VOLUME A-2 (Title 10)

Part 86 - Reporting And Rate Certifications For Facilities

Effective Date: 
Wednesday, June 13, 2018
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Sec. 2803, 2805-e, 2807, 2807-c, 2807-c(35), 2807(2-a)(e), 2808, 3612, 3614, 4010; L. 1995, ch 81, SSL Sec 363-a, 367-p, Sections 26 and 111(a) of Part H of Chapter 59 of the Laws of 2011

SubPart 86-1 - Medical Facilities

Effective Date: 
Wednesday, October 11, 2017
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Secs. 2803, 2807, 2807-a, 2807-c, 2807-c(35), 2807-m, 2808-c, 3612; 3614; L. 1983, ch. 758, Sec. 7; L. 1993, ch. 731; L. 1996, ch. 639

Section 86-1.1 - Definition

Section 86-1.1 Definition.

As used in this Subpart, the term medical facility or facility shall mean all facilities covered by the terms general hospital or certified home health agency as defined in articles 28 and 36 of the Public Health Law, provided that such facility possesses a valid operating certificate or certificate of approval issued by the State Commissioner of Health and has been established, licensed or certified as required by law.
 

Doc Status: 
Complete

Section 86-1.2 - Financial and statistical data required

86-1.2 Financial and statistical data required.

(a) Each medical facility shall complete and file with the department and/or its agent annual financial and statistical report forms supplied by the department and/or its agent. Medical facilities certified for title XVIII (Medicare) shall use the same fiscal year for title XIX (Medicaid) and title B (children's bureau programs) as is used for title XVIII. All other medical facilities must report their operations on a calendar-year basis.

(b) Financial and statistical reports required by this Subpart shall be submitted to the department and/or its agent no later than 5 months following the close of the fiscal period. Extensions of time for filing reports may be granted by the commissioner upon application received prior to the due date of the report only in those circumstances where the medical facility establishes, by documentary evidence, that the reports cannot be filed by the due date for reasons beyond the control of the facility.

(c) In the event a medical facility fails to file the required financial and statistical reports on or before the due dates, or as the same may be extended pursuant to subdivisions (b) or (e) of this section, or fails to comply with the provisions of subdivision (k) of this section, the commissioner shall reduce the current rate paid by state governmental agencies by two percent for a period beginning on the first day of the calendar month following the original due date of the required reports and continuing until the last day of the calendar month in which the required reports are filed.

(d) In the event that any information or data which a facility has submitted to the department on required reports, budgets or appeals for rate revisions intended for use in establishing rates is inaccurate or incorrect, whether by reason of subsequent events or otherwise, such facility shall forthwith submit to the department a correction of such information or data which meets the same certification requirements as the document being corrected.

(e) If the financial and statistical reports required by this Subpart are determined by the department or its agent to be incomplete, inaccurate or incorrect, the facility will have 30 days from date of receipt of notification to provide the corrected or additional data. Failure to file the corrected or additional data within 30 days, or within such period as extended by the commissioner, will result in application of subdivision (c) of this section.

(f) Specific additional data related to the rate setting process may be requested by the commissioner. These data, which may include but are not limited to, those for use in a wage geographic differential survey, a peer grouping data survey, a medical supplies survey, a malpractice insurance survey, a graduate medical education survey and a quarterly utilization survey must be provided by the medical facility within 30 days from the date of receipt of notification to supply such information. The commissioner must supply to each facility, prior to the start of each rate period, a preliminary listing of the data that will be required. Failure to submit the additional data shall result in application of the provisions of subdivision (c) of this section, unless the medical facility can prove by documentary evidence that the data being requested is not available.

(g) General hospitals shall submit to the commissioner at least 120 days prior to the commencement of each revenue cap year, a schedule of anticipated capital-related inpatient expenses for the forthcoming year pursuant to the provisions of section 86-1.25 of this Subpart.

(h) General hospitals with exempt psychiatric units shall submit hospital data regarding patients in such units as required by the Office of Mental Health (see 14 NYCRR Part 580).

(i) Each medical facility shall file with the department a complete copy of the Department of the Treasury, Internal Revenue Service Form 990, for that facility. The Form 990 shall be submitted to the department no later than 30 days following the annual filing with the Internal Revenue Service. Failure to submit the Form 990 shall result in application of the provisions of subdivision (c) of this section.

(j) Generally accepted accounting principles. The completion of the financial and statistical report forms shall be in accordance with generally accepted accounting principles as applied to the medical facility, unless the reporting instructions authorize specific variation in such principles. (k) Accountant's certification. With regard to institutional cost reports filed for report years prior to 2010, the institutional cost report shall be certified by an independent licensed public accountant or an independent certified public accountant. The minimum standard for the term independent shall be the standard used by the State Board of Public Accountancy. (1) Certification by operator, officer or official. (1) The institutional cost report shall be certified by the operator of a proprietary medical facility, an officer of a voluntary medical facility, or the public official responsible for the operation of a public medical facility. (2) The form of the certification required in paragraph (1) of this subdivision shall be as prescribed in the annual fiscal and statistical report forms provided by the commissioner.

Effective Date: 
Wednesday, February 13, 2013
Doc Status: 
Complete

Section 86-1.3 - Uniform system of accounting and reporting

86-1.3 Uniform system of accounting and reporting. (a) Medical facilities shall maintain their records in accordance with:

(1) Accounting and reporting. Hospitals shall maintain their accounts and records in accordance with the Healthcare Financial Management Association's (HFMA)
Introduction to Hospital Accounting, 5th edition, written by Michael Nowicki and published by the Health Administration Press. Such accounts and records are to be maintained on an accrual basis except where an alternate system is mandated by law. Hospitals shall also submit to the department or its authorized agent a certified Institutional Cost Report within 5 months after the close of each hospital's fiscal year. The data shall be reported as follows:

(i) In accordance with the policies and instructions in the following:

(a)
The Financial Management of Hospitals and Healthcare Organizations,4th edition, written by Michael Nowicki and published by the Health Administration Press.

(b) HFMA, Glossary of Terms.

(c)
Health Care Entities – American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guidepublished by the AICPA; and

(d) Medicare Provider Reimbursement Manual, Part 1.

(ii) All government subsidies shall be reported on the income statement of the Institutional Cost Report on the line provided and such amounts shall be itemized on the notes to financial statements by payor and purpose. Such grants shall not be used to reduce allowances as indicated in the American Institute of Certified Public Accountants manual,
Audit and Accounting Guide.

(iii) Investments, other than donations, shall be reported on the balance sheet of the Institutional Cost Report at cost. The notes to the financial statements shall describe the assets and indicate the quoted market value and cost for each category of investment.

(iv) Fixed assets, other than donations, shall be reported on the balance sheet of the Institutional Cost Report at cost.

(v) Discounts, allowances and bad debts shall be reported and broken out on the Institutional Cost Report by hospital service.

(vi) Copies of HFMA's
Introduction to Hospital Accountingand
The Financial Management of Hospitals and Healthcare Organizationsare available from the Health Administration Press, American College of Healthcare Executives, One North Franklin, Suite 1700, Chicago, IL 60606-3529 and at

http://www.ache.org/PUBS/redesign/productcatalog.cfm?pc=WWW1-2060
and

http://www.ache.org/PUBS/redesign/productcatalog.cfm?pc=WWW1-2087
, respectively. Copies of HFMA's Glossary of Terms are available from HFMA, 2 Westbrook Corporate Center, Suite 700, Westchester, IL 60154 and at

http://www.hfma.org/site/store/hfmaglossaryorderform.cfm
. Copies of
Health Care Entities – AICPA Audit and Accounting Guideare available from the AICPA, CPA2Biz Corporate Headquarters, 100 Broadway, 6th Floor, New York, NY 10005 and at http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/AuditAttest/Industryspec.... In addition, a copy of each publication is available for inspection at the offices of the Bureau of Primary and Acute Care Reimbursement, New York State Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237; and
(2) Article 8 of Subchapter A of Chapter V of this Title.
(b) Failure of a medical facility to file the reports required pursuant to this section will subject the medical facility to a rate reduction as set forth in section 86-1.2(c) of this Subpart.
(c) For purposes of rate setting, medical facilities shall submit to the department, or its authorized agent, a certified Institutional Cost Report in accordance with the policies and instructions as set forth in subdivision (a) of this section.
(d) The Institutional Cost Report and supplementary schedule form as adopted by the department shall be used to report financial and statistical data in order to establish rates of payment for title 19 providers.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.4 - Audits

86-1.4 Audits.

(a) All fiscal and statistical records and reports shall be subject to audit. All underlying books, records and documentation which formed the basis for the fiscal and statistical reports, filed by the medical facility with the department, shall he kept and maintained by the facility for a period of time not less than six years from the date of filing or the date upon which the fiscal and statistical records were to be filed, whichever is the later date. In this respect, any rate of payment certified or established by the State Commissioner of Health prior to audit shall be construed to represent a provisional rate until such audit is performed and completed, at which time such rate or adjusted rate will be construed to represent the audited rate.

(b) Subsequent to the filing of fiscal and statistical reports, field audits may be conducted of the records of medical facilities in a time, manner and place to be determined by the State Department of Health. Alternatively or in addition the Department may, in its sole discretion, conduct desk audits of such fiscal and statistical reports.

(c) The required fiscal and statistical reports shall be subject to audit for a period of six years from the date of their filing with the department or from the date when due, whichever is later. This limitation shall not apply to situations in which fraud may be involved, or where the provider or an agent thereof prevents or obstructs the commissioner from performing an audit pursuant to this section.

(d) Upon completion of the audit, the medical facility shall be afforded a closing conference. The medical facility may appear in person or by any one authorized in writing to act on behalf of the medical facility. The medical facility shall be afforded an opportunity at such conference to produce additional documentation in support of any modifications requested in the audit.

(e) The medical facility shall be provided with the audit report and the rate computation sheet per audit. The audit report shall be final unless within 30 days of receipt of the audit report, the medical facility initiates a bureau review of such final audit report by notifying the Division of Health Care financing by registered or certified mail, detailing the specific items of the audit report with which the provider disagrees, and such other material as the provider wishes to submit in its behalf, and forwarding all material documentation in support of the medical facility's position.

(f) The medical facility shall be notified in writing of the determination of the controverted items of the final audit report, including a statement of the reasons for such adjustments and the appropriate citation to applicable law, regulation or policy. The audit findings as adjusted in accordance with the determination of the bureau review shall be final, except that the medical facility may, within 30 days of receipt of the determination of the bureau review, initiate a hearing to refute those items of the audit report adverse to the interests of the medical facility presenting a factual issue by serving on the commissioner, by certified or registered mail, a notice containing a statement of the legal authority and jurisdiction under which the hearing should be held, a reference to the particular sections of the statutes and rules involved and a statement of the controverted items of the audit report and bureau determination, together with copies of any documentation relied on by the medical facility in support of its position.

(1) Upon receipt of such notice the commissioner shall:

(i) designate a hearing officer to hear and recommend;

(ii) establish a time and place for such hearing;

(iii) notify the medical facility of the time and place of such hearing at least 15 days prior thereto; and

(iv) include in a notice of hearing those issues of the audit report which are controverted in the notice served on the commissioner by the medical facility.

(2) The issues and documentation presented by the medical facility at such hearing shall be limited to the factual issues and documentation presented at the bureau review.

(3) The audit report shall be presumptive evidence of its content. The burden of proof at any such hearing shall be upon the medical facility to prove by substantial evidence that the items therein contained are incorrect.

(4) The hearing shall be conducted in conformity with section 12-a of the Public Health Law and the State Administrative Procedure Act. (5) At the conclusion of the hearing the medical facility may submit memoranda on any legal issues which it deems relevant to the proceeding. Such memoranda shall become part of the official record of the hearing.

(g) Rate revisions resulting from the procedure set forth in this section shall be made retroactive to the period or periods during which the rates based on the periods audited were established. Any resulting overpayment or underpayment shall be satisfied by either retroactive adjustment of the provisional rate paid, based on the period audited, or prospective adjustment of the current certified rate at the discretion of the State Commissioner of Health.

(h) Notwithstanding the provisions of this section, the commissioner may promulgate rate revisions based on audits completed by another State agency. Unless otherwise indicated, such audits shall not be considered final and shall not preclude conduct of a complete audit by the State Department of Health or its agent. (i) (1) Effective for institutional cost reports filed for report periods ending on and after December 31, 2010, the Department shall establish a fee schedule for the purpose of funding audit activities authorized pursuant to this section. Such fee schedule shall be published on the New York State Department of Health website at: http://www.health.state.ny.us. The amount of such fees shall be proportional to the amount of the total costs reported by each facility, provided, however, that minimum and maximum fee levels may be established. (2) Additional fee obligations shall be established for facilities filing more than two institutional costs reports for a reporting period. The Department may, upon written application submitted prior to the submission of such additional institutional cost reports, waive or reduce such additional fees based on a showing of financial hardship or a showing that the additional submission is necessitated by Department error or other factors beyond the facility’s control. Such a waiver must be in writing. (3) Fees shall be submitted at the time of the submission of the institutional costs reports. A failure to pay such fees may be deemed by the Department as constituting the non-filing of the institutional cost report and subject the facility to the rate reduction authorized pursuant to section 86-1.2(c) of this Subpart. Failure to pay the additional fee associated with the filing of additional institutional cost reports as described in paragraph (2) of this subdivision shall result in the non-utilization of such revised cost reports by the Department. Delinquent fees may be collected by the Department in accordance with the provisions of paragraph (h) of subdivision 18 of section 2807-c of the Public Health law.

Effective Date: 
Wednesday, February 13, 2013
Doc Status: 
Complete

Section 86-1.5 - Effective period of reimbursement rates

86-1.5 Effective period of reimbursement rates.

Certification of reimbursement rates of payment shall be for a 12-month calendar year period or for such other period as may be prescribed by the Commissioner of Health.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.6 - Allowable costs

86-1.6 Allowable costs.

(a) To be considered as allowable in determining reimbursement rates, costs must be properly chargeable to necessary patient care. Except as otherwise provided in this Part, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under the title XVIII (Medicare) program.

(b) Allowable costs may not include costs for services that have not been approved by the commissioner.

(c) Allowable cost shall include a monetary value assigned to services provided by religious orders and for services rendered by an owner and operator of a facility.

(d) Allowable costs may not include amounts in excess of reasonable or maximum title XVIII (Medicare) costs or in excess of customary charges to the general public. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee.

(e) Allowable costs shall not include expenses or portions of expenses reported by individual facilities which are determined by the commissioner not to be reasonably related to the efficient production of service because of either the nature or amount of the particular item.

(f) Any general ceilings applied by the commissioner, as to allowable costs in the computation of reimbursement rates, shall be published in a hospital memorandum or other appropriate manner. (g) Reserved

(h) Allowable costs shall not include costs which principally afford diversion, entertainment or amusement to their owners, operators or employees.

(i) Allowable costs shall not include any interest charged or penalty imposed by governmental agencies or courts, and the costs of policies obtained solely to insure against the imposition of such a penalty.

(j) Allowable costs shall not include the direct or indirect costs of advertising, public relations and promotion except in those instances where the advertising is specifically related to the operation of the facility and not for the purpose of attracting patients.

(k) Allowable costs shall not include costs of contributions or other payments to political parties, candidates or organizations.

(l) Allowable costs shall include only that portion of the dues paid to any professional association which has been demonstrated, to the satisfaction of the commissioner, to be allocable to expenditures other than for public relations, advertising and political contributions. Any such costs shall also be subject to any cost ceilings that may be promulgated by the commissioner pursuant to subdivision (f) of this section.

(m) Reserved

(n) Allowable costs shall not include any element of cost, as determined by the commissioner, to have been created by the sale of a medical facility.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.7 - Recoveries of expense

86-1.7 Recoveries of expense.

Operating costs shall be reduced by the cost of services and activities which are not properly chargeable to patient care. In the event that the State Commissioner of Health determines that it is not practical to establish the costs of such services and activities, the income derived therefrom may be substituted for costs of these services and activities. Examples of activities and services covered by this provision include:

(a) drugs and supplies sold for use outside the medical facility;

(b) telephone and telegraph services for which a charge is made;

(c) discount on purchases;

(d) living quarters rented to employees;

(e) employee cafeterias;

(f) meals provided to special nurses or patients' guests;

(g) operation of parking facilities for community convenience;

(h) lease of office and other space of concessionaires providing services not related to medical service;

(i) tuitions and other payments for educational service, room and board and other services not directly related to medical service.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.8 - Research and educational activities

86-1.8 Research and educational activities.

(a) All research costs shall be excluded from allowable costs in computing reimbursement rates. Research includes those studies and projects which have as their purpose the enlargement of general knowledge and understandings, are experimental in nature and hold no prospect of immediate benefit to the hospital or its patients.

(b) The costs of educational activities less tuition and supporting grants shall be included in the calculation of the basic rate, provided such activities are directly related to patient care services.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.9 - Compensation of operators and relatives of operators

86-1.9 Compensation of operators and relatives of operators.

(a) Reasonable compensation for operators or relatives of operators for services actually performed and required to be performed shall be considered as an allowable cost. The amount to be allowed shall be equal to the amount normally required to be paid for the same service provided by a nonrelated employee, as determined by the State Commissioner of Health. Compensation shall not be included in the rate computation for any services which the operator or relative of the operator is not authorized to perform under New York State law and regulation.

(b) Any amount reported as compensation for services rendered by an operator or relative of an operator shall not be allowed in excess of the maximum allowance for full time services in carrying out his primary function.

(c) For purposes of subdivision (a) of this section, in determining a reasonable level of compensation for operators or relatives of operators, the commissioner may consider the quality of care provided to patients by the facility during the year in question.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.10 - Related organizations

86-1.10 Related organizations.

(a) A related organization shall be defined as any entity which the medical facility is in control of or is controlled by, either directly or indirectly, or an organization or institution whose actions or policies the facility has the power, directly or indirectly, to significantly influence or direct, or a special purpose organization, or where an association of material interest exists in an entity which supplies goods and/or services to the medical facility, or any entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption. A special purpose organization shall be defined as an organization which is established to conduct certain of the facility's patient-care-related or non-patient-care-related activities. The special purpose organization shall be considered to be related if:

(1) the facility controls the special purpose organization through contracts or other legal documents that allow direct authority over the organization's activities, management and policies; or

(2) the facility is, for all practical purposes, the sole beneficiary of the special organization's activities. The facility shall be considered the special purpose organization's sole beneficiary if one or more of the three following circumstances exist:

(i) a special purpose organization has solicited funds in the name of and with the expressed or implied approval of the facility, and substantially all the funds solicited by the organization were intended by the contributor or were otherwise required to be transferred to the facility or used at its discretion or direction;

(ii) the facility has transferred some of its resources to a special purpose organization, substantially all of whose resources are held for the benefit of the facility; or

(iii) the facility has assigned certain of its functions (such as the operation of a dormitory) to a special purpose organization that is operating primarily for the benefit of the facility.

(b) The costs of goods and/or services furnished to a medical facility by a related organization are includable in the computation of the basic rate at the lower of the cost to the related organization or the market price of comparable goods and/or services available in the medical facility's region within the course of normal business operations.

(c) If the medical facility has incurred any costs in connection with a related organization, the final payment rate shall include the costs of such goods and/or services.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.11 - Termination of service

86-1.11 Termination of service. The Division of Health Care Financing in the department shall be notified immediately of the deletion of any previously offered service or of the withholding of services from patients paid for by government agencies. Such notification shall include a statement indicating the date of the deletion or the withholding of such service and the cost impact on the medical facility of such action. Any overpayments by reason of such deletion of previously offered service shall bear interest and be subject to penalties both in the manner provided in section 86-1.4(f) of this Subpart.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.12 - Federal financial participation

86-1.12 Federal financial participation. The rates of payment made for inpatient hospital services rendered to title XIX recipients established in accordance with the methodology contained in this Subpart shall be contingent upon Federal financial participation (FFP) and approval.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.13 - Certified home health agency rates

86-1.13 Certified home health agency rates

(a) Effective January 1, 1988 reported costs and statistics for a facility's annual fiscal period ending two years prior to the rate period, trended pursuant to section 86-1.58 of this Subpart, shall be used in computing Medicaid rates for care provided by community-based home health agencies. No amount may be included in a rate that is in excess of the agency charges or in excess of 110 percent of the weighted average cost of all community-based agencies in their group. For hospital-based home health agencies, no amount may be included in a rate that is in excess of 110 percent of the weighted average cost of community-based agencies in their area.

