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 II - Nursing Home Payment System › Subpart II - Rate Determination Procedures › Article 4 - Operating Cost Component › Section 12VAC30-90-44 - Nursing facility price-based reimbursement methodology

Current through Register Vol. 40, No. 24, July 15, 2024
A. Effective July
						1, 2014, DMAS shall convert nursing facility operating rates in
						12VAC30-90-41
						to a price-based methodology. The department shall calculate prospective
						operating rates for direct and indirect costs in the following manner:
1. The department shall calculate the cost
						per day in the base year for direct and indirect operating costs for each
						nursing facility. The department shall use existing definitions of direct and
						indirect costs.
2. The initial base
						year for calculating the cost per day shall be cost reports ending in calendar
						year 2011. The department shall rebase prices in fiscal year 2018 and every
						three years thereafter using the most recent, reliable calendar year
						cost-settled cost reports for freestanding nursing facilities that have been
						completed as of September 1. No adjustments will be made to the base year data
						for purposes of rate setting after that date.
3. Each nursing facility's direct cost per
						day shall be neutralized by dividing the direct cost per day by the raw
						Medicaid facility case-mix that corresponds to the base year by
						facility.
4. Costs per day shall be
						inflated to the midpoint of the fiscal year rate period using the moving
						average Virginia Nursing Home inflation index for the fourth quarter of each
						year (the midpoint of the fiscal year). Costs in the 2011 base year shall be
						inflated from the midpoint of the cost report year to the midpoint of fiscal
						year 2012 by prorating fiscal year 2012 inflation and annual inflation after
						that. Annual inflation adjustments shall be based on the last available report
						prior to the beginning of the fiscal year and corrected for any revisions to
						prior year inflation. Effective July 1, 2015, through June 30, 2016, the
						inflation adjustment for nursing facility operating rates shall be
						0.0%.
5. Prices will be established
						for the peer groups described in this section using a combination of Medicare
						wage regions and Medicaid rural and bed size modifications based on similar
						costs.
6. The following definitions
						shall apply to direct peer groups. The Northern Virginia peer group shall be
						defined as localities in the Washington DC-MD-VA MSA as published by the
						Centers for Medicare and Medicaid Services (CMS) for skilled nursing facility
						rates. The Other MSAs peer group includes localities in any MSA defined by CMS
						other than the Northern Virginia MSA and non-MSA designations. The Rural peer
						groups are non-MSA areas of the state divided into Northern Rural and Southern
						Rural peer groups based on drawing a line between the following points on the
						Commonwealth of Virginia map with the coordinates: 37.4203914 Latitude,
						82.0201219 Longitude and 37.1223664 Latitude, 76.3457773 Longitude. Direct peer
						groups are:
a. Northern Virginia,
b. Other MSAs,
c. Northern Rural, and
d. Southern Rural.
7. The following definitions shall apply to
						indirect peer groups. The indirect peer group for Northern Virginia is the same
						as the direct peer group for Northern Virginia. Rest of State peer groups shall
						be defined as any localities other than localities in the Northern Virginia
						peer group for nursing facilities with greater than 60 beds or 60 beds or less.
						Rest of State - Greater than 60 Beds shall be further subdivided into Other
						MSAs, Northern Rural and Southern Rural peer groups using the locality
						definitions for direct peer groups. Indirect peer groups are:
a. Northern Virginia MSA,
b. Rest of State - Greater than 60
						Beds,
c. Other MSAs,
d. Northern Rural, and
e. Southern Rural.
Rest of State - 60 Beds or Less.
8. Any changes to peer group
						assignment based on changes in bed size or MSA will be implemented for
						reimbursement purposes the July 1 following the effective date of the change.
						For rebasings effective on or after July 1, 2020, the department shall move
						nursing facilities located in the former Danville Metropolitan Statistical Area
						to the Other MSAs peer group.
9.
						The direct and indirect price for each peer group shall be based on the
						following adjustment factors:
a. Direct
						adjustment factor - 105.000% of the peer group day-weighted median neutralized
						and inflated cost per day for freestanding nursing facilities. Effective July
						1, 2017, the direct adjustment factor shall be 106.8% of the peer group
						day-weighted median neutralized and inflated cost per day for freestanding
						nursing facilities.
b. Indirect
						adjustment factor - 100.735% of the peer group day-weighted median inflated
						cost per day for freestanding nursing facilities. Effective July 1, 2017, the
						indirect adjustment factor shall be 101.3% of the peer group day-weighted
						median inflated cost per day for freestanding nursing facilities.
10. Facilities with costs
						projected to the rate year below 95% of the price shall have an adjusted price
						equal to the price minus the difference between the facility's cost and 95% of
						the unadjusted price. Adjusted prices will be established at each rebasing. New
						facilities after the base year shall not have an adjusted price until the next
						rebasing.
11. Special
						circumstances.
a. Effective July 1, 2017, the
						department shall increase the direct and indirect operating rates under the
						nursing facility price based reimbursement methodology by 15% for nursing
						facilities where at least 80% of the resident population has one or more of the
						following diagnoses: quadriplegia, traumatic brain injury, multiple sclerosis,
						paraplegia, or cerebral palsy. In addition, a qualifying facility must have at
						least 90% Medicaid utilization and a nursing facility case-mix index of 1.15 or
						higher in fiscal year 2014.
b.
						Effective July 1, 2017, through June 30, 2020, nursing facilities located in
						the former Danville Metropolitan Statistical Area shall be paid the operating
						rates calculated for the Other MSAs peer group.
12. Individual claim payment for direct costs
						shall be based on each resident's Resource Utilization Group (RUG) during the
						service period times the facility direct price.
13. Resource Utilization Group (RUG) is a
						resident classification system that groups nursing facility residents according
						to resource utilization and assigns weights related to the resource utilization
						for each classification. The department shall use RUGs to determine facility
						case-mix for cost neutralization as defined in
						12VAC30-90-306
						in determining the direct costs used in setting the price and for adjusting the
						claim payments for residents.
a. The
						department shall neutralize direct costs per day in the base year using the
						most current RUG grouper applicable to the base year.
b. The department shall utilize RUG-III,
						version 34 groups and weights in fiscal years 2015 through 2017 for claim
						payments.
c. Beginning in fiscal
						year 2018, the department shall implement RUG-IV, version 48 Medicaid groups
						and weights for claim payments.
d.
						RUG-IV, version 48 weights used for claim payments will be normalized to
						RUG-III, version 34 weights as long as base year costs are neutralized by the
						RUG-III 34 group. In that the weights are not the same under RUG-IV as under
						RUG-III, normalization will ensure that total direct operating payments using
						the RUG-IV 48 weights will be the same as total direct operating payments using
						the RUG-III 34 grouper.