY 2002
6/30/02, 9/30/02
12/31/02, 3/31/03
E. Any out-of-state nursing facility provider
					 that is enrolled in the Virginia Medical Assistance Program and is required to
					 submit a cost report to the Virginia Medical Assistance Program will be
					 assigned the Virginia statewide normalized CMI of 1.0. This CMI of 1.0 will be
					 used to adjust the direct patient care cost ceilings and rates.
F. Example of case-mix adjustment of direct
					 operating rate.
1. Following is an
					 illustration of how a nursing facility's case-mix index is used to make direct
					 patient care semiannual rate adjustments to the prospective direct patient care
					 operating cost base rate.
2.
					 Assumptions.
a. The nursing facility's fiscal
					 year is January 1, 2002, through December 31, 2002.
b. The average allowable direct patient care
					 operating rate for the year is $50.
c. The allowance for inflation is 4.0% for
					 the fiscal year beginning January 1, 2003.
d. The nursing facility's case-mix neutral
					 direct peer group ceiling for the fiscal year beginning January 1, 2003, is
					 $60.
e. The nursing facility's
					 normalized case-mix scores are as follows:
12/31/2001 picture date CMI
1.0100
3/31/2002 picture date CMI
1.0105
6/30/2002 picture date CMI
1.0098
9/30/2002 picture date CMI
1.0305
12/31/2002 picture date CMI
1.0355
3/31/2003 picture date CMI
1.0400
3. Calculation of nursing facility's Direct
					 Patient Care Operating Cost Rate.
a. Direct
					 Patient Care Operating Cost Rate:
Average Allowable Direct Patient Care Operating Rate
$50
Allowance For Inflation FYE 2003 x 1.0400
$52
b. Calculation of case-mix factor used for
					 case-mix neutralization:
12/31/2001 CMI
1.0100
3/31/2002 CMI
1.0105
6/30/2002 CMI
1.0098
9/30/2002 CMI
1.0305
Average of four CMI =
1.0152
c. Case-mix neutralized average allowable
					 direct patient care operating rate: Average Allowable Direct Patient Care
					 Operating Rate for FY 2003 $52
Case-mix neutralization factor ÷ 1.0152
Case-mix neutralized Direct Patient Care Operating Rate
						for FY 2003 = $51.22
d.
					 Lower of case-mix neutralized cost or ceiling:
The case-mix neutralized Direct Patient Care Operating
						Rate, $51.22, is lower than the case-mix neutral ceiling, $60. $51.22 will be
						used in the rate calculation.
e. Calculation of case-mix rate adjustments:
(1) Case-mix rate adjustment for the period
					 January 1, 2003, through June 30, 2003:
First semiannual rate adjustment %68 Average of
						(6/30/2002 CMI, 9/30/2002 CMI) = Average(1.0098,1.0305) = 1.0202
(2) Case-mix rate adjustment for
					 the period July 1, 2003 through December 31, 2003:
Second semiannual rate adjustment %68 Average of
						(12/31/2002 CMI, 3/31/2003 CMI) = Average(1.0355,1.0400) =1.0378
f. Rates for semiannual
					 periods:
(1) Case-mix adjusted rate for the
					 period January 1, 2003, through June 30, 2003:
First semiannual rate = 1.0202 * $51.22 = $52.25
(2) Case-mix adjusted rate for the
					 period July 1, 2003 through December 31, 2003:
Second semiannual rate = 1.0378 * $51.22 =
						$53.15