(b) The Commissioner shall establish separate payment rates for home care nursing services provided by Certified Home Health Agencies (CHHAs) and Long Term Home Health Care Programs (LTHHCPs) to patients diagnosed with Acquired Immune Deficiency Syndrome (AIDS) as defined by ICD-9 codes 042, 043 and 044. Such rates shall be regional service prices increased by a case mix adjustment factor to reflect the additional resource utilization needed in home care treatment of AIDS patients in excess of resource utilization needed for an average mix of home care patients.

(1) Regional nursing service prices shall be computed based upon average nursing costs per visit calculated by aggregating the base year allowable costs and statistics reported by community based certified home health agencies located within each of four regions, provided however, that effective with rate periods commencing January 1, 1990, the calculation of regional nursing service prices pursuant to this paragraph shall also incorporate base year allowable costs and statistics for LTHHCPs. The regions shall be New York City Region which is comprised of New York, Kings, Queens, Richmond, Bronx, Westchester, Rockland and Putnam Counties; Nassau-Suffolk Region which is comprised of Nassau and Suffolk Counties; Rural Region which is comprised of all Non-Standard Metropolitan Statistical Area counties; All other Metropolitan Region which is comprised of all counties not included in the other regions.

(2) For agencies in the All Other Metropolitan Region group only, the base price will be adjusted by Wage Index Factors. Wage Index Factors shall be calculated for and applied to each of the Standard Metropolitan Statistical Areas (SMSA) within the All Other Metropolitan Region. The SMSA's are:

(i) Albany-Schenectady-Troy;

(ii) Syracuse;

(iii) Binghamton;

(iv) Buffalo;

(v) Elmira;

(vi) Glens Falls;

(vii) Niagara Falls;

(viii) Orange County

(ix) Poughkeepsie;

(x) Rochester;

(xi) Utica-Rome;

The Wage Index Factor shall be determined by weighting the Registered Nurse, Licensed Practical Nurse and Nurse's Aide salary categories based upon the proportion of skilled and Aide visits. The labor portion of the base price shall be multiplied by the respective wage index factor for each of the eleven SMSA's in the All Other Metropolitan Region group.

(3) The base regional service prices computed in accordance with this subdivision shall be increased by a trend factor developed in accordance with section 86-1.58 of this Subpart.

(4) The trended regional nursing service prices shall be increased by an AIDS case mix adjustment factor of 1.2988 to arrive at regional nursing service rates for home care services provided by CHHAs and LTHHCPs to patient diagnosed with AIDS.

(5) Adjustments to regional nursing service prices established by this subdivision shall be limited to annual adjustments made pursuant to paragraphs (1) and (3) of subdivision (b) of this section.

(c) The department shall establish a cap on reimbursable base year administrative and general costs equal to 30% of total reimbursable base year operational costs of a provider of services, excluding a provider of services reimbursed on an initial budget basis, and a new provider, excluding changes in ownership or changes in name, who begins operations in the year prior to the year which is used as a base year in determining rates of payment. The cap on administrative and general costs shall be applied after the application of the weighted average cost of all community-based agencies in their group or area, described in this section.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.14 - Allowance for certified home health agencies providing a disproportionate share of bad debt and charity care

86-1.14 Allowance for certified home health agencies providing a disproportionate share of bad debt and charity care.

(a) Basic rates of payment by governmental agencies for voluntary non-profit, private proprietary and publicly sponsored non-hospital based certified home health agencies which can demonstrate losses as a result of providing a disproportionate share of bad debt and charity care, shall include a bad debt and charity care allowance.

(b) The provisions of this section shall apply to rates of payment during the period July 1, 1990 through December 31, 1990, and for each calendar year period commencing on January first thereafter. The provisions of this section shall be effective if, and as long as, federal financial participation is available for expenditures made for the allowance for beneficiaries eligible for medical assistance under Title XIX of the Federal Social Security Act.

(c) Eligibility shall be limited to voluntary non-profit, private propriety and publicly sponsored non-hospital based certified home health agencies which meet the following criteria:

(1) the facility must ensure the availability of patient service 24 hours a day, 7 days a week as specified in section 763.3(d) of this Title;

(2) the facility must demonstrate compliance with minimum charity care service requirements specified in section 763.11(a)(11) of this Title;

(3) the facility must receive a cost-based Medicaid reimbursement rate pursuant to section 86-1.46 of this Title;

(4) the facility must be able to demonstrate upon request, that it has made reasonable efforts to maintain financial support from community and public funding sources;

(5) the facility must be able to demonstrate upon request, that it has made reasonable efforts to collect payments for services from third- party insurance payors, governmental payors and self-paying patients; and

(6) the facility must have no petition for bankruptcy filed under either Chapter 7 or Chapter 11 of Title 11 of the U.S. Code. The commissioner may waive this criteria if the facility demonstrates that it is financially viable or a potentially financially viable organization with a comprehensive plan to maintain fiscal integrity.

(d) An annual aggregate amount set forth in statute (see Public Health Law section 3614(5)) shall be allocated and distributed between public and non-public facilities. Publicly sponsored facilities shall receive an annual allocation of no more than thirty-five percent of total available funds. The commissioner may adjust the apportionment of funds to be distributed between public and non-public facilities. The commissioner shall consider, but not be limited to, the following factors in establishing the annual apportionment of funds to publicly sponsored facilities:

(1) the ratio of public to non-public base year period bad debt and charity care provided by eligible facilities as defined in subdivision (e)(2) of this section; and

(2) the differences between public and non-public facilities in the total allowable costs for delivering services.

(e) Allowances shall be established on a prospective basis and shall be computed on the basis of allowable fiscal and statistical data submitted by each facility for the base reporting period for the rate year for which allowances are being set. The bad debt and charity care allowance shall be paid as an addition to eligible nursing rates of payment. The amount to be paid will be calculated by dividing each eligible facility's bad debt and charity care loss by base year Medicaid nursing visits.

(1) Eligible losses will be calculated by applying a facility's Medicaid rate of payment for the rate period for which the allowance is being determined, to identified base year eligible visits or units of service.

(2) An eligible visit shall be defined as the unit of service upon which Title XIX payment is based provided, however, to an individual who after a reasonable period of time appears to be unable to pay all or a portion of the payment due for the service, except for those portions of the payment due which are covered by a government agency, insurer or third- party payor, including a payment made directly to the certified home health agency and indemnity or similar payment.

(3) All payments received in the base year directly for eligible visits and government and entitlement revenues obtained for the purpose of subsidizing the certified home health agency's general operating expenses shall be offset against eligible costs to arrive at an eligible loss under this section. For publicly sponsored facilities, the department shall offset all base year Article 6 Local Assistance revenues associated with home health care operations.

(4) An annual amount of loss coverage will be calculated by applying eligible losses against the following nominal loss coverage formula:
The nominal loss coverage percentages may be increased to not more than one hundred percent for non-public or publicly sponsored non-hospital based certified home health agencies, if the sum of the nominal payments for all eligible non-public or publicly sponsored facilities is less than the amounts allocated for either group.

(5) Separate coverage ratios shall be established for non-public and publicly sponsored non-hospital based certified home health agencies in order to make the allocation described in subdivision (d) of this section. These coverage ratios will consist of the aggregate nominal losses for non-public and publicly sponsored non-hospital based certified home health agencies divided into non-public and publicly sponsored disproportionate share allocations, as appropriate. These coverage ratios shall be applied to each non-public or publicly sponsored non-hospital based certified home health agency's annual amount of bad debt and charity care loss coverage to determine the level of bad debt and charity care losses to be incorporated into each facility's Medicaid rate of payment.

(6) The department may make periodic prospective adjustments to an eligible facility's Medicaid payment to ensure that each facility receives the full amount of the allowance for which it is eligible. In no instance shall a facility receive an allowance which exceeds the maximum amount for which it is eligible under this section. In no event shall a facility receive an allowance in an amount exceeding the facility's need for financing losses associated with the delivery of bad debt and charity care.

(f)(1) Eligible facilities shall submit to the department a supplement to the cost report used for Title XIX (Medicaid) reimbursement. This supplement shall be provided by the department and must be returned to the department within 45 days from the date it is received by facilities for the 1990 and 1991 rate years. Thereafter it shall be submitted to the department with the cost report used for purposes of Title XIX reimbursement. The supplement shall include but not be limited to data related to the number of eligible visits or units of service, the costs of eligible services, patient and third-party revenues associated with the eligible services, government and entitlement revenues and Article 6 Local Assistance funding associated with charity care.

(2) Eligible facilities shall maintain statistical and financial reporting systems which permit the collection and reporting of actual visits and revenues associated with the provision of bad debt and charity care services to their patient population. All reported data will be subject to audit. The allowance may be revised based upon audit findings.

(3) Facilities shall provide assurances that they will make and shall document upon request, the reasonable efforts made to maintain financial support from community and public funding sources and to collect payments from third-party payors, governmental payors and self-pay patients.

(4) The commissioner may reduce a current allowance if it is determined that actions or decisions by a facility's management have caused a significant reduction for the rate period in the delivery of home care services to bad debt and charity care patients.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.15 - Definitions

86-1.15 Definitions. As used in this Subpart, the following definitions shall apply:

(a)
Diagnosis related groups (DRGs)shall mean the All-Patient-Refined (APR) classification system which utilizes diagnostic related groups with assigned weights that incorporate differing levels of severity of a patient's condition and the associated risk of mortality, and reflects such factors as the patient's medical diagnosis, severity level, sex, age, and procedures performed.

(b)
DRG case-based payment per dischargeshall mean the payment to be received by a hospital for all inpatient services, except for physician services, rendered to each patient based on the DRG to which that patient has been assigned, as determined by multiplying the statewide base price by the applicable service intensity weight (SIW) and facility-specific wage equalization factor (WEF) and as further adjusted for teaching hospitals by the inclusion of reimbursement for direct and indirect graduate medical education (GME) costs and for all hospitals, the inclusion of non-comparable costs.

(c)
Service intensity weights (SlWs)are the cost weights established such that the SIW for any given DRG indicates the relative cost of the average cost of the patient in the DRG as compared to the average cost of all patients in all DRGs. Weights are developed using cost data from Medicaid fee-for-service, Medicaid managed care and commercial payors as reported to the Statewide Planning and Research Cooperative System (SPARCS).

(d)
Case mix index (CMI)shall mean the relative costliness of a hospital's case mix relative to the case mix of all other hospitals as reflected in the weighted aggregate SIW for the hospital.

(e)
Reimbursable operating costsshall mean reported operating costs which relate to the cost of providing inpatient hospital services to Medicaid patients, adjusted for inflation between the base period used to determine the statewide base price and the rate period in accordance with trend factors determined pursuant to the applicable provisions of section 2807-c(10) of the Public Health Law, but excluding the following costs:

(1) ALC costs;

(2) Exempt unit costs;

(3) Transfer costs; and

(4) High-cost outlier costs.

(f)
Graduate medical education (GME).(1)
Direct GME costsshall mean the reimbursable salaries, fringe benefits, non-salary costs and allocated overhead for residents, fellows, and supervising physicians trended to the rate year by the applicable provisions of section 2807-c(10) of the Public Health Law.

(2)
Indirect GME costsshall mean an estimate of the costs associated with additional ancillary intensiveness of medical care, more aggressive treatment regimens, and increased availability of state-of-the-art testing technologies resulting from the training of residents and fellows.

(g)
High-cost outlier costsfor payment purposes shall mean 100 percent of the hospital's charges converted to cost, using the hospital's most recent ratio of cost-to-charges that exceed the DRG specific high-cost thresholds calculated pursuant to section 86-1.21 of this Subpart.

(h)
Alternate level of care (ALC) servicesshall mean those services provided by a hospital to a patient for whom it has been determined that inpatient hospital services are not medically necessary, but that post-hospital extended care services are medically necessary, consistent with utilization review standards, and are being provided by the hospital and are not otherwise available.

(i)
Exempt hospitals and unitsshall mean those hospitals and units that are paid per diem rates of payment pursuant to the provisions of section 86-1.23 of this Subpart, rather than receiving per discharge case-based rates of payment.

(j)
The wage equalization factor (WEF)shall mean the mechanism to equalize hospital salary and fringe benefit costs to account for the differences in the price of labor among hospitals and groups of hospitals.

(k)
Statewide Base Priceshall mean the numeric value calculated pursuant to section 86-1.16 of this Subpart which shall be used to calculate DRG case-based payments per discharge as defined in subdivision (b) of this section.

(l)
Non-comparable adjustmentsshall mean those base year costs that are passed through the statewide base price calculation and applied to the case-based rate of payment as an add-on payment. The following shall be considered non-comparable adjustments:

(1) Medicaid costs associated with ambulance services operated by a facility and reported as inpatient costs in the institutional cost report; and

(2) Medicaid costs associated with hospital-based physicians at hospitals designated under the Medicare program as meeting the criteria set forth in section 1861(b)(7) of the federal Social Security Act; and

(3) Medicaid costs associated with schools of nursing operated by the facility and reported as inpatient costs in the Institutional Cost Report.

(m)
Transfers.For purposes of transfer per diem payments, a transfer patient shall mean a patient who is not discharged as defined in this section, is not transferred among two or more divisions of merged or consolidated facilities, is not assigned to a DRG specifically identified as a DRG for transferred patients only, and meets one of the following conditions:

(1) is transferred from an acute care facility reimbursed under the DRG case-based payment system to another acute care facility reimbursed under this system; or

(2) is transferred to an out-of-state acute care facility; or

(3) is a neonate who is being transferred to an exempt hospital for neonatal services.

(n)
Discharges,

as used in this Subpart, shall mean those inpatients whose admission to the facility occurred on or after December 1, 2009, and:

(1) the patient is released from the facility to a nonacute care setting;

(2) the patient dies in the facility; or

(3) the patient is transferred to a facility or unit that is exempt from the case-based payment system, except when the patient is a newborn transferred to an exempt hospital for neonatal services and thus classified as a transfer patient pursuant to this section; or

(4) the patient is a neonate being released from a hospital providing neonatal specialty services back to the community hospital of birth for weight gain.

(o)
Arithmetic Inlier Length of Stay (ALOS)shall mean the arithmetic average of the number of days a patient is in the hospital per admission as calculated by counting the number of days from and including the day of admission up to, but not including the day of discharge. The ALOS shall be calculated for each DRG on a statewide basis.

(p)
Hospital, as used in this Subpart, shall mean "general hospital" as defined in section 2801(10) of the Public Health Law.

(q)
Charge convertershall mean the ratio of cost to charges using total inpatient costs and total inpatient charges as reported by the hospital in its annual institutional cost reports submitted to the department.

(r)
IPROshall mean the Island Peer Review Organization, Inc., a New York not-for-profit corporation providing health related services.

(s)
Medicaid, for the purposes of this subpart, shall mean Medicaid Fee-for-Service and Medicaid Managed Care for the period beginning October 1, 2010.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.16 - Statewide base price

86-1.16 Statewide base price.

(a) For periods on and after December 1, 2009, a statewide base price per discharge shall be established based on targeted statewide Medicaid inpatient hospital expenditures and case-mix and wage neutral reimbursable Medicaid acute operating costs derived from the base period identified in subdivision (b) of this section, and as adjusted for inflation between the base period and the rate period in accordance with trend factors determined pursuant to applicable provisions of section 2807-c(10) of the Public Health Law, but excluding costs related to graduate medical education, exempt units, patient transfers, high-cost outliers, alternate level of care, and non-comparables. Such trended operating costs shall then be divided by Medicaid inpatient discharges in the base period identified in subdivision (b) of this section to establish the average statewide base price per discharge for the applicable rate period.

(b) For periods on and after December 1, 2009, the "base period" shall be the 2005 calendar year and "operating costs" shall be those reported by each facility to the department prior to July 1, 2009.

(1) For those hospitals operated by the New York City Health and Hospitals Corporation, the base period shall be for the period which ended June 30, 2005, and for those hospitals operated by New York State, excluding the hospitals operated by the State University of New York, the base period shall be the 12-month period which ended March 31, 2006.

(2) Discharges, as defined in section 86-1.15(n) of this Subpart, used for direct graduate medical education adjustments shall be based on reported 2007 data.

(3) Discharges, as defined in subdivision (n) of section 86-1.15, but excluding the factors set forth in paragraph (3) of such subdivision (n), as used for non-comparable adjustments shall be based on reported 2007 data.

(c) (1) For the period effective July 1, 2011 through March 31, 2012, the statewide base price shall be adjusted such that total Medicaid payments are decreased by $24,200,000.

(2) For the period May 1, 2012 through March 31, 2013 and for state fiscal year periods on and after April 1, 2013, the statewide base price shall be adjusted such that total Medicaid payments are decreased for such period and for each such state fiscal year period by $19,200,000.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.17 - Exclusion of outlier and transfer costs

86-1.17 Exclusion of outlier and transfer costs.

(a) In calculating rates pursuant to this Subpart, high-cost outlier costs from hospitals with ancillary and routine charges schedules shall be excluded from the statewide base price and shall equal 100 percent of the excess costs above the high cost outlier threshold which shall be developed using acute Medicaid operating costs derived from the base period used to calculate the statewide base price. The Medicaid discharges to be applied to the high-cost outlier thresholds shall be those that occurred in the base period used to calculate the statewide base price.

(b) In calculating rates pursuant to this Subpart, transfer case costs shall be excluded from the statewide base price by excluding the transfer discharges that occurred in the base period used to calculate the statewide base price, except for those transfer cases that are assigned to a DRG specifically identified as a DRG for transferred patients only.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.18 - Service Intensity Weights (SIW) and average length-of-stay (LOS)

86-1.18 Service Intensity Weights (SIW) and average length-of-stay (LOS).

(a) The table of SIWs and statewide average LOS for each effective period is published on the New York State Department of Health website at:

http://www.health.state.ny.us/
and reflects the cost weights and LOS assigned to each All-Patient Refined (APR) diagnosis related group (DRG) patient classification category. The SIWs assigned to each APR/DRG indicates the relative cost variance of that APR/DRG classification from the average cost of all inpatients in all APR/DRGs. Such SIWs are developed using three years of Medicaid fee-for-service cost data, Medicaid managed care data and commercial third party payor data as reported to the Statewide Planning and Research Cooperative System (SPARCS) for the years set forth in subdivision (b) of this section. Costs associated with hospitals that do not have an ancillary charge structure or associated with hospitals and services exempt from the case payment methodology, and costs associated with statistical outliers are excluded from the SIW calculations.

(b) For periods on and after December 1, 2009, the SIW and statewide average LOS table shall be computed using SPARCS and reported cost data from the 2005, 2006 and 2007 calendar years as submitted to the department by September 30, 2009.

(c) For periods on and after January 1, 2011, the SIW and statewide average LOS table shall be computed using SPARCS and reported cost data from the 2006, 2007 and 2008 calendar years as submitted to the department by June 30, 2010.

(d) For each calendar year thereafter, the SIW and statewide average LOS table shall be updated by dropping the earliest year of SPARCS data and including the next subsequent calendar year data as submitted to the department by September 30 of the year prior to the rate year.

(e) For the period beginning January 1, 2014 and ending, at the discretion of the commissioner, no sooner than April 1, 2014, but no later than July 1, 2014, the SIWs and statewide average LOS utilized for the 2013 calendar year will be utilized by the Department.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.19 - Wage Equalization Factor (WEF)

86-1.19 Wage Equalization Factor (WEF).

(a) The statewide base price per discharge shall be adjusted by a facility-specific wage equalization factor (WEF) to reflect differences in labor costs between hospitals. Such WEF adjustment shall be used to adjust for the level of wage and fringe benefit costs for each hospital in accordance with the following:

(1) The WEF shall be based on each hospital's occupational mix and wages for registered nurses, licensed practical nurses, surgical technologists, nursing aides, orderlies, attendants and medical assistants as reported and approved by the federal Medicare program, and the hospital's proportion of salaries and fringe benefit costs to total operating costs as reported to the Institutional Cost Report. The WEF shall be computed as follows:

(i) For each occupation described in this paragraph, a statewide average salary shall be calculated by dividing the statewide sum of hospitals' total dollars paid by the statewide sum of hospitals' hours paid; and

(ii) For each hospital an actual weighted average salary shall be calculated by dividing the total dollars paid for such occupations by the total hours paid for such occupations; and

(iii) An initial WEF shall be calculated for each hospital by dividing the hospital-specific actual weighted average salary as calculated pursuant to subparagraph (ii) of this paragraph by the statewide average salary calculated pursuant to subparagraph (i) of this paragraph; and

(iv) The final WEF shall be calculated using the following formula:

(1 / ((Labor Share/initial WEF) + Non-Labor Share))

where "Labor Share" is calculated by dividing the hospital's total salary cost plus the hospital's total fringe benefits by the hospital's total operating costs as reported in the institutional cost report for the same calendar year used to calculate the statewide base price for the applicable rate period. The "Non-Labor Share" equals total operating costs less the "Labor Share" of costs.

(2) A hospital may submit updated occupational service data as approved by the federal Department of Health and Human Services prior to January 1 of a rate year for use in calculating the WEF in accordance with this section.

(3) For those hospitals that are in bankruptcy proceedings in the base year and that have subrogated their labor contracts, the commissioner shall use the higher of the hospital-specific or regional average WEF. These regions will be consistent with those used in the development of the exempt unit cost ceilings.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.20 - Add-ons to the case payment rate per discharge

86-1.20 Add-ons to the case payment rate per discharge. Rates of payment computed pursuant to this Subpart shall be further adjusted in accordance with the following:

(a) A direct graduate medical education (GME) payment per discharge shall be added to the case payment rates of teaching general hospitals after the application of SIW and WEF adjustments to the statewide base price and shall be calculated for each hospital by dividing the facility's total reported Medicaid direct GME costs by its total reported Medicaid discharges pursuant to section 86-1.16(b)(2) of this Subpart. Direct GME costs shall be those costs defined in section 86-1.15(f)(1) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from the cost included in the statewide base price.

(b)(1) An indirect GME payment per discharge shall be added to the case payment rates of teaching general hospitals after the application of SIW and WEF adjustments to the statewide base price and shall be calculated by multiplying such rates by the indirect teaching cost percentage determined by the following formula:

(1 – (1 / (1 + 1.03(((1 + r) ^0.0405) – 1))))

where "r" equals the ratio of residents and fellows to beds based on the medical education statistics for the hospital for the period ended June 30, 2005 as contained in the survey document submitted by the hospital to the department as of June 30, 2009 and the staffed beds for the general hospital reported in the 2005 institutional cost report and submitted to the department no later than June 30, 2009, but excluding exempt unit beds and nursery bassinettes.

(2) Indirect GME costs are those costs defined in section 86-1.15(f)(2) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from computation of the statewide base price. The amount of such exclusion shall be determined by multiplying the total reported Medicaid costs less reported direct GME costs by the following formula:

1.03(((1 + r) ^0.0405) – 1)

where "r" equals the ratio of residents and fellows to beds as determined in accordance with paragraph (1) of this subdivision.

(c) A non-comparable payment per discharge shall be added to case payment rates after the application of SIW and WEF adjustments to the statewide base price and shall be calculated for each hospital by dividing the facility's total reported Medicaid costs for qualifying non-comparable cost categories by its total reported Medicaid discharges pursuant to section 86-1.16(b)(2) of this Subpart. Non-comparable hospital costs are those costs defined in section 86-1.15(l) of this Subpart, derived from the same base period used to calculate the statewide base price for the applicable rate period and trended forward to such rate period in accordance with applicable provisions of section 2807-c(10) of the Public Health Law, and shall be excluded from the cost included in the statewide base price.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.21 - Outlier and transfer cases rates of payment

86-1.21 Outlier and transfer cases rates of payment

(a)(1) High cost outlier rates of payment shall be calculated by reducing total billed patient charges, as approved by IPRO, to cost, as determined based on the hospital's ratio of cost to charges. Such calculation shall use the most recent data available as subsequently updated to reflect the data from the year in which the discharge occurred, and shall equal 100 percent of the excess costs above the high cost outlier threshold. High cost outlier thresholds shall be developed for each individual DRG and adjusted by hospital-specific wage equalization factors (WEF) and increased by the Consumer Price Index from the base period used to determine the statewide base price and the rate period.

(2) A non-public, not-for-profit general hospital which has not established an ancillary and routine charges schedule shall be eligible to receive high-cost outlier payments equal to the average of high-cost outlier payments received by comparable hospitals, as determined using the following criteria:

(i) downstate hospitals;

(ii) hospitals with a Medicaid fee for service case mix greater than 1.75;

(iii) hospitals with Medicaid fee for service revenue greater than $30 million of total revenue; and

(iv) hospitals with a proportion of Medicaid fee for service outlier to inlier cases greater than 3.0 percent.

(b) Rates of payment to non-exempt hospitals for inpatients who are transferred to another non-exempt hospital shall be calculated on the basis of a per diem rate for each day of the patient's stay in the transferring hospital, subject to the exceptions set forth in paragraphs (1), (2) and (3) of this subdivision. The total payment to the transferring facility shall not exceed the amount that would have been paid if the patient had been discharged. The per diem rate shall be determined by dividing the DRG case-based payment per discharge as defined in section 86-1.15(b) of this Subpart by the arithmetic inlier length of stay (LOS) for that DRG, as defined in section 86-1.15(o) of this Subpart, and multiplying by the transfer case's actual length of stay and by the transfer adjustment factor of 120 percent. In transfer cases where the arithmetic inlier LOS for the DRG is equal to one, the transfer adjustment factor shall not be applied.

(1) Transfers among more than two hospitals that are not part of a merged facility shall be reimbursed as follows:

(i) the facility which discharges the patient shall receive the full DRG payment; and

(ii) all other facilities in which the patient has received care shall receive a per diem rate unless the patient is in a transfer DRG.

(2) A transferring facility shall be paid the full DRG rate for those patients in DRGs specifically identified as transfer DRGs.

(3) Transfers among non-exempt hospitals or divisions that are part of a merged or consolidated facility shall be reimbursed as if the hospital that first admitted the patient had also discharged the patient.

(4) Services provided to neonates discharged from a hospital providing neonatal specialty services to a hospital reimbursed under the case payment system for purposes of weight gain shall be reimbursed and assigned to the applicable APR-DRG upon admission or readmission.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.22 - Alternate level of care payments

86-1.22 Alternate level of care payments.

(a) Hospitals shall be reimbursed for ALC days at the appropriate 1987 group average operating cost component of rates of payment for hospital-based residential health care facilities established pursuant to Subpart 86-2 of this Part trended to the rate year. The determination of the group average operating rate for hospital-based residential health care facilities shall be based on the combination of residential health care facilities as follows:

(1) The downstate group consisting of residential health care facilities located in the five boroughs of New York City and Nassau, Suffolk, Westchester and Rockland Counties.

(2) The upstate group consisting of all other residential health care facilities in the state.

(b) Hospitals that convert medical/surgical beds to residential health care beds shall be reimbursed for services provided in the converted beds in accordance with Subpart 86-2 of this Part.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.23 - Exempt units and hospitals

86-1.23 Exempt units and hospitals.

(a)
Physical medical rehabilitation inpatient servicesshall qualify for reimbursement pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such services are provided in a hospital specializing in such services or in a distinct unit within a general hospital designated for such services and only if:

(1) Such hospital or such unit qualified for exempt unit status for purposes of reimbursement under the federal Medicare prospective payment system as of December 31, 2001; or

(2) On or before July 1, 2009, the hospital submitted a written request to the department for exempt status providing assurances acceptable to the department that the hospital or unit within the hospital meets the exempt status criteria set forth in section 2807-c(4)(e) of the Public Health Law for 2009 for periods prior to December 1, 2009.

(i) For periods on and after January 1, 2010, a hospital seeking exempt status for a hospital or a distinct unit within the hospital not previously recognized by the department as exempt for reimbursement purposes shall submit a written request to the department for such exempt status and shall provide assurances and supporting documentation acceptable to the department that the hospital or unit meets qualifying exempt status criteria in effect at the time such written request is submitted. Approval by the department of such exempt status shall, for reimbursement purposes, be effective on the January 1 following such approval, provided that the request for such exempt unit status was received at least 120 days prior to such date.

(ii) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, not including reported direct medical education costs and physician costs, and held to a ceiling of 110% of the average of such costs in the region in which the facility is located, as described in subdivision (i) of this section. Such rates shall reflect trend adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(b)
Chemical dependency rehabilitation inpatient servicesshall qualify for reimbursement pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such services are provided in a hospital specializing in such services or in a distinct unit within a general hospital designated for such services and only if:

(1) The services provided in such hospital or unit are limited to chemical dependency rehabilitation care and do not include chemical dependency related inpatient detoxification and/or withdrawal services; or

(2) Such hospital or unit is licensed to provide such services pursuant to both the Public Health Law and the Mental Hygiene Law and meets the applicable alcohol and/or substance abuse rehabilitation standards set forth in regulations.

(i) Any such unit within a hospital must be in a designated area and consist of designated beds providing only chemical dependency rehabilitation inpatient services with adequate adjoining supporting spaces and assigned personnel qualified by training and/or by experience to provide such services and in accordance with any applicable criteria regarding the provision of such services issued by the New York State Office of Alcohol and Substance Abuse Services.

(ii) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services,

for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, not including reported direct medical education costs and physician costs, and held to a ceiling of 110% of the average of such costs in the region in which the facility is located, as described in subdivision (i) of this section. Such rates shall reflect trend adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(c)
Critical access hospitals. (1) Rural hospitals shall qualify for inpatient reimbursement as critical access hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals are designated as critical access hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009, and held to a ceiling of 110% of the average of such costs for all such designated hospitals statewide. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(d)
Cancer hospitals.(1)

Hospitals shall qualify for inpatient reimbursement as cancer hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals were, as of December 31, 2008, designated as comprehensive cancer hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(e)
Specialty long term acute care hospital.(1) Hospitals shall qualify for inpatient reimbursement as specialty long term acute care hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if such hospitals were, as of December 31, 2008, designated as specialty long term acute care hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act.

(2) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2005 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(f)
Acute care children's hospitals. Hospitals shall qualify for inpatient and outpatient reimbursement as acute care children's hospitals pursuant to section 2807-c(4)(e-2) of the Public Health Law for periods on and after December 1, 2009, only if:

(1) Such hospitals were, as of December 31, 2008, designated as acute care children's hospitals in accordance with the provisions of Title XVIII (Medicare) of the federal Social Security Act; and

(2) Such hospitals filed a discrete 2007 institutional cost report reflecting reported Medicaid discharges of greater than 50 percent of total discharges.

(i) For days of service occurring on and after December 1, 2009, the operating component of rates of payment for inpatient services, other than physician services, for facilities subject to this subdivision shall be a per diem amount reflecting the facility's reported 2007 operating costs, excluding physician costs, as submitted to the department prior to July 1, 2009. Such rates shall reflect trend factor adjustments in accordance with the applicable provisions of section 2807-c(10) of the Public Health Law.

(g)
Substance abuse detoxification inpatient services.For patients discharged on and after December 1, 2008, rates of payment for general hospitals which are certified by the Office of Alcoholism and Substance Abuse Services (OASAS) to provide services to patients determined to be in the diagnostic category of substance abuse (MDC 20, DRGs 743 through 751) will be made on a per diem basis. This includes inpatient detoxification, withdrawal, and observation services.

Medically managed detoxification services are for patients who are acutely ill from alcohol and/or substance related addictions or dependence, including the need or risk for the need of medical management of severe withdrawal, and/or are at risk of acute physical or psychiatric co-morbid conditions. Medically supervised withdrawal services are for patients at a mild or moderate level of withdrawal, or are at risk for such, as well as patients with sub-acute physical or psychiatric complications related to alcohol and/or substance related dependence, are intoxicated, or have mild withdrawal with a situational crisis, or are unable to abstain yet have no past withdrawal complications.

The per diem rates for inpatient detoxification, withdrawal, and observation services will be determined as follows:

(1) The operating cost component of the per diem rates will be computed using 2006 costs and statistics, excluding physician costs, as reported to the department by general hospitals prior to 2008, adjusted for inflation. The inflation factor will be calculated in accordance with the trend factor methodology described in this Attachment. The average operating cost per diem for the region in which the hospital is located will be calculated using costs incurred for patients requiring detoxification services. The operating cost component of the per diem rates will be transitioned to 2006 as follows:

(i) For the period December 1, 2008 through March 31, 2009, 75% of the operating cost component will reflect the operating cost component of rates effective for December 31, 2007, adjusted for inflation, and 25% will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(ii) For April 1, 2009 through March 31, 2010, 37.5% of the operating cost component will reflect the December 31, 2007 operating cost component, adjusted for inflation, and 62.5% will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(iii) For periods on and after April 1, 2010, 100% of the operating cost component will reflect 2006 operating costs in accordance with paragraphs (2) through (6).

(2) For purposes of establishing the average operating cost per diem by region for medically managed detoxification and medically supervised withdrawal services, the regions of the state are defined as follows:

(i) New York City - Bronx, New York, Kings, Queens and Richmond Counties;

(ii) Long Island - Nassau and Suffolk Counties;

(iii) Northern Metropolitan - Columbia, Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester Counties;

(iv) Northeast - Albany, Clinton, Essex, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren and Washington Counties;

(v) Utica/Watertown - Franklin, Herkimer, Lewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and Oneida Counties;

(vi) Central - Broome, Cayuga, Chemung, Cortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins Counties;

(vii) Rochester - Monroe, Ontario, Livingston, Wayne and Yates Counties; and

(viii) Western - Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans and Wyoming Counties.

(3) For each of the regions, the 2006 operating costs incurred by general hospitals in such region for providing care to inpatients requiring detoxification services, as defined by OASAS, and reported in the 2006 ICR submitted to the department prior to 2008, are adjusted by a length of stay (LOS) factor. This LOS factor reflects the loss of revenue due to the reduction of payments for services over the 5th day of stay. The total adjusted operating costs for each region, divided by the total regional days, is the average operating cost per diem for the region.

(4) The per diem rates for inpatients requiring medically managed detoxification services will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, for the first 5 days of service. However, such payments will be reduced by 50% for services provided on the 6th through 10th day of service. No payments will be made for any services provided on and after the 11th day.

(5) Per diem rates for inpatients requiring medically supervised withdrawal services, will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, for the period January 1, 2009 through December 31, 2009. For periods on and after January 1, 2010, the per diem rates for withdrawal services will reflect 75% of the average operating cost per diem for the region, adjusted for inflation, and will be reduced by 50% for care provided on the 6th through 10th day of service. No payments will be made for any services provided on and after the 11th day.

(6) Per diem rates for inpatients placed in observation beds, as defined by OASAS, will reflect 100% of the average operating cost per diem for the region in which the hospital is located, adjusted for inflation, and will be paid for no more than 2 days of care. After 2 days of care the payments will reflect the patient's diagnosis as requiring either detoxification or withdrawal services. The days of care in the observation beds will be included in the determination of days of care for either detoxification or withdrawal services. Furthermore, days of care provided in observation beds will, for reimbursement purposes, be fully reflected in the computation of the initial five days of care.

(7) Capital cost reimbursement for the general hospitals which are certified by OASAS to provide substance abuse services will be based on the current reimbursement methodology for determining allowable capital for exempt unit per diem rates. Such capital cost will be added to the applicable operating cost component as a per diem amount to establish the per diem rate for each service.

(h) Hospitals or distinct units of hospitals that fail to maintain qualifying criteria for exempt status for reimbursement purposes, as set forth in this section or in section 2807-c(4)(e-2) of the Public Health Law, shall continue to be reimbursed in accordance with such exempt status until the commencement of the next rate period, as determined by the department.

(i) Rates of payment for inpatient services for exempt distinct units of hospitals described in subdivisions (a), (b), (c), (d) and (e) of this section, for which separately identifiable 2005 reported costs data are not available, shall reflect the average reported 2005 operating cost per day for comparable exempt units, as determined by the department.

(j) Rates of payment for inpatient services described in subdivisions (a) and (b) of this section which utilize regional averages for determining a cost ceiling shall utilize regions of the State set forth in section 2807-c(4)(l)(iii)(E) of the Public Health Law and this subdivision, except that if the otherwise applicable region has less than five exempt hospitals or units in the service, facilities located in the nearest regions will be used to establish a minimum of five hospital or units for the purpose of determining ceilings. Such regions are as follows:

(1) New York City, consisting of the counties of Bronx, New York, Kings, Queens and Richmond;

(2) Long Island, consisting of the counties of Nassau and Suffolk;

(3) Northern Metropolitan, consisting of the counties of Columbia, Delaware, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester;

(4) Northeast, consisting of the counties of Albany, Clinton, Essex, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren and Washington;

(5) Utica / Watertown, consisting of the counties of Franklin, Herkimer, Lewis, Oswego, Otsego, St. Lawrence, Jefferson, Chenango, Madison and Oneida;

(6) Central, consisting of the counties of Broome, Cayuga, Chemung, Cortland, Onondaga, Schuyler, Seneca, Steuben, Tioga and Tompkins;

(7) Rochester, consisting of the counties of Monroe, Ontario, Livingston, Wayne and Yates;

(8) Western, consisting of the counties of Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans and Wyoming.

(k) Capital cost components of per diem rates determined pursuant to this section shall be computed on the basis of budgeted capital costs allocated to the exempt hospital or distinct unit of a hospital pursuant to the provisions of section 86-1.25 of this Subpart divided by exempt hospital or unit patient days reconciled to actual total expense.

(l)
New hospitals and new hospital units. The operating cost component of rates of payment for new hospitals, or hospital units, without adequate cost experience shall be computed based on either budgeted cost projections, subsequently reconciled to actual reported cost data, or the regional ceiling calculated in accordance with subdivision (i) of this section, whichever is lower. The capital cost component of such rates shall be calculated in accordance with section 86-1.25 of this Subpart.

(m)
Inpatient psychiatric services.Per diem rates of payment for a general hospital or a distinct unit of a general hospital for inpatient psychiatric services shall be continue to be determined in accordance with the reimbursement methodology set forth in section 86-1.57 of this Subpart which was in effect for periods prior to December 1, 2009.

Effective Date: 
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Section 86-1.24 - Trend factor

86-1.24 Trend factor. The commissioner shall establish trend factors for hospitals to project the effects of price movements on historical operating costs. Rates of payment excluding capital, as calculated pursuant to the provisions of this Subpart, shall be trended to the applicable rate year by the trend factors developed in accordance with the provisions of subdivision 10 of section 2807-c of the Public Health Law.

Effective Date: 
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Section 86-1.25 - Capital expense reimbursement

86-1.25 Capital expense reimbursement

(a) The allowable costs of fixed capital (including but not limited to depreciation, rentals and interest on capital debt), and major movable equipment shall be reimbursed based on budgeted data and shall be reconciled to total actual expense for the rate year and shall be determined and computed in accordance with the provisions of subdivisions (f), (g), and (h) of this section.

(b) General hospitals shall submit a schedule of anticipated inpatient capital-related expenses for the forthcoming year to the commissioner at least 120 days prior to the beginning of the rate year.

(c) The following principles shall apply to budgets for inpatient capital-related expenses:

(1) The basis for determining capital-related inpatient expenses shall be the lesser of actual cost or the final amount specifically approved for construction of the capital asset.

(2) Any capital-related inpatient expense generated by a capital expenditure which requires or required approval pursuant to article 28 of the Public Health Law, must have received such approval for the capital-related expense to be included in the rate calculation.

(3) The submitted budget may include the capital-related inpatient expense of all existing capital assets, as well as estimates of capital-related inpatient expenses for capital assets to be acquired or placed in use prior to the commencement of the rate year.

(4) Any capital-related expense generated by a capital expenditure acquired or placed in use during a rate year shall be carried forward to the subsequent rate year, provided all required approvals have been obtained. In instances where such approvals have been obtained or where approval is not required and such assets are acquired or placed in use during a rate year, the budget may include estimates for capital-related expenses relating to these assets.

(d) Allocation of budgeted capital costs. In each rate year budgeted capital costs shall be allocated to exempt units and hospitals (including certified substance abuse detoxification services) to DRG case payment rates based on reported capital traceback statistics for the two years prior to the rate year.

(e) Payment for budgeted allocated capital costs.

(1) Capital per diems for exempt units and hospitals shall be calculated by dividing the budgeted capital costs allocated to such rates in paragraph (d) of this section by the exempt unit days, reconciled to rate year days and actual rate year exempt unit or hospital-approved capital expense.

(2) Capital payments for DRG case rates shall be determined by dividing the budgeted capital allocated to such rates in paragraph (d) of this section by the hospital's budgeted non-exempt unit discharges, reconciled to rate year discharges and actual rate year non-exempt unit or hospital-approved capital expense.

(3) Capital payments for transferred patients shall be determined by dividing the budgeted capital allocated to the DRG case payment rates by the budgeted nonexempt hospital's unit days, reconciled to rate year days and actual rate year nonexempt unit or hospital approved capital expense.

(f) Depreciation.

(1) Reported depreciation based on historical cost is recognized as a proper element of cost. Useful lives shall be the higher of the reported useful life or those useful lives from the Estimated Useful Lives of Depreciable Hospital Assets, American Hospital Association, consistent with title XVIII provisions. Copies of this publication are available from the American Hospital Association, One North Franklin, Chicago, IL 60606-3421, and a copy is available for inspection and copying at the offices of the records access officer of the Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237.

(2) In the computation of rates for voluntary facilities, depreciation shall be included on a straight line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight line method or accelerated under a double declining balance or sum-of-the-years' digit method. Depreciation shall be funded unless the commissioner determines, upon application by the facility, and after inviting written comments from interested parties, that the requested waiver of the requirements for funding is a matter of public interest and necessity. In instances where funding is required, such fund may be used only for capital expenditures with approval as required for the amortization of capital indebtedness. Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded. Board-designated funds and the accrual of liabilities to the funded depreciation accounts (due to/from accounts) shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts to be considered as valid funding transactions unless expended for the purpose for which it was funded.

(3) In the computation of rates for public facilities, depreciation is to be included on a straight-line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years' digits method.

(4) Medical facilities financed by mortgage loans pursuant to the Nursing Home Companies Law or the Hospital Mortgage Loan Construction Law shall conform to the requirements of this Subpart. In lieu of depreciation and interest, on the loan-financed portion of the facilities, the commissioner shall allow level debt service on the mortgage loan, for all loans approved for financing prior to January 1, 1990, together with such required fixed charges, sinking funds and reserves as may be determined by the commissioner as necessary to assure repayment of the mortgage indebtedness. For loans approved for financing on or after January 1, 1990, medical facilities shall receive reimbursement in the form of interest and depreciation in accordance with the remainder of this Subpart.

(5) Article IX-C corporations may elect to include in their reimbursement rates depreciation computed by a method other than that used in paragraphs (2) and (3) of this subdivision, subject to approval by the commissioner.

(6) With respect to outpatient facilities, capital cost reimbursement may include an amount for rent, provided the following conditions are met:

(i) the lease is reviewed and approved by the department or any other appropriate State agency;

(ii) the space rented is in a multi-purpose, multi-use building not specifically constructed for the purpose of housing an outpatient facility;

(iii) the rental, if the lease is a sublease, is the same or less than comparable leases in the geographic area;

(iv) the applicant has no interest, direct or indirect, beneficial or of record, in the ownership of the building or any overlease; and

(v) the rental per square foot, in the judgment of the department, is the same as or is comparable to other rentals in the building in which the outpatient service is to be located, and the rental per square foot is comparable to the rental of similar space in other comparable buildings in the area when such comparisons can be made.

(g) Interest.

(1) Necessary interest on both current and capital indebtedness is an allowable cost for all medical facilities.

(2) To be considered as an allowable cost, interest shall be incurred to satisfy a financial need, and at a rate not in excess of what a prudent borrower would have had to pay in the money market at the time the loan was made and exclude costs and fees incurred as a result of an interest rate swap agreement. Also, the interest shall be paid to a lender not related through control, ownership, affiliation or personal relationship to the borrower, except in instances where the prior approval of the commissioner has been obtained. Financial need for capital indebtedness relating to a specific project shall exist when all available restricted funds designated for capital acquisition of that type have been considered for equity purposes.

(3) Interest expense shall be reduced by investment income with the exception of income from funded depreciation, qualified pension funds, trusteed malpractice insurance funds, or in instances where income from gifts or grants is restricted by donors. Interest on funds borrowed from a donor restricted fund or funded depreciation is an allowable expense. Investment income shall be defined as the aggregate net amount realized from dividends, interest, rental income, interest earned on temporary investment of withholding taxes, as well as all gains and losses. If the aggregate net amount realized is a loss, the loss shall not be allowable. Rate year investment income shall reduce rate year interest expense allowed for reimbursement as follows:

(i) for all medical facilities, investment income shall first be used to reduce operating interest expense for that year;

(ii) any remaining amount of investment income, after application of paragraph (i), shall be used to reduce capital interest expense reimbursed that year for medical facilities; and

(iii) any remaining amount of investment income after application of paragraph (ii) shall not be considered in the determination of allowable costs.

(4) Interest on current indebtedness shall be treated and reported as an operating, administrative expense.

(5) Interest on capital indebtedness is an allowable cost if the debt generating the interest is approved by the commissioner, incurred for authorized purposes, and the principal of the debt does not exceed either the approval of the commissioner or the cost of the authorized purposes. Capital indebtedness shall mean all debt obligations of a facility that are:

(i) evidenced by a mortgage note or bond and secured by a mortgage on the land, building or nonmovable equipment; a note payable secured by the nonmovable equipment of a facility; a capital lease;

(ii) incurred for the purpose of financing the acquisition, construction or renovation of land, building or nonmovable equipment;

(iii) found by the commissioner to be reasonable, necessary and in the public interest with respect to the facility. Interest related to refinancing indebtedness shall be considered an allowable cost only to the extent that it is payable with respect to an amount equal to the unpaid principal of the indebtedness then being refinanced. However, interest incurred on refinanced debt in excess of the previously unpaid balance of the refinanced indebtedness will be allowable on acceptable demonstration to the commissioner that such refinancing will result in a debt service savings over the life of the indebtedness; or

(iv) incurred for the purpose of advance refunding of debt. Gains and losses resulting from the advanced refunding of debt shall be treated and reported as a deferred charge or asset. This deferred charge or asset is to be amortized on a straight-line basis over the period to the scheduled maturity date of the refunding debt.

(6) Where a public finance authority has established a mortgage rate of interest such that sufficient cash flows exist to retire the mortgage prior to the stated maturity, the amount of the mortgage to be forgiven, at the time of such forgiveness, shall be capitalized as a deferred asset and amortized over the remaining mortgage life, as a reduction to the facility's capital expense.

(7) Voluntary facilities shall report mortgage obligations financed by public finance authorities for their benefit and which they are responsible to repay, as liabilities in the general fund, when such mortgage obligations are incurred.

(h) Sales, leases and realty transactions.

(1) If a medical facility is sold or leased or is the subject of any other realty transaction before a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall be determined in accordance with the provisions of this section.

(2) If a medical facility is sold or leased or is the subject of any other realty transaction after a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall be considered to be continuing with the same force and effect as though such sale, lease or other realty transaction had not occurred. This subdivision shall not be construed as limiting the powers and rights of the commissioner to change rate computations generally or specifically when based upon previous error, deceit or any other misrepresentation or misstatement that has led the commissioner to determine and certify a rate which he would otherwise not have determined or certified. Further, this subdivision shall not be construed as limiting the powers and rights of the commissioner to reduce rates when one or more of the original property right aspects related to such a facility is terminated.

(3) An arms length lease purchase agreement with a nonrelated lessor involving plant facilities or equipment which meets any one of the four following conditions, establishes the lease as a virtual purchase.

(i) The lease transfers title of the facilities or equipment to the lessee during the lease term.

(ii) The lease contains a bargain purchase option.

(iii) The lease term is at least 75 percent of the useful life of the facilities or equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment.

(iv) The present value of the minimum lease payments (payments to be made during the lease term including bargain purchase option, guaranteed residual value and penalties for failure to renew) equals at least 90 percent of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment. Present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case the interest rate implicit in the lease is used.

(4) If a lease is established as a virtual purchase under subdivision (d) of this section, the rental charge may be included in capital-related costs to the extent that it does not exceed the amount that the provider would have included in capital-related costs if it had legal title to the asset (the cost of ownership). The cost of ownership shall be limited to depreciation and interest. Further, the amounts to be included in capital-related costs are determined as follows:

(i) The difference between the amount of rent paid and the amount of rent allowed as capital-related costs is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.

(ii) If an asset is returned to the owner instead of being purchased, the deferred charge may be included in capital-related costs in the year the asset is returned.

(iii) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership.

(iv) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to a fair rental value.

(v) If the lessee becomes the owner of the leased asset (either by operation of the lease or by other means), the amount considered as depreciation for the purpose of having computed the limitation on rental charges under subdivision (e) of this section, must be used in calculating the limitation on adjustments for the purpose of determining any gain or loss upon disposal of an asset.

(vi) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs had the provider legal title to the asset.

(5) If a facility enters into a sale and leaseback agreement involving plant facilities or equipment, the amounts to be included in capital-related costs both on an annual basis and over the useful life of the asset shall not exceed the costs of ownership which shall be limited to depreciation and interest, and shall be determined as follows:

(i) If the annual rental or lease costs in the early years of the lease are less than the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are more than the annual costs of ownership, in the years that the annual rental or lease costs are more than the annual costs of ownership, the facility may include in capital-related costs annually the actual amount of rental or lease costs, except that in any given year, the amount included in capital related costs is limited to an amount which would not cause the aggregate rental or lease costs included up to that year in capital-related costs to exceed the costs of ownership that would have been included in capital-related costs up to that year if the provider had retained legal title to the asset.

(ii) If the annual rental or lease costs in the early years of the lease exceed the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are less than the annual costs of ownership, the facility may carry forward amounts of rental or lease costs that were not included in capital-related costs in the early years of the lease due to the costs of ownership limitation, and include these amounts in capital-related costs in the years of the lease when the annual rental or lease costs are less than the annual costs of ownership, provided, however, in any given year the amount of actual annual rental or lease costs plus the amount carried forward to that year may not exceed the amount of the costs of ownership for that year.

(iii) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs if the provider had retained legal title to the asset.

(iv) If a facility enters into a sale and leaseback agreement involving land, the incurred rental for the cost of land may not be included in allowable costs.

Effective Date: 
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Section 86-1.26 - Statewide Planning and Research Cooperative System (SPARCS)

86-1.26 Statewide Planning and Research Cooperative System (SPARCS).

Each general hospital shall be assessed an annual fee calculated on the basis of the hospital's proportionate share of the sum of total costs reported by all general hospitals in the most recent calendar year for which certified data are available. Such amount shall not exceed one tenth of one percent of the total certified cost of the hospital. The commissioner shall inform each such hospital of its actual fee to support the statewide planning and research cooperative system and each hospital shall submit such fee on a quarterly basis to be received by the commissioner not later than the 15th of February, May, August and November of each year. Failure to submit such fees in accordance with this schedule may result in a two-percent reduction in the affected hospital's rate beginning on the first day following the due date and continuing until the last day of the calendar month in which said fees are submitted. These funds shall be pooled on a statewide basis and will be restricted and used to support the costs of the statewide planning and research cooperative systems.

Effective Date: 
Wednesday, March 16, 2011
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Section 86-1.27 - Federal upper limit compliance

86-1.27 Federal upper limit compliance.

In the event the State cannot provide assurances satisfactory to the secretary of the Department of Health and Human Services related to a comparison of rates of payment for general hospital inpatient services to beneficiaries of the title XIX program determined in accordance with this Subpart in the aggregate to maximum reimbursement payments provided in Federal law and regulation which are substantially the same as such assurances in effect on October 26, 1987 for purposes of securing Federal financial participation in such payments, such rates of payments shall be adjusted proportionally as necessary to meet Federal requirements for securing Federal financial participation.

Effective Date: 
Wednesday, March 16, 2011
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Section 86-1.28 - Adding or deleting hospital services or units

86-1.28 Adding or deleting hospital services or units.

(a) Notification of the elimination of a general hospital inpatient service or identifiable unit of such a service in instances in which the costs of such service are reflected in the rate calculated pursuant to this Subpart shall be submitted in writing by the facility to the department within 60 days of the elimination of such service or unit. If a rate is modified by the department as a result of such service or unit elimination, such rate shall be effective as of the date of the elimination of the service or unit.

(b) Notification of the establishment of a new hospital or of a new exempt unit of an existing hospital shall be submitted in writing by the facility to the department within 60 days of the establishment of such new hospital or such new unit. Thereafter the department shall establish inpatient rates for such new hospital or such new exempt unit in accordance with section 86-1.29 of this Subpart. Such rates shall be effective the first day of the month following 30 days after such notification or the date of the approved certificate of need (CON) certification, whichever is later.

Effective Date: 
Wednesday, March 16, 2011
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Section 86-1.29 - New hospitals and hospitals on budgeted rates

86-1.29 New hospitals and hospitals on budgeted rates.

(a)
New hospitals. Payments to new hospitals without adequate cost experience for inpatient acute care services that are not exempt from DRG case-based rates of payment shall be computed in accordance with this Subpart except as follows:

(1) Rates of payment shall be computed on the basis of 100 percent of the statewide base price determined pursuant to section 86-1.16 of this Subpart multiplied by the service intensity weight for each DRG set forth in section 86-1.18 of this Subpart.

(2) The WEF used to adjust the statewide base price shall be equal to 1.0 until adequate data becomes available.

(3) The indirect teaching adjustment shall be determined pursuant to the provisions of section 86-1.20 of this Subpart.

(4) The noncomparable operating costs of new facilities as defined in section 86-1.15 of this Subpart and direct graduate medical education costs shall consist of the hospital's budgeted operating costs for these services.

(b)
Hospitals on budgeted rates.Payments to hospitals without adequate cost experience whose rates are based on budgeted cost projections for inpatient acute care services that are not exempt from DRG case-based rates of payment shall be computed in accordance with this Subpart except as follows:
(1) Reimbursement for the costs of graduate medical education and non comparable services shall be calculated pursuant to the provisions of paragraphs (a)(3) and (4) of this section.
(2) The WEF used shall be calculated for the facility based on available historical data.

Effective Date: 
Wednesday, March 16, 2011
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Section 86-1.30 - Swing bed reimbursement

86-1.30 Swing bed reimbursement. (a) Definitions. (1) For purposes of this section, eligible hospitals shall mean those hospitals defined as rural hospitals and meeting the swing bed program requirements in Part 406 of this Title.

(2) Rate shall mean the aggregate governmental payment made to eligible facilities per patient day as defined in section 86-2.8 of this Part for the care of patients receiving care pursuant to Title XIX of the federal Social Security Act (Medicaid).

(b) Rates of payment. Payments to eligible hospitals for patient days resulting from the usage of swing beds in caring for patients for whom it has been determined that inpatient hospital care is not medically necessary, but that skilled nursing or health related care is required, shall be determined as follows:

(1) The operating component of the rate shall consist of the following:

(i) a direct component which shall be equivalent to the 1988 statewide average direct case mix neutral cost per day for hospital-based residential health care facilities, after application of the Regional Direct Input Price Adjustment Factor (RDIPAF) as determined pursuant to Subpart 86-2 of this Part, trended to the appropriate rate year;

(ii) an indirect component which shall be equivalent to the 1988 statewide average indirect cost per day for hospital-based residential health care facilities, after application of the RDIPAF pursuant to Subpart 86-2 of this Part, trended to the appropriate rate year;

(iii) a non-comparable component which shall be equivalent to the 1988 statewide average non-comparable cost per day for hospital-based residential health care facilities, trended to the appropriate rate year.

(2) For general hospitals with more than 49 beds, the maximum number of days for which the operating component of the rate as defined in paragraph (1) of this subdivision shall be paid shall be equivalent to fifteen (15) percent of a hospital's total annual patient days for acute, exempt unit, and alternate level of care services, excluding swing bed days.

(3) The operating component of the rate as defined in paragraph (1) of this subdivision shall be paid for the first sixty (60) days per year during which a patient is receiving care as a participant in the swinged program. Any patient stay in excess of sixty (60) days per year shall be reimbursed at the prevailing average rate paid for the care of Alternate Level of ALC) patients pursuant to the provisions of Section 86-1.56 of this Subpart. The sixty-day period shall begin the first day on which the patient receives care as a participant in the swing bed program.

(4) A capital cost per diem shall be paid on the basis of budgeted capital costs allocated to the swing bed program, pursuant to the provisions of section 86-1.59 of this Subpart, divided by patient days associated with the swing bed program, reconciled to actual total capital expense.

(c) Payments from all other payors. Payments to eligible hospitals for care provided to patients under the swing bed program by any non-governmental payor shall be at a per diem rate as established by such eligible hospital.

Effective Date: 
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Section 86-1.31 - Mergers, acquisitions and consolidations

86-1.31 Mergers, acquisitions and consolidations.

(a)
Rates of Payment.As used in this section, the terms merger, acquisition and consolidation shall mean the combining of two or more general hospitals licensed under Article 28 of the Public Health Law, where such combination is consistent with the public need, would create a new, more economical entity, reduce the costs of operation, result in the reduction of beds and/or improve service delivery.

Payments for hospitals subject to a merger, acquisition or consolidation for inpatient acute care services that are not otherwise exempt from DRG case-based rates of payment will be effective on the date the transaction is effected and shall be computed in accordance with this Subpart except as follows:
(1) The WEF used to adjust the statewide base price shall be calculated by combining all components used in the calculation pursuant to section 86-1.19 of this Subpart for all hospitals subject to the merger, acquisition or consolidation.
(2) The direct GME payment per discharge added to the case payment rates of teaching hospitals shall be calculated by dividing the total reported Medicaid direct GME costs for all teaching hospitals subject to the merger, acquisition, or consolidation by the total reported Medicaid discharges reported by such hospitals in the applicable base period.
(3) The indirect GME payment per discharge added to the case payment rates of teaching hospitals shall be calculated in accordance with section 86-1.20 of this Subpart, except the ratio of residents to beds used in the calculation shall be based on the total residents and beds of all such hospitals subject to the merger, acquisition, or consolidation.
(4) The non-comparable payment per discharge added to the case payment rates shall be calculated by dividing the total reported Medicaid costs for qualifying non-comparable cost categories for all hospitals subject to the merger, acquisition, or consolidation by the total reported Medicaid discharges reported by such hospitals in the applicable base period.

(b)
Closures, mergers, acquisitions, consolidations and restructurings.

(1) The commissioner may grant approval of a temporary adjustment to the non-capital components of rates calculated pursuant to this subpart for eligible general hospitals.

(2) Eligible facilities shall include:

(i) facilities undergoing closure;

(ii) facilities impacted by the closure of other health care providers;

(iii) facilities subject to mergers, acquisitions, consolidations or restructuring; or

(iv) facilities impacted by the merger, acquisition, consolidation or restructuring of other health care providers.

(3) Facilities seeking rate adjustments under this section shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care services; or

(iv) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

(4) (i) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this section shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the facility shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the facility’s written proposal as approved by the commissioner and may also require that the facility submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the facility’s temporary rate adjustment prior to the end of the specified timeframe.

(ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

Effective Date: 
Tuesday, July 3, 2012
Doc Status: 
Complete

Section 86-1.32 - Administrative rate appeals

86-1.32 Administrative rate appeals.

(a) Administrative rate appeals of rates of payment issued pursuant to this Subpart must be submitted to the department in writing within 120 days of the date such rates are issued by the department to the facility. Such rate appeals must set forth in detail the basis for such appeal and be accompanied by any relevant documentation. Thereafter the department shall respond to such rate appeals in writing and shall either affirm the original rates, revise such rates or request additional information. A failure to respond to the department's request for additional information within 30 days shall be deemed to constitute the withdrawal, with prejudice, of the facility's rate appeal, provided, however, that the department may extend that time period upon a request by the facility and for good cause shown. Upon its receipt of the requested additional information the department shall issue a written determination of such rate appeal.

(b) The department's written determination of a facility's rate appeal shall be deemed final unless the facility submits a written request for further consideration of the rate appeal within 30 days of the date the department issued such written determination, provided, however, that if such written determination advises the facility that its rate appeal is being denied on the ground that the appeal constitutes a challenge to the rate-setting methodology set forth in this Subpart, such denial shall be deemed to be the department's final administrative determination with regard to such appeal and there shall be no further administrative review available. The department shall otherwise respond in writing to such further appeal and either affirm or revise its original rate appeal determination and this response by the department shall be deemed its final administrative determination with regard to such rate appeal.

(c) Rate appeals which are rejected or precluded on the grounds of being untimely may be considered in connection with subsequent audits conducted pursuant to section 86-1.4 of this Subpart.

(d) The department shall consider only those rate appeals that reflect one or more of the following bases.

(1) Mathematical or clerical errors in the financial and/or statistical data originally submitted by the medical facility, including information reported to the New York State Statewide Planning and Research Cooperate System (SPARCS) in accordance with section 400.18 of this Title, or mathematical or clerical errors made by the department. Revised data submitted by a facility must meet the same certification requirements as the original data and the department may require verification of revised SPARCS data by an independent review agent at the cost of the facility; and

(2) Any errors regarding a medical facility's capital cost reimbursement.

(3)(i) Direct medical education (DME) and indirect medical education (IME) costs, as defined in sections 86-1.15(f)(1) and (f)(2) of this Subpart, for hospitals where the teaching status has changed from non-teaching to teaching.

(ii) The effective date of the initial rate adjustment shall be the later of the first of the month following 60 days from the department's receipt of the written notification with documentation requesting a rate adjustment or July 1st of the program year.

(e) The department may refuse to accept or consider a rate appeal from a facility that:

(1) is providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council; or

(2) is operated by the same management that operates a facility with regard to which a determination of an unacceptable level of care has been made in accordance with paragraph (1) of this subdivision; or

(3) has been determined by the department as being operated by a person or persons not properly established or licensed pursuant the Public Health Law; or

(4) is delinquent in the payment of a fine or penalty imposed on the facility pursuant to the Public Health Law.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.33 - Out-of-state providers

86-1.33 Out-of-state providers.

(a) For discharges occurring on and after December 1, 2009, rates of payment for inpatient hospital services provided by out-of-state providers in accordance with the prior approval requirements set forth in section 365-a(4)(d) of the Social Services Law shall be as follows:

(1) (i) The weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall apply with regard to services provided by out-of-state providers located in the New Jersey counties of Sussex, Passaic, Bergin, Hudson, Essex, Union, Middlesex and Monmouth, in the Pennsylvania county of Pike, and in the Connecticut counties of Fairfield and Litchfield.

(ii) For rates effective beginning January 1, 2014, the weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the downstate region of New York State shall also apply with regard to services provided by out-of-state providers located in cities where the city's population census is 500,000 or greater based on the U.S. Department of Commerce United States Census Bureau; and

(2) The weighted average of inpatient rates, including a teaching adjustment where applicable, in effect for similar services for hospitals located in the upstate region of New York State shall apply with regard to all other out-of-state providers.

(3) High cost outlier rates of payment shall be calculated in accordance with 86-1.21 with the exception of the wage equalization factor (WEF) being based upon the weighted average of the upstate or downstate region.

(4) The weighted average of the capital component of the inpatient rates in effect for similar services for hospitals located in New York State shall apply with regard to services provided by out-of-state providers.

(b) Notwithstanding any inconsistent provision of this section, in the event the department determines that an out-of-state provider is providing services that are not available within New York State, the department may negotiate payment rates and conditions with such provider; provided however, such payments shall not exceed the provider’s usual and customary charges for such services.

(c) For purposes of this section, the downstate region of New York State shall consist of the New York counties of Bronx, New York, Kings, Queens, Richmond, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess, and the upstate region of New York State shall consist of all other New York counties.

Effective Date: 
Wednesday, July 9, 2014
Doc Status: 
Complete

Section 86-1.34 - Supplemental indigent care distributions

86-1.34 Supplemental indigent care distributions.

(a) For the period prior to December 31, 2009:

(i) $307 million shall be distributed to facilities designated by the department as teaching hospitals as of December 31, 2008, to compensate such facilities for Medicaid and self-pay losses pursuant to the following schedule of payments:

(ii) $25 million shall be distributed to non-major public hospitals having Medicaid discharges of 40 percent or greater as determined by the commissioner from data reported in each hospital's 2007 annual cost report, to compensate each hospital's decrease in Medicaid revenue resulting from the trend factor reductions and the inpatient reimbursement methodology changes reflected in this Subpart pursuant to the following schedule of payments:

(b) For annual periods beginning on and after January 1, 2010:

(i) From regional allotments specified below, $269.5 million shall be distributed to non-major public teaching hospitals on a regional basis to cover each eligible facility's proportional regional share of 2007 uncompensated care, as defined in section 2807-k(5-a)(c) of the Public Health Law and offset by disproportionate share payments received by each facility during calendar year 2010 in accordance with sections 2807-k and 2807-w of the Public Health Law and subdivision (a) of this section:

(ii) $25 million shall be distributed to non-major public hospitals having Medicaid discharges of 40 percent or greater as determined by the commissioner from data reported in each hospital's 2007 annual cost report in accordance with the methodology and schedule of payments set forth in paragraph (ii) of subdivision (a) of this section.

(iii) $24.5 million shall be distributed as non-Medicaid grants to non-major public academic medical centers pursuant to the following schedule of payments:

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.35 - Disproportionate share limitations

86-1.35 Disproportionate share limitations.

(a) Disproportionate share payment distributions made to general hospitals pursuant to Article 28 of the Public Health Law shall be limited in accordance with the provisions of this section. The latest available annual cost report submitted by a hospital prior to the disproportionate share distribution period shall be used to determine eligibility pursuant to subdivision (b) of this section and for projected limits pursuant to subdivision (e) of this section. Annual cost reports having an end date in the applicable annual disproportionate share distribution period, or for certain State-operated general hospitals, annual cost reports having an end date in the subsequent annual disproportionate share distribution period, shall be used to reconcile limits pursuant to subdivision (f) of this section.

(b) General hospitals whose inpatient Medicaid eligible patient days are less than one percent of total inpatient patient days shall not be eligible to receive disproportionate share distributions.
(c) No general hospital shall receive in total from disproportionate share payment distributions an amount which exceeds the costs incurred during the periods described in subdivision (a) of this section for furnishing inpatient and ambulatory hospital services to individuals who are eligible for medical assistance benefits pursuant to Title XIX of the Federal Social Security Act (hereinafter referred to as "Medicaid cost") or to individuals who have no health insurance for the services provided or other source of third party coverage (hereinafter referred to as "self- pay cost"), reduced by medical assistance payments made pursuant to Title XIX of the Federal Social Security Act (hereinafter referred to as "Medicaid revenue"), other than disproportionate share payments, and payments by uninsured patients. For purposes of this section, payments to a general hospital for services provided to indigent patients made by the State or a unit of local government within the State shall not be considered a source of third party payment.

(d) In order to ensure the continued flow of disproportionate share payments to hospitals, the commissioner shall make projections of each hospital's disproportionate share limitation based on the most current data available from the hospital's annual cost reports. The commissioner shall use annual cost reports in accordance with the provisions of subdivision (e) of this section to estimate Medicaid and self-pay costs in the projection methodology for a particular rate year. This shall be referred to as the "projection methodology". Subsequent to the receipt of a hospital's annual cost report having an end date in the applicable annual disproportionate share distribution period, or for certain state- operated general hospitals whose annual cost reports have an end date within the subsequent annual period, each hospital's disproportionate share limitation shall be reconciled to the actual rate year data. This shall be referred to as the "reconciliation methodology".
(e)
Projection methodology. Each hospital's projected disproportionate share limitation for each rate year shall be the sum of its inpatient and outpatient Medicaid and uninsured gains/(losses) as calculated using reported base year data and statistics from the year two years immediately preceding the rate year and as used for projection methodology purposes for that prior year.
(f)
Reconciliation methodology.The commissioner shall revise the projected limitation based on actual data reported to the commissioner for such rate year in accordance with the following and in accordance with final regulations issued by the federal Department of Health and Human Services implementing 42 USC section 1396r-4. The commissioner shall revise the projected limitations for each hospital within eight months from the date required reports are submitted to the department, except if such reports are determined to be unacceptable by the department. For hospitals which have submitted unacceptable reports, the commissioner shall revise the projected limitations within eight months from the date acceptable reports have been resubmitted to the department.
(1) Each hospital shall submit, by the same date the annual cost reports are required to be filed pursuant to section 86-1.2 of this Subpart, a disproportionate share limitation schedule in a form and manner prescribed by the commissioner within which the hospital shall calculate, in accordance with the instructions, its inpatient and outpatient Medicaid and self-pay gains/(losses) during the cost reporting year. The disproportionate share limitation schedule shall be accompanied by a certification by the hospital's independent public accountant which provides the commissioner sufficient assurance as to the accuracy of the information contained in such schedule.
(i) The final limit shall be calculated by excluding inpatient and outpatient Medicaid revenue impacts resulting from prospective adjustments to rates for periods prior to the implementation of the Federal hospital specific disproportionate share payment limits from the inpatient and outpatient Medicaid and self-pay gains/(losses) reported on the disproportionate share payment limitation schedule.
(2) Failure of a hospital to submit the information required by this section in a form acceptable to the commissioner shall result in the immediate withholding of all subsequent disproportionate share distributions. Such withholding shall continue until the hospital complies with the reporting requirements of this subdivision.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.36 - Hospital physician billing

86-1.36 Hospital physician billing.

(a) With the exception of hospitals designated under the Medicare program as meeting the criteria set forth in section 1861(b)(7) of the federal Social Security Act, for discharges occurring on and after February 1, 2010, hospitals may bill for physician services in accordance with the applicable Medicaid physician fee schedule in addition to billing the applicable DRG.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.37 - Readmissions

86-1.37 Readmissions
(a) For discharges occurring on and after July 1, 2010, Medicaid rates of payment to hospitals that have an excess number of readmissions as defined in accordance with the criteria set forth in subdivision (c), as determined by a risk adjusted comparison of the actual and expected number of readmissions in a hospital as described by subdivision (d), shall be reduced in accordance with subdivision (e).
(b) Definitions. For purposes applicable to this section the following terms shall be defined as follows:
(1) Potentially Preventable Readmission (PPR) shall mean a readmission to a hospital that follows a prior discharge from a hospital within 14 days, and that is clinically-related to the prior hospital admission.
(2) Hospital shall mean a general hospital as defined pursuant to section 2801 of the Public Health Law.
(3) Observed Rate of Readmission shall mean the number of admissions in each hospital that were actually followed by at least one PPR divided by the total number of admissions.
(4) Expected Rate of Readmission shall mean a risk adjusted rate for each hospital that accounts for the severity of illness, APR-DRG, and age of patients at the time of discharge preceding the readmission.
(5) Excess Rate of Readmission shall mean the difference between the observed rates of potentially preventable readmissions and the expected rate of potentially preventable readmissions for each hospital.
(6) Behavioral Health shall mean an admission that includes a primary or secondary diagnosis of a major mental health related condition, including, but not limited to, chemical dependency and substance abuse.
(7) Managed Care Encounter Data shall mean claims-like data that describes services provided by managed care plans to their enrollees.
(c) Readmission Criteria.
(1) A readmission is a return hospitalization following a prior discharge that meets all of the following criteria:
(i) The readmission could reasonably have been prevented by the provision of appropriate care consistent with accepted standards in the prior discharge or during the post discharge follow-up period.
(ii) The readmission is for a condition or procedure related to the care during the prior discharge or the care during the period immediately following the prior discharge and including, but not limited to:

(a) The same or closely related condition or procedure as the prior discharge.

(b)An infection or other complication of care.

(c)A condition or procedure indicative of a failed surgical intervention.

(d)An acute decompensation of a coexisting chronic disease.
(iii) The readmission is back to the same or to any other hospital.
(2) Readmissions, for the purposes of determining PPRs, excludes the following circumstances:
(i) The original discharge was a patient initiated discharge and was Against Medical Advice (AMA) and the circumstances of such discharge and readmission are documented in the patient's medical record.
(ii) The original discharge was for the purpose of securing treatment of a major or metastatic malignancy, multiple trauma, burns, neonatal and obstetrical admissions.
(iii) The readmission was a planned readmission or one that occurred on or after 15 days following an initial admission.
(iv) For readmissions occurring during the period up through March 31, 2012, the readmission involves an original discharge determined to be behavioral health related.
(d) Methodology.
(1) Rate adjustments for each hospital shall be based on such hospital's 2007 Medicaid paid claims data and managed care encounter data for discharges that occurred between January 1, 2007 and December 31, 2007.
(2) The expected rate of readmissions shall be reduced by 24% for each hospital for periods prior to September 30, 2010; 38.5% for the period October 1, 2010 through December 31, 2010; and 33.3% on and after January 1, 2011.
(3) Excess readmission rates are calculated based on the difference between the observed rate of PPRs and the expected rate of PPRs for each hospital.
(4) In the event the observed rate of PPRs for a hospital is lower than the expected rate of PPRs, the excess number of readmissions shall be set at zero.
(e) Payment Calculation.
(1) For the excess readmissions identified in paragraph (3) of subdivision (d) of this section, each hospital's projected payment rate for the 2010 rate period, as otherwise computed in accordance with this subpart, will be used to compute the relative aggregate payments, excluding behavioral health, associated with the risk adjusted excess readmissions in each hospital.
(2) For each hospital, a hospital specific readmission adjustment factor shall be computed as one minus the ratio of the hospital's relative aggregate payments associated with the excess readmissions from paragraph (3) of subdivision (d) of this section and the hospital's relative aggregate payments for all non-behavioral health Medicaid discharges as determined pursuant to this subdivision.
(3) Non-behavioral health related payments to hospitals shall be reduced by applying the hospital readmission adjustment factor from paragraph (2) of this subdivision to the applicable case payment or per-diem payment amount for all non-behavioral health related Medicaid discharges to the hospital.

Effective Date: 
Wednesday, February 23, 2011
Doc Status: 
Complete

Section 86-1.38 - Transition pool for 2010-2013 period

86-1.38 Transition pool for 2010-2013 period.

(a) Subject to the availability of federal financial participation, the commissioner may, for rate periods effective on and after October 20, 2010, increase inpatient Medicaid fee-for-service rates subject to this Subpart for the following periods and in the following amounts:

(1) for the period October 20, 2010 through March 31, 2011, up to thirty-seven million five hundred thousand dollars;

(2) for the period April 1, 2011 through March 31, 2012, up to seventy-five million dollars;

(3) for the period April 1, 2012 through March 31, 2013, up to fifty million dollars;

(4) for the period April 1, 2013 through March 31, 2014, up to twenty-five million dollars.

(b) The distributions authorized pursuant to this section shall be made available through a reduction, as determined by the commissioner, in the state-wide base price as otherwise computed in accordance with this Subpart.

(c) Hospitals eligible for distributions pursuant to this section shall be public and non-public general hospitals with Medicaid inpatient discharges equal to or greater than seventeen and one-half percent as reported for the 2007 period.

(d) Funds allocated pursuant to this section shall be allocated to eligible hospitals pursuant to a formula, as determined by the commissioner, such that, to the extent of funds available, no hospital’s reduction in total Medicaid fee-for-service inpatient revenue for the corresponding rate periods, as a result of the application of otherwise applicable rate-setting methodologies in effect for such periods, exceeds a percentage reduction as determined by the commissioner.

(e) Hospitals receiving funds pursuant to this section that did not previously receive funds to facilitate improvements in hospital operations and finances beginning on December 1, 2009, shall, as a condition for eligibility for such funds, adopt a resolution of the Board of Directors of each such hospital setting forth its current financial condition, including ongoing board oversight, and shall, after two years, issue a report as adopted by each such Board of Directors setting forth what progress has been achieved regarding such improvement, provided, however, if such report fails to set forth adequate progress, as determined by the Commissioner, the Commissioner will deem such facility ineligible for further distributions pursuant to this section and will redistribute such further distributions to other eligible facilities in accordance with the provisions of this section. The Commissioner shall be provided with copies of all such resolutions and reports.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.39 - Inpatient psychiatric services

86-1.39 Inpatient psychiatric services. Inpatient psychiatric services provided in general hospitals, or distinct units of general hospitals, specializing in such inpatient psychiatric services, with regard to patients admitted on and after October 20, 2010, shall be reimbursed on a per diem basis in accordance with the following, provided, however, that such rates applicable to inpatients otherwise subject to the provisions of public health law section 2807-c(1)(a-2)(i) shall be effective with regard to patients admitted on and after January 1, 2011:

(a) Such reimbursement shall be based on the All Patient Refined Diagnostic Related Group (APR-DRG) patient classification system as defined in section 86-1.15(a) of this Subpart.

(b) The operating component of the rate shall be based on a statewide price, utilizing 2005 Medicaid fee-for-service (FFS) inpatient costs adjusted for case mix and the Wage Equalization Factor (WEF) and excluding costs for Direct GME, Electroconvulsive Therapy, and capital costs.

(c) The capital cost components of rates computed pursuant to this section shall be computed on the basis of budgeted capital costs allocated to the hospital, or to the distinct unit of a hospital, in accordance with the provisions of section 86-1.25 of this Subpart divided by the hospital or distinct unit patient days and reconciled to actual total expenses.

(d) The non-operating component of the rate shall reflect 2005 Medicaid fee-for-service Direct GME costs.

(e) The statewide price shall be adjusted for each patient to reflect the following factors:

(1) a service intensity weight (SIW) associated with the case based on the grouper assigned APR-DRG, as described in subdivision (f) of this section, will be applied to the adjusted operating per diem;

(2) a rural adjustment factor of 1.2309 will be applied to the operating per diem for those hospitals designated as rural hospitals;

(3) an age adjustment payment factor of 1.0872 will be applied to the per diem operating component for adolescents ages 17 and under;

(4) a payment adjustment factor of 1.0599 will be applied to the operating component for the presence of a mental retardation diagnosis;

(5) the payment methodology shall include one co-morbidity factor per stay and if more than one co-morbidity is presented, the co-morbidity that reflects the highest payment factor shall be used to adjust the per diem operating component; and

(6) a variable payment factor will be applied to the operating per diem for each day of the stay, with the factor for days 1 through 4 established at 1.2, the factor for days 5 through 11 established at 1.0, the factor for days 12 through 22 established at 0.96 and the factor for stays longer than 22 days established at 0.92.

(f) (1) The table of service intensity weights (SlW's) applicable to rates set pursuant to this section for each effective period is published on the New York State Department of Health website at

http://www.health.ny.gov/nysdoh/hospital/drg/index.htm
and reflects the cost weights assigned to each All Patient Refined (APR) diagnosis related group (DRG) patient classification category. The SIWs assigned to each DRG/APR indicates the relative cost variance of that DRG/APR classification from the average cost of all inpatients in all DRG/APRs. Such SIWs are developed using two years of Medicaid fee-for-service cost data as reported to the Statewide Planning and Research Cooperative System (SPARCS) for the years set forth in paragraph (2) of this subdivision. Costs associated with hospitals that do not have an ancillary charge structure and costs associated with statistical outliers shall be excluded from the SIW calculations.

(2) For rate periods on and after the effective date of this section the SIW shall be computed using SPARCS and reported cost data from the 2005 and 2006 calendar years, as submitted to the department by September 30, 2009.

(g) The table of co-morbidity factors applicable to the rate adjustments described in paragraph (5) of subdivision (e) of this section is published on the New York State Department of Health website at

http://www.health.state.ny.us/
.

(h) The first day of a patient's readmissions to the same hospital within thirty days of discharge will be treated as day four for purposes of the variable payment factor computed pursuant to paragraph (6) of subdivision (d) of this section, with subsequent days treated in a conforming manner with the provisions of such paragraph.

(i) Reimbursement for physician services shall not be included in rates set pursuant to this section and such services may be billed on a fee-for-services basis as otherwise provided by applicable provisions of law.

(j) Reimbursement for Electroconvulsive Therapy shall be established at a statewide fee of $281, as adjusted for each facility's WEF, for each treatment during a patient's stay.

(k) Reimbursement for days of alternative level of care for patients whose reimbursement is otherwise subject to this section shall be in accordance with section 86-1.22 of this Subpart.

(l) New inpatient psychiatric exempt hospitals or units established pursuant to article 28 of the public health law shall be reimbursed at the statewide price plus budgeted capital and Direct GME.

(m) For rate periods through December 31, 2014, reimbursement pursuant to this section shall include transition payments of up to twenty-five million dollars on an annualized basis, which shall be distributed in accordance with the following:

(1)(i) Fifty percent of such payments shall be allocated to facilities that experience a reduction in Medicaid operating revenue in excess of threshold percentage set forth in subparagraph (ii) of this paragraph as a result of the implementation of rates set pursuant to this section. Such payments shall be allocated proportionally, based on each eligible facility's relative Medicaid operating revenue loss in excess of the threshold, as determined by the commissioner.

(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 6.02%.

(2)(i) Fifty percent of such payments shall be allocated to facilities with regard to which it is determined by the commissioner that rates otherwise set pursuant to this section result in Medicaid revenue that is less than the facility's Medicaid costs by a threshold percentage in excess of the threshold percentage set forth in subparagraph (ii) of this paragraph. Such payments shall be allocated proportionally, based on the degree each facility Medicaid operating revenue shortfall exceeds such threshold percentage. For those facilities without available Medicaid fee-for-service cost data, computations pursuant to this paragraph shall be based on each such facility's total operating costs as determined by the commissioner.

(ii) The threshold percentage described in subparagraph (i) of this paragraph shall be 1.20%.

(n) For rate period after October 20, 2010 through March 31, 2011, reimbursement pursuant to this paragraph may include transition payments totaling, in aggregate, up to twelve million dollars and distributed to eligible hospitals in accordance with the following, provided, however, that if less than twelve million dollars is distributed in such rate period, then additional distributions of up to such twelve million dollars may be made in accordance with the provisions of this subdivision in subsequent rate periods:

(1) Eligible hospitals shall be those general hospitals which receive approval for certificate-of-need applications submitted to the Department of Health between April 1, 2010 and March 31, 2011 for adding new behavioral health beds to their certified bed capacity as a direct result of the decertification of other general hospital behavioral health inpatient beds in the same service area, or which the Commissioner of Health, in consultation with the Commissioner of Mental Health, has determined have complied with Department of Health requests to make other significant behavioral health service delivery adjustments in direct response to such decertification.

(2) Eligible hospitals shall, as a condition of their receipt of such rate adjustments, submit to the Department of Health proposed budgets for the expenditure of such additional Medicaid payments for the purpose of providing behavioral health services and such budgets must be approved by the Department of Health, in consultation with the Office of Mental Health, prior to such rate adjustments being issued.

(3) Distributions made pursuant to this paragraph shall be made as add-ons to each eligible facility's inpatient Medicaid rate and shall be allocated proportionally, based on the proportion of each approved hospital budget to the total amount of all approved hospital budgets and such distributions shall be subsequently reconciled to ensure that actual aggregate expenditures are within available aggregate funding.

Effective Date: 
Wednesday, March 16, 2011
Doc Status: 
Complete

Section 86-1.41 - Hospital Quality Contribution

86-1.41 - Hospital Quality Contribution.

(a) For the period July 1, 2011 through March 31, 2012 a quality contribution shall be imposed on the inpatient revenue of each general hospital that is received for the provision of inpatient obstetrical patient care services in an amount equal to 2.4% of such revenue, as defined in Section 2807-d(3)(a) of the Public Health Law.

(b) For the period on and after April 1, 2012, a quality contribution shall be imposed on the inpatient revenue of each general hospital that is received for the provision of inpatient obstetrical patient care services in an amount equal to 1.6% of such revenue, as defined in Section 2807-d(3)(a) of the Public Health Law.

(c) For the purposes of computing revenue subject to this section, inpatient obstetrical patient care services shall also include services related to the care of newborns, but shall exclude neonatal intensive care services.

(d) The funds collected pursuant to this section shall be subject to and administered in accordance with the provisions of Section 2807-d-1 of the Public Health Law.

Effective Date: 
Wednesday, February 15, 2012
Doc Status: 
Complete

Section 86-1.42 - Potentially preventable negative outcomes

86-1.42 Potentially preventable negative outcomes.

(a) Effective for discharges occurring on or after July 1, 2011, payments pursuant to this Subpart shall be denied with regard to the following potentially preventable negative outcomes if they are acquired during a patient's inpatient stay at the hospital seeking such payments:

(1) A foreign object retained within a patient's body after surgery.

(2) The development of an air embolism within a patient's body.

(3) A patient blood transfusion with incompatible blood.

(4) A patient's development of stage III or stage IV pressure ulcers.

(5) Patient injuries resulting from accidental falls and other trauma, including, but not limited to:

i. Fractures

ii. Dislocations

iii. Intracranial injuries

iv. Crushing injuries

v. Burns

vi. Electric shock

(6) A patient's manifestations of poor glycemic control, including, but not limited to:

i. Diabetic ketoacidosis

ii. Nonketotic hyperosmolar coma

iii. Hypoglycemic coma

iv. Secondary diabetes with ketoacidosis

v. Secondary diabetes with hyperosmolarity

(7) A patient's development of a catheter-associated urinary tract infection.

(8) A patient's development of a vascular catheter-associated infection.

(9) A patient's development of a surgical site infection following:

i. a coronary artery bypass graft – mediastinitis;

ii. bariatric surgery, including, but not limited to, laparoscopic gastric bypass, gastroenterostomy, and laparoscopic gastric restrictive surgery; or

iii. orthopedic procedures, including, but not limited to, such procedures performed on the spine, neck, shoulder and elbow.

10. A patient's development of deep vein thrombosis or a pulmonary embolism in connection with a total knee replacement or a hip replacement, excluding pediatric patients, defined as patients under eighteen years of age, and also excluding obstetric patients, defined as patients with at least one primary or secondary diagnosis code that includes an indication of pregnancy.

Effective Date: 
Wednesday, February 1, 2012
Doc Status: 
Complete

Section 86-1.43 - Certified home health care agency ceilings

86-1.43 Certified home health care agency ceilings

(a) Effective for services provided on and after April 1, 2011 through March 31, 2012, Medicaid payments for certified home health care agencies (agencies), except for such services provided to children under eighteen years of age, shall reflect ceiling limitations determined in accordance with this section. Ceilings for each agency shall be based on a blend of:

(1) the agency's 2009 average per patient Medicaid claim, weighted at 51 percent, and

(2) the 2009 statewide average per patient Medicaid claim for all agencies, as adjusted by the regional wage index factor and by each agency's patient case mix index, and weighted at 49 percent.

(b) Effective for rate periods on and after April 1, 2011, the Department shall determine, based on 2009 claims data, each agency's projected average per patient Medicaid claim for the period April 1, 2011 through March 31, 2012, as compared to the applicable ceiling computed pursuant to subdivision (a) of this section. To the extent that each agency's projected average claim is in excess of such ceiling, the Department shall reduce such agency's payments for periods on and after April 1, 2011 by an amount reflecting the degree that such agency's projected average claim is in excess of such ceiling.

(c) The regional wage index factor (WIF) will be computed in accordance with the following and applied to the portion of the statewide average per patient Medicaid claim attributable to labor costs:

(1) Average wages will be determined for agency service occupations for each of the 10 labor market regions as defined by the New York State Department of Labor.

(2) The average wages in each region will be assigned relative weights in proportion to the Medicaid utilization for each of the agency service categories as reported in the most recently available agency cost report submissions.

(3) Based on the average wages as determined pursuant to paragraph (1) of this subdivision, as weighted pursuant to paragraph (2) of this subdivision, an index will be determined for each region, based on a comparison of the weighted average regional wages to the statewide average wages.

(4) The Department may adjust the regional WIFs proportionately, if necessary, to assure that the application of the WIFs is revenue-neutral on a statewide basis.

(d) Agency specific case mix indexes (CMIs) will be calculated for each agency and applied to the statewide average CMI. Computation of such CMIs shall utilize the episodic payment system grouper and shall reflect:

(1) 2009 adjusted agency Medicaid claims as grouped into 60 day episodes of patient care;

(2) data for each agency patient as derived from the federal Outcome Assessment Information Set (OASIS) and as reflecting the assignment of such patients to OASIS resource groups;

(3) the assignment of a relative weight to each OASIS resource group;

(4) the assignment of each agency's CMI index based on the sum of the weights for all of its grouped episodes of care divided by the number of episodes.

(e) Ceiling limitations determined pursuant to this section shall be subject to retroactive adjustment and reconciliation. In determining payment adjustments based on such reconciliation, adjusted agency ceilings shall be established. Such adjusted ceilings shall be based on a blend of: (i) an agency's 2009 average per patient Medicaid claim adjusted by the percentage of increase or decrease in such agency's patient case mix from the 2009 calendar year to the annual period April 1, 2011 through March 31, 2012, weighted at 51 percent, and; (ii), the 2009 statewide average per patient Medicaid claim adjusted by a regional wage index factor and the agency's patient case mix index for the annual period April 1, 2011 through March 31, 2012, weighted at 49 percent. Such adjusted agency ceiling shall be compared to actual Medicaid paid claims for the period April 1, 2011 through March 31, 2012. In those instances when an agency's actual average per patient Medicaid claim is determined to exceed the agency's adjusted ceiling, the amount of such excess shall be due from each such agency to the state and may be recouped by the Department in a lump sum amount or through reductions in the Medicaid payments due to the agency. In those instances where an interim payment or rate of payment adjustment was applied to an agency in accordance with subdivision (a) and such agency's actual average per patient Medicaid claim is determined to be less than the agency's adjusted ceiling, the amount by which such Medicaid claims are less than the agency's adjusted ceiling shall be remitted to each such agency by the Department in a lump sum amount or through an increase in the Medicaid payments due to the agency.

(f) Projected payment adjustments computed pursuant to subdivision (b) of this section shall be based on Medicaid paid claims, as determined by the Department, for services provided by agencies in the base year 2009. Amounts due or owed from reconciling projected payment adjustments pursuant to subdivision (e) of this section shall be based on Medicaid paid claims, as determined by the Department, for services provided by agencies in 2009 and Medicaid paid claims, as determined by the Department, for services provided by agencies in the reconciliation period April 1, 2011 through March 31, 2012.

(g) The Department may require agencies to collect and submit any data deemed by the Department to be required to implement the provisions of this section.

Effective Date: 
Wednesday, October 5, 2011
Doc Status: 
Complete

Section 86-1.44 - Episodic Payments for Certified Home Health Agency Services

86-1.44 Episodic Payments for Certified Home Health Agency Services

(a) Effective for services provided on and after May 2, 2012, Medicaid payments for certified home health care agencies ("CHHA"), except for such services provided to children under eighteen years of age and except for services provided to a special needs population of medically complex and fragile children, adolescents and young disabled adults by a CHHA operating under a pilot program approved by the Department, shall be based on payment amounts calculated for 60-day episodes of care.

(b) An initial statewide episodic base price, to be effective May 2, 2012, will be calculated based on paid Medicaid claims, as determined by the Department, for services provided by all certified home health agencies in New York State during the base period of January 1, 2009 through December 31, 2009.

(1) Such base price shall be calculated by grouping all Medicaid paid CHHA claims for dates of services in 2009 into 60 day episodes of care. All such 2009 episodes which include dates of service beginning in November or December of 2008 or ending in January or February of 2010 shall be included in such base price calculation. Low utilization episodes of care, as defined in subdivision (d) of this section, shall be excluded from such calculation. With regard to high utilization episodes of care, costs in excess of outlier thresholds, as determined in accordance with subdivision (e) of this section, shall be excluded from such calculation. The resulting base price shall be subject to such further adjustment as is required to comply with the aggregate savings mandated by paragraph (b) of subdivision 13 of section 3614 of the Public Health Law ("PHL").

(2) The episodic base price for periods beginning on or after April 1, 2013, may be based on paid Medicaid claims for services provided by all certified home health agencies during a base year period subsequent to 2009, as determined by the Department.

(3) The applicable base year for determining the base price shall be updated not less frequently than every three years.

(c) The base price paid for 60-day episodes of care shall be adjusted by an individual patient case mix index as determined pursuant to subdivision (f) of this section; and also by a regional wage index factor as determined pursuant to subdivision (h) of this section. Such case mix adjustments shall include an adjustment factor for CHHAs providing care primarily to a special needs patient population coming under the jurisdiction of the Office of People With Developmental Disabilities (OPWDD) and consisting of no fewer than two hundred such patients.

(d) Notwithstanding any inconsistent provision of this section, payments for low utilization cases shall be based on the statewide weighted average of fee-for-service rates for such services, as determined by the Department and as adjusted by the applicable regional wage index factor as described in subdivision (h) of this section. For purposes of this section, low utilization cases will be defined as 60 day episodes of care with a total cost of $500 or less, based on statewide weighted average fee-for-service rates paid on a per-visit, per-hour, or other appropriate historical basis.

(e) (1) Payments for 60-day episodes of care shall be adjusted for high-utilization cases in which total costs, based on statewide weighted average fee-for-service rates as determined by the Department and as paid on a per-visit, per-hour, or other appropriate historical basis, exceed outlier cost thresholds determined by the Department for each case mix group. In such cases the provider will receive the adjusted episodic base payment pursuant to subdivisions (b) and (c) of this section, plus a percentage, to be determined by the Department, of the cost which exceeds the outlier threshold, as adjusted by the regional wage index factor, provided, however, that such adjustment percentage is subject to such further adjustment as may be necessary to comply with the aggregate savings mandated by PHL section 3614(13)(b).

(2) The outlier threshold for each resource group, as described in subdivision (f) of this section, shall be equal to a specified percentile of all episodic claims totals for the resource group during the base period, excluding low utilization episodes. Such percentiles shall range from the seventieth percentile for groups with the lowest case mix index to the ninetieth percentile for groups with the highest case mix index.

(f) The case mix index to be applied to each episodic claim, excluding low utilization claims, shall be based on patient information contained in the federal Outcome Assessment Information Set (OASIS) for the episode. The patient shall be assigned to a resource group based on data that includes, but is not limited to, clinical and functional information, age group, and the reason for the assessment. A case mix index shall be calculated for each resource group based on the relative cost of paid claims during the base period.

(g) Reimbursement for maternity patients, defined as patients who are currently or were recently pregnant and are receiving treatment as a direct result of such pregnancy, may be made pursuant to this section without the submission of an OASIS form, provided that providers billing for such patients must bill in accordance with such special billing instructions as may be established by the commissioner and such patients shall be grouped in a case mix designation based on the lowest acuity resource group.

(h) The regional wage index factor (WIF) shall be computed in accordance with the following and applied to the portion of the episodic base price attributable to labor costs:

(1) Average wages shall be determined for agency health care service occupations for each of the 10 labor market regions in New York, as defined by the New York State Department of Labor.

(2) The average wages in each region shall be assigned relative weights in proportion to the Medicaid utilization for each of the agency service categories as reported in the most recently available agency cost report submissions.

(3) Based on the average wages as determined pursuant to paragraph (1) of this subdivision, as weighted pursuant to paragraph (2) of this subdivision, an index shall be determined for each region, based on a comparison of the weighted average regional wages to the statewide average wages.

(4) The Department may adjust the regional WIFs proportionately, if necessary, to assure that the application of the WIFs is revenue-neutral on a statewide basis.

(i) Payments for episodes of care shall be proportionally reduced to reflect episodes of care totaling less than 60 days, provided, however, that CHHAs providing episodes of care totaling less than 60 days as a result of the following circumstances shall be reimbursed for a full 60 day episode:

(1) discharges from the CHHA resulting from a determination that the patient no longer requires CHHA care and may remain at home;

(2) transfer to a general hospital to receive acute care services;

(3) transfer to a hospice for end-of-life care; or

(4) the patient's death.

The commissioner shall monitor cases for which full payments are made for episodes of care of less than 60 days pursuant to the provisions of this subdivision and may require the CHHA to provide such information and documentation as the commissioner deems necessary to ensure quality of care.

(j) The Department may require agencies to collect and submit any data deemed by the Department to be required to implement the provisions of this section.

(k) Closures, mergers, acquisitions, consolidations, and restructurings.

(1) The commissioner may grant approval of a temporary adjustment to rates calculated pursuant to this section for eligible certified home health agencies.

(2) Eligible certified home health agency providers shall include:

(i) providers undergoing closure;

(ii) providers impacted by the closure of other health care providers;

(iii) providers subject to mergers, acquisitions, consolidations or restructuring; or

(iv) providers impacted by the merger, acquisition, consolidation or restructuring of other health care facilities.

(3) Providers seeking rate adjustments under this subdivision shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

(i) protect or enhance access to care;

(ii) protect or enhance quality of care;

(iii) improve the cost effectiveness of the delivery of health care services; or

(iv) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

(4) (i) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this subdivision shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the provider shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and applicable provisions of this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the provider’s written proposal as approved by the commissioner and may also require that the provider submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the provider’s temporary rate adjustment prior to the end of the specified timeframe.

(ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.45 - Reimbursement for language assistance services in hospital inpatient settings

86-1.45 - Reimbursement for language assistance services in hospital inpatient settings. For hospital inpatient services, in addition to the inpatient rates of payment computed in accordance with this Subpart, a separately billable rate of payment shall be available for providing language assistance services, if applicable, in accordance with the following:

(a) A discrete rate of payment for language interpretation services provided to patients with limited English proficiency (LEP) and communication services provided for patients who are deaf and hard of hearing will be established as follows:

(1) Payment will be established on a per unit basis with the unit of payment determined based on the number of minutes of language assistance service provided.

(2) A maximum of two billable units of language assistance services will be allowable per patient per day with the billable units defined as follows:

(i) 1st billable unit – for encounters providing up to and including the first 22 minutes of language assistance service.

(ii) 2nd billable unit – for encounters providing additional minutes (23+) beyond the initial 22 minutes of language assistance services during the given patient day.

(b) The rate of payment will be established at $11.00 per unit of language assistance service provided, with a maximum allowable payment per inpatient day of care of $22.00.

(c) To be reimbursable, the language assistance service must be provided by an independent third party, a dedicated hospital employee or a third party vendor (e.g., telephonic interpretation service) whose sole function is to provide interpretation services for individuals with LEP and communication services for people who are deaf and hard of hearing.

Effective Date: 
Wednesday, October 7, 2015

Section 86-1.46 - Empire Clinical Research Investigator Program (ECRIP)

86-1.46 Empire Clinical Research Investigator Program (ECRIP)

(a) Definitions. For purposes of this section, the following definitions shall apply:

(1)
Clinical researchmeans patient-oriented research, epidemiologic and behavioral studies, or outcomes research and health services research that are approved by an institutional review board by the time the research fellow position is filled.

(2)
Clinical research planmeans a plan submitted by a consortium or teaching general hospital for a research fellow position which demonstrates, in a form to be provided by the commissioner, the following:

(i) experience the sponsor-mentor, and for center distributions the director, has in clinical research and the medical field of the study;

(ii) methods, data collection and anticipated measurable outcomes of the clinical research to be performed;

(iii) training goals, objectives and experience the research fellow will be provided to assess a future career in clinical research;

(iv) scientific relevance, merit and health implications of the research to be performed;

(v) clear and comprehensive details on the research fellow position;

(vi) non-duplication with other clinical research positions from the same teaching general hospital or consortium;

(vii) methods to track the career of the research fellow once the term of the position is complete;

(viii) for center distributions, a budget including matching funds; and

(ix) any other information required by the commissioner to implement subparagraph (i) of paragraph (b) of subdivision five-a of section 2807-m of the public health law. The clinical research plan submitted in accordance with this paragraph may be reviewed by the commissioner in consultation with experts outside the department of health.

(3)
Clinical research positionmeans a post-graduate residency position which:

(i) shall not be required in order for the research fellow to complete a graduate medical education program;

(ii) may be reimbursed by other sources but only for costs in excess of the funding distributed in accordance with subparagraph (i) of paragraph (b) of subdivision five-a of section 2807-m of the public health law;

(iii) shall exceed the minimum standards that are required by the residency review committee in the specialty the research fellow has trained or is currently training;

(iv) shall not be previously funded by the teaching general hospital or supported by another funding source at the teaching general hospital in the past three years from the date the clinical research plan is submitted to the commissioner;

(v) may supplement an existing research project;

(vi) shall be equivalent to a full-time position comprising of no less than thirty-five hours per week;

(vii) shall provide, or be filled by a research fellow who has formalized instruction in clinical research, including biostatistics, clinical trial design, grant writing and research ethics; and further provides that

(viii) (a) for individual distributions, shall be supervised by a sponsor-mentor who must have been a principal investigator, co-principal investigator or co-investigator of a federal research grant in the past five years from the date the clinical research plan is submitted to the commissioner; or (b) for center distributions, shall be a member of a research team directed by a current principal investigator or co-principal investigator for an active grant from the National Institutes of Health and be supervised by a sponsor-mentor who must have been a principal investigator or co-principal investigator of a federal research grant within one year from the date the clinical research plan is submitted to the commissioner; and

(ix) shall be filled by a research fellow who is

(a) enrolled or has completed a graduate medical education program, as defined in paragraph (11) of this subdivision;

(b) a United States or Canadian citizen, national, or permanent resident of the United States or Canada; and

(c) a graduate of a medical, dental or podiatric school located in New York State, a graduate or resident in a graduate medical education program, as defined in paragraph (11) of this subdivision, where the sponsoring institution, as defined in paragraph (16) of this subdivision, is located in New York State, or resides in New York State at the time the clinical research plan is submitted to the commissioner.

(4)
Co-Investigatorshall mean a person who collaborates with the principal investigator or co-principal investigators in a grant proposal approved and awarded by a federal agency. Such person is responsible for certain aspects of the grant work but has no budget control.

(5)
Consortiummeans an organization or association, approved by the commissioner in consultation with the council, of general hospitals which provide graduate medical education, together with any affiliated site; provided that such organization or association may also include other providers of health care services, medical schools, payors or consumers, and which meet other criteria pursuant to subdivision six of section 2807-m of the public health law.

(6)
Co-Principal investigatorshall mean one of two people, if applicable, who conceived of and submitted a grant proposal approved and awarded by a federal agency. Such person is typically responsible for different aspects of the grant work with a separate budget from the second co-principal investigator.

(7)
Councilmeans the New York State Council on Graduate Medical Education.

(8)
Direct medical educationmeans the direct costs of residents, interns and supervising physicians.

(9)
Distribution periodmeans each calendar year set forth in subdivision two of section 2807-m of the public health law.

(10)
Facultymeans persons who are employed by or under contract for employment with a teaching general hospital or are paid through a teaching general hospital's affiliated faculty practice plan and maintain a faculty appointment at a medical school. Such persons shall not be limited to persons with a degree in medicine.

(11)
Graduate medical education programmeans a post-graduate medical education residency in the United States or Canada which has received accreditation from a nationally recognized accreditation body or has been approved by a nationally recognized organization for medical, osteopathic, podiatric or dental residency programs including, but not limited to, specialty boards.

(12)
Indirect medical educationmeans the estimate of costs, other than direct costs, of educational activities in teaching hospitals as determined in accordance with the methodology applicable for purposes of determining an estimate of indirect medical education costs for reimbursement for inpatient hospital service pursuant to title XVIII of the federal social security act (medicare).

(13)
Principal investigatorshall mean the person who conceived of and submitted a grant proposal approved and awarded by a federal agency. Such person directs the work and controls the budget of such a grant.

(14)
Research thememeans a clinical research topic that represents a strategically important growth area for the consortium or teaching general hospital. Such theme shall be in a field of study suitable to train a resident or residents and cannot be one that currently has federal research funding in the form of one or more National Institutes of Health program project grant, specialized center grant, or research program cooperative agreement at the consortium or teaching general hospital.

(15)
Residentmeans a person in a graduate medical education program that has received accreditation from a nationally recognized accreditation body or in a program approved by any other nationally recognized organization for medical, osteopathic or dental residency programs including, but not limited to, specialty boards.

(16)
Sponsoring institutionmeans the entity that has the overall responsibility for a program of graduate medical education. Such institutions shall include teaching general hospitals, medical schools, consortia and diagnostic and treatment centers.

(b) Within funding amounts set forth in paragraph (b) of subdivision (5-a) of section 2807-m of the public health law and appropriated to ECRIP, and with the objective of securing federal funding for biomedical research, training research fellows, recruiting national leaders as faculty to act as mentors, and training residents and fellows in biomedical research skills, the following distribution methodology shall apply:

(1) Distributions shall first be made to consortia and teaching general hospitals to fund individual ECRIP projects in accordance with subparagraph (i) of this paragraph with remaining funds being divided equally to fund center ECRIP distributions in accordance with subparagraph (ii) of this paragraph as follows:

(i) Individual distributions shall be made in the amount of seventy-five thousand dollars per research fellow position for up to two such positions within a two year period subject to a funding cap of one hundred fifty thousand dollars. Consortia and teaching general hospitals may fund such positions in consecutive or concurrent years.

(ii) Center distributions shall be made by dividing the remaining funds equally amongst all consortia and teaching general hospitals eligible for such distributions; provided that the consortia and teaching general hospitals are required to fund and train one research fellow position per one hundred thousand dollars received and shall provide a one hundred thousand dollar match in each distribution period regardless of the dollar amount distributed pursuant to this subparagraph. If a consortium or teaching general hospital receives a distribution of four hundred thousand dollars or more, excluding matching funds, in any distribution period then it may implement a secondary research theme in addition to the primary research theme. Distributions shall be made in increments determined by the commissioner.

(2) In order to be eligible for center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, each consortium and teaching general hospital shall provide a letter of intent to the commissioner indicating a primary research theme and may indicate a secondary research theme and a list of institutions collaborating in the clinical research plan. In addition, in order to be eligible for individual and center distributions pursuant to this section, each consortium and teaching general hospital shall provide to the commissioner by July first of each distribution period, the following data and information on a hospital-specific basis. Such data and information shall be certified as to accuracy and completeness by the chief executive officer, chief financial officer or chair of the consortium governing body of each consortium or teaching general hospital and shall be maintained by each consortium and teaching general hospital for five years from the date of submission. Such data and information shall only be submitted by teaching general hospitals currently receiving Medicaid reimbursement for direct or indirect graduate medical education and such submission is limited to either an individual distribution pursuant to subparagraph (i) of paragraph (1) of this subdivision or a center distribution pursuant to subparagraph (ii) of paragraph (1) of this subdivision, provided however, that a teaching general hospital with two or more campuses where one campus is the major teaching affiliate with one medical school and the other campus is the major teaching affiliate with another medical school each of which provides clinical services and research facilities at their respective campuses associated with the medical school, shall be eligible for a separate ECRIP distribution at each campus.

(i) For each research fellow position, information on the type, scope, training objectives, institutional support, clinical research experience of the sponsor-mentor, the name of a principal contact person responsible for tracking the career development of researchers placed in clinical research positions, as defined in paragraph (3) of subdivision (a) of this section, and who is authorized to certify to the commissioner that all the requirements of the clinical research training objectives set forth in this subparagraph shall be met.

(ii) General information on all institutions collaborating on the clinical research plan, including each institution’s role in the research and specific budget information;

(iii) Information for each sponsor/mentor, including experience in mentoring and current and pending federal research funding distribution;

(iv) Tracking information for all current and past research fellows, including but not limited to

(a) background information,

(b) employment history,

(c) research status,

(d) current research activities,

(e) research grants and support

(f) publications and presentations, and

(g) any other information necessary to track and obtain outcome data for all research fellows;

(v) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a description of the primary research theme and secondary research theme, if applicable, and how such themes build upon the existing research activities within the consortium or teaching general hospital;

(vi) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a description of relevant federal research funding opportunities (if any) and how the research team plans to target such funding;

(vii) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, identification of the research team director who must be a principal investigator or co- principal investigator of an active National Institutes of Health research grant;

(viii) Identification of all sponsor/mentors who: for center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, must have been principal investigators or co- principal investigators of a federal research grant within one year of submission of data pursuant to this subparagraph; and, for individual distributions pursuant to subparagraph (i) of paragraph (1) of this subdivision, must have been principal investigators, co- principal investigators or co-investigators of a federal research grant within five years of submission of data pursuant to this subparagraph;

(ix) For center distributions pursuant to subparagraph (ii) of paragraph (1) of this subdivision, a letter from the chief executive officer, chief financial officer or chair of the consortium governing body of each consortium or teaching general hospital attesting to the one hundred thousand dollar match required pursuant to subparagraph (ii) of paragraph (1) of this subdivision;

(x) Information on collaborations with entities located within New York State, including but not limited to, teaching general hospitals, universities, local health departments, government laboratories, and federally qualified health centers if applicable; and

(xi) For each research fellow position, information on the name, citizenship status, medical education and training, and medical license number of the research fellow, if applicable, shall be provided by December thirty-first of the calendar year in which the distribution is made;

(xii) Information on the status of the clinical research plan, accomplishments, changes in research activities, progress, and performance of the research fellow shall be provided upon completion of one-half of the award term;

(xiii) A final report detailing training experiences, accomplishments, activities and performance of the research fellow, and data, methods, results and analyses of the clinical research plan shall be provided three months after the research fellow position ends;

(xiv) Any other data or information required by the commissioner to implement this section.

Effective Date: 
Wednesday, February 19, 2014
Doc Status: 
Complete

Section 86-1.47 - Hospital indigent care pool payments

86-1.47 Hospital indigent care pool payments.

(a) Effective for periods on and after January 1, 2013, payments pursuant to subdivision 5-d of section 2807-k of the Public Health Law shall be made in accordance with the provisions of this section.

(b) For the purposes of distributions in accordance with this section, each hospital's relative uncompensated care need amount shall be determined in accordance with the following:

(1) All uninsured inpatient units of service as reported in Exhibit 32 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year, but excluding hospital-based residential health care facility ("RHCF") and hospice units of service, shall be multiplied by the average applicable Medicaid inpatient rate in effect for January 1 of the distribution year.

(2) All uninsured outpatient units of service as reported in Exhibit 33 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year, but excluding referred ambulatory and home health services, shall be multiplied by the average applicable Medicaid outpatient rate in effect for January 1 of the distribution year.

(3) The inpatient amounts determined pursuant to paragraph (1) of this subdivision for each hospital shall be summed and adjusted by a statewide inpatient cost adjustment factor equivalent to the aggregate sum of the inpatient uninsured units multiplied by the step-down cost per unit for each applicable inpatient service , excluding hospital-based RHCF and hospice services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (1) of this subdivision for all hospitals statewide.

(4) The outpatient amounts determined pursuant to paragraph (2) of this subdivision for each hospital shall be summed and adjusted by a statewide outpatient cost adjustment factor equivalent to the aggregate sum of the outpatient uninsured units multiplied by the step-down cost per unit for each applicable outpatient service, excluding referred ambulatory and home health services, for all hospitals statewide, divided by the aggregate sum of the amounts determined pursuant to paragraph (2) of this subdivision for all hospitals statewide.

(5) The adjusted inpatient and outpatient amounts determined pursuant to paragraphs (1) through (4) of this subdivision for each hospital shall be summed and reduced by the sum of all of the cash payments collected from such uninsured patients as reported in the Institutional Cost Report from the cost reporting year two years prior to the distribution year to determine each hospital's net adjusted uncompensated care need.

(6) The uncompensated care nominal need for each hospital shall be calculated as the net adjusted uncompensated care need multiplied by the sum of: (i) 0.40, and (ii) the Medicaid inpatient utilization rate multiplied by 0.60. The Medicaid inpatient utilization rate shall be calculated based on discharge data reported in Exhibit 32 of the Institutional Cost Report from the cost reporting year two years prior to the distribution year and shall include fee-for-service and managed care discharges for acute and exempt services.

(c) For the 2013 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than two and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(d) For the 2014 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than five percent less than the average distributions such hospitals received pursuant to §2807-k and 2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(e) For the 2015 calendar year, payments shall be made as follows:

(1) One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be distributed as Medicaid disproportionate share hospital ("DSH") payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital's uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2) Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital's uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than seven and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3) Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(f)  For the 2016 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than ten percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)   Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than ten percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)   Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(g)  For the 2017 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than twelve and a half percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)  Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than twelve and a half percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)  Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision. 

(h)  For the 2018 calendar year, payments shall be made as follows:

(1)  One hundred thirty nine million four hundred thousand dollars ($139,400,000) shall be  distributed as Medicaid disproportionate share hospital (“DSH”) payments to major public general hospitals, including the hospitals operated by public benefit corporations, on the basis of each hospital’s uncompensated care nominal need, as determined in accordance with the provisions of subdivision (b) of this section, as a share of the aggregate uncompensated care nominal need for all major public general hospitals, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than fifteen percent less than the average distributions such hospitals received pursuant to §2807-k of the Public Health Law for the three year period January 1, 2010, through December 31, 2012.

(2)  Nine hundred ninety four million nine hundred thousand dollars ($994,900,000) shall be distributed as Medicaid DSH payments to eligible general hospitals, other than major public general hospitals, on the basis of each hospital’s uncompensated care need share, as determined in accordance with the provisions of subdivision (b) of this section, further adjusted by a transition factor that shall be calculated such that no hospital shall experience a reduction in payments pursuant to this section that is greater than fifteen percent less than the average distributions such hospitals received pursuant to §2807-k and §2807-w of the Public Health Law, excluding academic medical center grants received pursuant to §2807-k(5-b)(b)(v) of the Public Health Law, and after any reductions made pursuant to §2807-k(17) of the Public Health Law, for the three year period January 1, 2010, through December 31, 2012.

(3)  Payments made pursuant to paragraphs (1) and (2) of this subdivision shall be further adjusted such that such payments made to hospitals that experience increases in payments, as compared to the average of such payments made pursuant to this section for the three year period January 1, 2010 through December 31, 2012, shall be further adjusted on a percentage basis, as determined by the Commissioner, sufficient to ensure, in conjunction with such other funding as may be made available, the full funding of the transition adjustments described in paragraphs (1) and (2) of this subdivision.

(i)(1) Funds reserved in the Financial Assistance Compliance Pool ("FACP") pursuant to §2807-k(5-d)(b)(iv) of the Public Health Law for the calendar years 2014 through 2018 shall be distributed to hospitals which demonstrate substantial compliance, as determined by the Commissioner, with the provisions of §2807-k(9-a) of the Public Health Law (the "financial assistance law" or "FAL").

(2) Hospitals which are determined to be in substantial FAL compliance by the end of the 2013 calendar year shall receive their 2014 FACP payments as soon as practical in 2014 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2014 calendar year shall receive their 2015 FACP funds as soon as practical in 2015 in accordance with subdivision (b) of this section.  Hospitals which are determined to be in substantial FAL compliance by the end of the 2015 calendar year shall receive their 2016 FACP payments as soon as practical in 2016 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2016 calendar year shall receive their 2017 FACP payments as soon as practical in 2017 in accordance with subdivision (b) of this section. Hospitals which are determined to be in substantial FAL compliance by the end of the 2017 calendar year shall receive their 2018 FACP payments as soon as practical in 2018 in accordance with subdivision (b) of this section provided, however, that those hospitals which were determined to be not in such substantial compliance by the end of 2015 and 2016, but which are determined to be in such substantial compliance by the end of 2017, shall receive their 2015, 2016 and 2017 FACP payments as soon as practical in 2018.

Effective Date: 
Wednesday, October 11, 2017
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Section 2807-k (5-d)

Section 86-1.50 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.51 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.52 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.53 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.54 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.55 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.57 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.60 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.61 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.62 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.63 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.64 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.65 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.66 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.70 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.71 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.74 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.75 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.80 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.81 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.82 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.83 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.84 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.86 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.88 Repealed

Effective Date: 
Wednesday, March 16, 2011

Section 86-1.89 Repealed

Effective Date: 
Wednesday, March 16, 2011

SubPart 86-2 - Residential Health Care Facilities

Effective Date: 
Wednesday, January 3, 2018
Doc Status: 
Complete
Statutory Authority: 
Public Health Law, Sections 2803(2), 2807(3) 2808

Section 86-2.1 - Definitions

Section 86-2.1 Definitions. As used in this Subpart, the following definitions shall apply:

(a) Residential health care facility, medical facility or facility shall mean all facilities or organizations covered by the term nursing home as defined in article 28 of the Public Health Law, including hospital-based residential health care facilities, and nursing facilities as defined in section 1919 of the Federal Social Security Act, provided that such facility possesses a valid operating certificate issued by the State Commissioner of Health and, where required, has been established by the Public Health Council.

(b) Patient classification groups shall mean patient categories contained in the classification system, Resource Utilization Groups-II (RUG-II), which identifies the relative resource consumption required by different types of long-term care patients as specified in Appendix 13-A, infra.

(c) Case mix shall mean the patient population of a facility as classified and aggregated into patient classification groups.
 

Effective Date: 
Thursday, December 27, 1990
Doc Status: 
Complete

Section 86-2.2 - Financial and statistical data required

86-2.2 Financial and statistical data required.

(a) Each residential health care facility shall complete and file, with the New York State Department of Health and/or its agent, annual financial and statistical report forms supplied by the department and/or its agent. Residential health care facilities certified for title XVIII of the Federal Social Security Act (Medicare) shall use the same fiscal year for title XIX of the Federal Social Security Act (Medicaid) as is used for title XVIII. All residential health care facilities must report their operations from January 1, 1977, forward on a calendar-year basis.

(1) Hospital based residential health care facilities whose affiliation changes to free-standing pursuant to of section 86-2.34(a) of this Subpart shall complete and file the free-standing annual cost report (RHCF-4) supplied by the department and/or its agent for the first full calendar year following actual complete closure of the acute care beds of its affiliated hospital.

(b) Federal regulations require the submission of cost reports to the State agency no later than three months after the close of the cost reporting year. State agencies requiring certified reports may grant an extension of 30 days. Since the reports from all residential health care facilities are required to be certified, an extension of 30 days is automatically provided in this subdivision so that all required financial and statistical reports shall be submitted to the department no later than 120 days following the close of the fiscal period. Further extensions of time for filing reports may be granted upon application received prior to the due date of the report and only in those circumstances where the residential health care facility established, by documentary evidence, that the report cannot be filed by the due date for reasons beyond the control of the facility.

(c) In the event a residential health care facility fails to file the required financial and statistical reports on or before the due dates, or as the same may be extended pursuant to subdivision (b) of this section, the State Commissioner of Health shall reduce the current rate paid by state governmental agencies by two percent for a period beginning on the first day of the calendar month following the original due date of the required reports and continuing until the last day of the calendar month in which the required reports are filed.

(d) In the event that any information or data which a residential health care facility has submitted to the State Department of Health, on required reports, budgets or appeals for rate revisions intended for use in establishing rates, is inaccurate or incorrect, whether by reason of subsequent events or otherwise, such facility shall forthwith submit to the department a correction of such information or data which meets the same certification requirements as the document being corrected.

(e) Except as identified in sections 86-2.10(k)(6) and 86-2.15(e), a cost report shall be filed in accordance with this section by each new facility for the first twelve-month period during which the facility has had an overall average utilization of at least 90 percent of bed capacity. This report shall be filed and properly certified within 60 days following the end of the twelve-month period covered by the report. Failure to comply with this subdivision shall result in application of subdivision (c) of this section.

(f) If the financial and statistical reports required by this Subpart are determined by the department to be incomplete, inaccurate or incorrect, the residential health care facility will have 30 days from date of receipt of notification to provide the corrected or additional data. Failure to file the corrected or additional data within 30 days, or within such period as extended by the Commissioner, will result in application of subdivision (c) of this section. Lack of the respective certifications by both the operator and accountant, as required pursuant to sections 86-2.5 and 86-2.6 of this Subpart, shall render a financial and statistical report incomplete.

(g) Specific additional data related to the rate setting process may be requested by the State Commissioner of Health. These data, which include and are limited to those for use in a wage geographic differential survey, a peer grouping data survey, a medical supplies survey and a malpractice insurance survey, must be provided by the residential health care facility within 30 days from the date of receipt of notification to supply such information. The commissioner must supply to each facility prior to the start of each rate period, a preliminary listing of the data that will be required. Failure to submit the additional data shall result in application of subdivision (c) of this section, unless the residential health care facility can prove by documentary evidence that the data being requested is not available.

Effective Date: 
Tuesday, January 14, 1997
Doc Status: 
Complete

Section 86-2.3 - Uniform system of accounting and reporting

86-2.3 Uniform system of accounting and reporting.

(a) Residential health care facilities shall maintain their records in accordance with:

(1) section 414.13 of Article 3 of Subchapter A of Chapter V of this Title; and

(2) for the 1980 calendar year in substantial compliance, and thereafter in full compliance, with Article 9 of Subchapter A of Chapter V of this Title. Substantial compliance shall be defined as the result that would be expected from a good-faith effort taken by an informed, responsible person.

(b) For purposes of rate setting, the report required for the fiscal year beginning on or after January 1, 1980 by residential health care facilities shall be made in accordance with the policies and instructions as set forth in Article 9 of Subchapter A of Chapter V of this Title for financial presentation purposes.

(c) Failure of residential health care facility to file the reports required in accordance with this section will subject the residential health care facility to a rate reduction as set forth in the provisions of section 86-2.2(c) of this Subpart. However, there may be instances where a facility is not in compliance with Article 9 of Subchapter A of Chapter V of this Title, resulting in reports which are inaccurate, incomplete or incorrect, and the area of noncompliance cannot, for the reporting period, be corrected. In such instances a rate reduction shall begin on the first day of the calendar month following the original due date of the required report and continue until the last day of the calendar month in which the required reports are filed.
 

Effective Date: 
Thursday, February 25, 1993
Doc Status: 
Complete

Section 86-2.4 - Generally accepted accounting principles

86-2.4 Generally accepted accounting principles.

The completion of the financial and statistical report forms shall be in accordance with generally accepted accounting principles as applied to the residential health care facility unless the reporting instructions authorized specific variation in such principles.
 

Doc Status: 
Complete

Section 86-2.5 - Accountant's certification

86-2.5 Accountant's certification.

(a) The financial and statistical reports shall be certified by an independent licensed public accountant or an independent certified public accountant. The minimum standard for the term "independent" shall be the standard used by the State Board of Public Accountancy.

(b) Effective with report periods beginning on or after January 1, 1977, the requirements of subdivision (a) of this section shall apply to residential health care facilities operated by units of government of the State of New York heretofore exempt from the requirements of this section except that those medical facilities for which an annual reimbursement audit by a State agency is required by law shall be required to comply herewith effective with report periods beginning on or after January 1, 1978.
 

Doc Status: 
Complete

Section 86-2.6 - Certification by operator or officer

86-2.6 Certification by operator or officer.

(a) The financial and statistical reports shall be certified by the operator of a proprietary medical facility, an officer of a voluntary medical facility or the public official responsible for the operation of a public medical facility.

(b) The form of the certification required in subdivision (a) of this section shall be as prescribed in the annual fiscal and statistical report forms provided by the State Commissioner of Health.
 

Doc Status: 
Complete

Section 86-2.7 - Audits

86-2.7 Audits.

(a) All fiscal and statistical records and reports shall be subject to audit. All underlying books, records and documentation which formed the basis for the fiscal and statistical reports, filed by the residential health care facility with the department, shall be kept and maintained by the facility for a period of time not less than six years from the date of filing, or the date upon which the fiscal and statistical records were to be filed, whichever is the later date. In this respect, any rate of payment certified by the State Commissioner of Health based on the initial submission of base year data and reports will be construed to represent a provisional rate until such audit is performed and completed, at which time such rate or adjusted rate will be construed to represent the audited rate.
 

Effective Date: 
Tuesday, January 14, 1997
Doc Status: 
Complete

Section 86-2.8 - Patient days

86-2.8 Patient days.

(a) A patient day is the unit of measure denoting lodging provided and services rendered to one patient between the census-taking hour on two successive days.

(b) In computing patient days, the day of admission shall be counted but not the day of discharge. When a patient is admitted and discharged on the same day, this period shall be counted as one patient day.

(c) For reimbursement purposes residential health care facility days shall be determined by using the higher of the minimum utilization factor of 90 percent of certified beds or the actual patient days of care as furnished by the facility.

(d) Reserved bed patient days shall be computed separately from patient days. A reserved bed patient day is the unit of measure denoting an overnight stay away from the residential health care facility for which the patient, or patient's third-party payor, provides per diem reimbursement when the patient's absence is due to hospitalization or therapeutic leave.

(e) In computing reserved bed patient days, the day of discharge from the residential health care facility shall be counted, but not the day of readmission.
 

Doc Status: 
Complete

Section 86-2.9 - Adult day health care in residential health care facilities

86-2.9 Adult day health care in residential health care facilities.

(a) Except as specifically identified in subdivision (g), rates for residential health care facility services for adult day health care registrants shall be computed on the basis of the allowable costs, as reported by the residential health care facility, and the total number of visits by adult day health care registrants, as defined in Part 425 of this Title, for which services were delivered pursuant to Article 6 of Subchapter A of Chapter V of this Title subject to the maximum daily rate provided for in this section.

(b) For adult day health care programs without adequate cost experience, rates will be computed based upon annual budgeted allowable costs, as submitted by the residential health care facility and the total estimated annual number of visits by adult day health care registrants, as defined in Part 425 of this Title, for which services were delivered pursuant to Article 6 of Subchapter A of Chapter V of this Title subject to the maximum daily rate provided for in this section.

(c) Allowable costs shall include, but are not limited to, the following:

(1) applicable salary and nonsalary operating costs;

(2) cost of transportation; and

(3) appropriate portion of capital costs, allocated according to instructions accompanying the RHCF-4 report.

(d) The maximum daily rate, excluding the allowable costs of transportation, for services provided to a registrant in a 24-hour period as described in Part 425 of this Title shall be 75 percent of the sponsoring facility's former skilled nursing facility rate in effect on January 1, 1990, with the operating component trended forward to the rate year by the sponsoring facility's trend factor.

(e) Notwithstanding subdivision (d) of this section or any other regulations to the contrary, for the period July 1, 1992 to March 31, 1993 and annual periods beginning April 1, thereafter, the maximum daily rate, excluding the allowable costs of transportation, for services provided to a registrant in a 24-hour period as described in Part 425 of this Title shall be 65 percent of the sponsoring facility's former skilled nursing facility rate in effect on January 1, 1990 with the operating component trended forward to the rate year by the sponsoring facility's trend factor. The provisions of this subdivision shall be contingent upon extension of Section 1 of Chapter 41 of the Laws of 1992, or upon the enactment of permanent statutory authority.

(f) For facilities without a skilled nursing facility rate, computed in accordance with section 86-2.10 or section 86-2.15 of this Subpart, in effect on January 1, 1990, a weighted average rate for each region listed in Appendix 13A of this Title shall be used as the proxy for the facility's January 1, 1990 skilled nursing facility rate in determining the maximum daily rate for such facilities as set forth in subdivisions (d) and (e) of this section. The weighted average rate for each region shall be equal to the statewide weighted average 1990 skilled nursing facility rate with the statewide average direct component and indirect component of the rate adjusted respectively by the regional direct and indirect input price adjustment factors described in section 86-2.10. The statewide weighted average rate shall be computed by multiplying each residential health care facility's 1990 skilled nursing facility rate times its 1990 skilled nursing facility patient days, summing the result statewide, and dividing by the statewide total 1990 skilled nursing facility patient days. The 1990 rate used in computing the statewide weighted average rate shall be the latest 1990 rate in effect on July 1, 1992 for the former skilled nursing level of care which is contained in the rate which has been certified by the commissioner pursuant to section 2807(3) of the Public Health Law.

(g) Effective April 1, 1994 and thereafter, reimbursement for adult day health care services that are provided to registrants with acquired immune deficiency syndrome (AIDS) and other human immunodeficiency virus (HIV) related illnesses and, effective April 1, 2017, that are provided to registrants who are otherwise considered at the discretion of the commissioner to be part of a high-need population that, regardless of their HIV status, would benefit from receiving these adult day health care services shall be established pursuant to this subdivision. The services to be provided to such registrants shall be the same as those listed in Part 759 of this Title. Reimbursement to a residential health care facility shall be established as follows:

(1) The rate of payment shall consist of a single price per visit to include the operating component, transportation, and the capital cost component of the rate. Payment shall be based upon a per visit rate of $160 with not more than one reimbursable visit per 24-hour period per registrant.

(2) To be eligible to receive reimbursement pursuant to this section, a residential health care facility must be certified by the department pursuant to Part 710 of this Title to provide adult day health care services for AIDS/HIV registrants and, effective April 1, 2017, other high-need registrants.

(3) The price established pursuant to this section shall be full reimbursement for the following:

(i) physician services, nursing services, and other related professional expenses directly incurred by the licensed residential health care facility;

(ii) administrative personnel, business office, data processing, recordkeeping, housekeeping, food services, transportation, plant operation and maintenance and other related facility overhead expenses;

(iii) all other services described in Article 6 of this Title appropriate to the level of general medical care required by the patient; and

(iv) all medical supplies, immunizations and drugs directly related to the provisions of services except for those drugs used to treat AIDS patients for which fee-for-service reimbursement is available as determined by the Department of Social Services.

Effective Date: 
Wednesday, June 14, 2017
Doc Status: 
Complete

Section 86-2.10 - Computation of basic rate

86-2.10 Computation of basic rate. (a) Definitions. For purposes of this section, the following definitions shall apply:

(1) Direct price shall mean the monetary amount established for the direct component of the rate, based on the direct costs of all facilities after application of the regional direct input price adjustment factor, divided by patient days and the average statewide case mix index.

(2) Indirect price shall mean the monetary amount established for the indirect component of the rate, based on the indirect costs for each facility in a peer group, after application of a regional indirect price adjustment factor, divided by total peer group patient days.

(3) Peer group shall mean a set of facilities distinguished by like characteristics which are grouped for purposes of comparing costs and establishing payment rates using such criteria as affiliation (i.e., hospital-based or freestanding), case mix index (i.e., high intensity, case mix index greater than .83, or low intensity, case mix index less than or equal to .83), and size (i.e., less than 300 beds or 300 or more beds).

(4) Cost center shall mean categories into which related costs are grouped in accordance with and defined in Part 455 of this Title.

(5) Case mix index shall mean the numeric weighting of each patient classification group in terms of relative resource utilization as specified in Appendix 13-A, infra.

(6) Rate shall mean the aggregate governmental payment to facilities per patient day as defined in section 86-2.8 of this Subpart, for the care of Medicaid payments which include a direct, indirect, noncomparable and capital component.

(7) Operating portion of the rate shall mean the portion of the rate consisting of the direct, indirect and noncomparable components after application of the roll factor promulgated by the department.

(8) Roll factor shall mean the cumulative result of multiplying one year's trend (inflation) factor times one or more other years' trend factor(s) which is used to inflate costs from a base period to a rate period.

(9) Capital costs shall mean costs reported in the depreciation, leases and rentals, interest on capital debt and/or major movable equipment depreciation cost centers, as well as costs reported in any other cost center under the major natural classification of depreciation, leases and rentals on the facilities annual cost report (RHCF-4).

(10) Base shall mean, as applicable to cost or price, a minimum cost or price.

(11) Ceiling shall mean, as applicable to cost or price, a maximum cost or price.

(12) Corridor shall mean the difference between a base and a ceiling.

(13) Hospital-based shall mean as follows:

(i) For facilities receiving initial operating certificates prior to January 1, 1983, hospital-based shall mean those facilities that are considered by the Federal Health Care Financing Administration (HCFA) to be hospital-based or hospital-related (as pertaining to cost allocation) and which derive and report costs on the basis of a Medicare cost allocation methodology from an affiliated hospital.

(ii) For facilities receiving operating certificates after January 1, 1983, the commissioner shall review and determine whether or not such facilities are hospital-based utilizing the following criteria:

(a) the nature of any construction approval received pursuant to section 2802 of the Public Health Law;

(b) the nature of any establishment approval received pursuant to section 2801-a of the Public Health Law;

(c) the architectural configuration of the residential health care facility unit as related to the hospital physical plant;

(d) the method and amount of cost allocation;

(e) whether a determination that such a facility is hospital-based would result in the efficient and economic operation of such facility.

(b) (1) The rate for 1986 and subsequent rate years shall:

(i) be computed on the basis of allowable fiscal and statistical data submitted by the facility for the fiscal year ending December 31, 1983 as contained in parts I, II, III and IV of the facility's annual cost report (RHCF-4) and for hospital-based facilities, the annual cost report (RHCF-2) and the institutional cost report of its related hospital;

(ii) consist of the following four separate and distinct components, as defined in this section:

(a) direct;

(b) indirect;

(c) noncomparable; and

(d) capital.

(2) The operation portion of the rate for 1986 and subsequent rate years shall consist of the sum of the direct, indirect and noncomparable components of the rate determined in accordance with this section trended to the rate year by the applicable roll factor promulgated by the department.

(3) Allocation and adjustments of reported costs. (i) The computation of the rate for 1986 and for subsequent rate years shall incorporate the use of the single step-down method of cost allocation as defined in section 451.249 of this Title.

(ii) Individual discrete ceilings shall be applied to remuneration for the facility's administrator, assistant administrator and operator as specified in Appendix 13-A, infra.

(iii) Reported costs for 1983 shall be adjusted through the apportionment of retroactive adjustments due to operating appeals which were as a result of significant increases in staff specifically mandated by the commissioner. Such adjustments shall be limited to those related to staff hired subsequent to December 31, 1982 and those appeal requests received by the department prior to July 1, 1985.

(iv) In the determination of rates, reported costs shall be subject to the limitations and adjustments contained in sections 86-2.12, 86-2.17, 86-2.18, 86-2.25 and 86-2.26 of this Subpart.

(v) Salaries paid to related parties shall be subject to an initial maximum not to exceed $17,000. This limitation may be waived by the department pursuant to the provisions of section 86-2.14(a)(7) of this Subpart.

(c) Direct component of the rate. (1) Allowable costs for the direct component of the rate shall include costs reported in the following functional cost centers on the facility's annual cost report (RHCF-4) or extracted from a hospital-based facility's annual cost report (RHCF-2) and the institutional cost report of its related hospital, after first deducting for capital costs and allowable items not subject to trending.

(i) nursing administration;

(ii) activities;

(iii) social services;

(iv) transportation;

(v) physical therapy;

(vi) occupational therapy;

(vii) speech and hearing therapy-(speech therapy portion only)

(viii) pharmacy;

(ix) central service supply; and

(x) residential health care facility.

(2) For purposes of calculating the direct component of the rate, the department shall utilize the allowable direct costs reported by all facilities with the exception of specialty facilities as defined in subdivision (i) of this section.

(3) The statewide mean, base and ceiling direct price for patients in each patient classification group shall be determined as follows:

(i) Allowable costs for the direct cost centers for each facility after first deducting capital costs and items not subject to trending, shall be multiplied by the appropriate Regional Direct Input Price Adjustment Factor ("RDIPAF"), as determined pursuant to paragraph (5) of this subdivision. The RDIPAF neutralizes the difference in wage and fringe benefit costs between and among the regions caused by differences in the wage scale of each level of employee.

(ii) The statewide distribution of patients in each patient classification group shall be determined for 1986 payments utilizing the patient data obtained in the patient assessment period, March 1, 1985 through September 30, 1985, conducted pursuant to section 86-2.30 of this Subpart.

(iii) A statewide mean direct case mix neutral cost, a statewide base direct case mix neutral cost and a statewide ceiling direct case mix neutral cost shall be determined as follows:

(a) Allowable direct costs for each facility, after first deducting capital costs and items not subject to trending and adjusted by applying the RDIPAF shall be summed to determine total statewide direct costs.

(b) The aggregate statewide case mix index shall be determined by multiplying number of patients on a statewide basis in each patient classification group by the case mix index for each patient classification group and the results summed.

(c) A statewide mean direct cost per day shall be determined by dividing total statewide direct costs by the aggregate number of statewide 1983 patient days.

(d) A statewide mean direct case mix neutral cost per day shall be determined by dividing the statewide mean direct cost per day by the ratio of aggregate statewide case mix index to the number of patient review instruments received pursuant to section 86-2.30 of this Subpart.

(e) The statewide mean direct case mix neutral cost per day shall be the basis to establish a corridor between the statewide base direct case mix neutral cost per day and the statewide ceiling direct case mix neutral cost per day.

(f) The corridor shall be established by use of a base factor and a ceiling factor expressed as a percentage of the statewide mean direct case mix neutral cost per day.

(g) A statewide base direct case mix neutral cost per day shall be determined by multiplying the base factor times the statewide mean direct case mix neutral cost per day.

(h) A statewide ceiling direct case mix neutral cost per day shall be determined by multiplying the ceiling factor times the statewide mean direct case mix neutral cost per day.

(i) A statewide mean direct price per day for each patient classification group shall be determined by multiplying the statewide mean direct case mix neutral cost per day by the case mix index for each patient classification group, provided however that the index for reduced physical functioning A shall be .4414.

(j) A statewide base direct price per day for each patient classification group shall be determined by multiplying the statewide base direct case mix neutral cost per day by the case mix index for each patient classification group, provided however that the index for reduced physical functioning A shall be .4414.

(k) A statewide ceiling direct price per day for each patient classification group shall be determined by multiplying the statewide ceiling direct case mix neutral cost per day by the case mix index for each patient classification group, provided however that the index for reduced physical functioning A shall be .4414.

(l) The corridor referred to in clause (e) of this subparagraph shall be calculated as follows:

(1) The base factor referred to in clause (f) of this subparagraph shall be approximately 90 percent for the period January 1, 1986 through December 31, 1986. For the period January 1, 1987 through December 31, 1987, such factor shall be approximately 90 percent. For the period January 1, 1988 through June 30, 1989, such factor shall be increased to approximately 95 percent. For the period July 1, 1989 through March 31, 1990, such factor shall be reduced to approximately 88.25 percent. For the period April 1, 1990, and thereafter, such factor shall be increased to approximately 90 percent.

(2) The ceiling factor referred to in clause (f) of this subparagraph shall be approximately 115 percent for the period January 1, 1986 through December 31, 1986. For the period January 1, 1987 through December 31, 1987, such factor shall be reduced to approximately 110 percent. For the period January 1, 1988 through December 31, 1988, and thereafter, such factor shall be reduced to approximately 105 percent.

(3) For the period January 1, 1986 through December 31, 1986, the base factor and ceiling factor contained in the clause shall initially be determined to result in a 20-percent corridor. The ceiling factor shall then be increased by five percent. For the period January 1, 1987 through December 31, 1987, the application of the base factor and ceiling factor contained in this clause shall result in a 20-percent corridor. For the period January 1, 1988 through December 21, 1988, and thereafter, the base factor and ceiling factor contained in this clause shall result in a 10-percent corridor.

(4) The facility-specific direct adjusted payment price per day shall be determined as follows:

(i) The facility-specific mean direct price per day shall be determined by multiplying the statewide mean direct price per day for each patient classification group times the number of patients properly assessed and reported by the facility in each patient classification group pursuant to section 86-2.30 of this Subpart and dividing the sum of the results by the total number of patients properly assessed and reported by the facility pursuant to section 86-2.30 of this Subpart.

(ii) The facility-specific base direct price per day shall be determined by multiplying the statewide base direct per day for each patient classification group times the number of patients properly assessed and reported by the facility in each patient classification group pursuant to section 86-2.30 of this Subpart and dividing the sum of the results by the total number of patients properly assessed and reported by the facility pursuant to section 86-2.30 of this Subpart.

(iii) The facility-specific ceiling direct price per day shall be determined by multiplying the statewide ceiling direct price per day for each patient classification group times the number of patients properly assessed and reported by the facility in each patient classification group pursuant to section 86-2.30 of this Subpart and dividing the sum of the results by the total number of patients properly assessed and reported by the facility pursuant to section 86-2.30 of this Subpart.

(iv) The facility-specific cost based direct price per day shall be determined by dividing a facility's adjusted allowable reported direct costs after first deducting capital costs and items not subject to trending and, after application of the RDIPAF, by the facility's 1983 total patient days.

(v) Except as contained in subparagraph (vi) of this paragraph, the facility-specific direct adjusted payment price per day shall be determined by comparison of the facility-specific cost based price per day with the facility-specific base direct price per day and the facility-specific ceiling direct per day pursuant to the following table:

Facility-Specific Cost Based Facility-Specific Direct

Direct Price Per Day Adjusted Payment Price Per Day

Below Facility-Specific Base Facility-Specific Base

Direct Price Per Day Direct Price Per Day

Between Facility-Specific Base Facility-Specific Cost

Direct Price Per Day and Facility-Based Direct Price Per Day

Specific Ceiling Direct

Price Per Day

Above Facility-Specific Ceiling Facility-Specific Ceiling

Direct Price Per Day Direct Price Per Day

(vi) The facility-specific direct adjusted payment price per day shall be considered to be the facility-specific cost based direct price per day when such price is below the facility specific base direct price per day subject to the provisions of paragraph (6) of this subdivision for the following operators of residential health care facilities:

(a) an operator who has had an operating certificate revoked pursuant to section 2806(5) of the Public Health Law and is operating a residential health care facility pursuant to an order of the Commissioner of this department; and

(b) operator of a facility in which the Federal Health Care Financing Administration (HCFA) has imposed a ban on payment for all Medicare and Medicaid admissions after a specified date pursuant to section 1866(f) of the Federal Social Security Act until the lifting of the ban in writing by HCFA.

(vii) The direct component of a facility's rate shall be the facility-specific direct adjusted payment price per day determined in subparagraph (v) or (vi) of this paragraph as applicable after applying the RDIPAF.

(5) The RDIPAF shall be based on the following factors:

(i) Residential health care facilities shall be grouped, by county, into 16 regions within the State as outlined in Appendix 13-A, infra.

(ii) The facility's staffing, based on case mix predicted staffing for registered professional nurses, licensed practical nurses, and aides, orderlies and assistants for each facility. The case mix predicted staffing shall be adjusted annually on January 1st of each rate year based on the PRI's submitted by each facility for the fourth quarter of the preceding calendar year, in accordance with sections 86-2.11(b) and 86-2.30 of this Subpart. Until such PRIs are available, the case mix predicted staffing shall be based on the most current PRIs available prior to calculation of the initial rate effective January 1st of each rate year. The case mix predicted staffing shall subsequently be revised based on more recent PRI submissions until such time as the PRIs for the fourth quarter of the preceding calendar year are available.

(iii) The proportion of salaries and fringe benefit costs for the direct care cost centers indicated in subdivision (c) of this section to the total costs of such direct care cost centers.

(6) Case mix adjustment. A facility shall receive an increase or decrease in the direct component of its rate if the facility has increased or decreased its case mix from one assessment period to the next and, in accordance with subparagraph (4)(v) of this subdivision, would not have received any change in the direct component of its rate from that determined as of January 1, 1986 to the current calculation date. The increases or decreases in the direct component of the rate shall be determined as follows:

(i) The facility-specific mean price per day effective January 1, 1986 as determined in accordance with subparagraph (4)(i) of this subdivision shall be compared to the facility-specific mean price per day determined as a result of the submissions required in accordance with section 86-2.11(b) of this Subpart. Any increase or decrease determined as a result of such comparison, shall be expressed as a percentage, positive or negative, of the facility-specific mean price per day effective January 1, 1986.

(ii) This percentage shall be applied to the facility-specific cost based direct price per day determined as of January 1, 1986, and an adjustment factor shall be determined.

(iii) This adjustment factor shall be added to or subtracted from the facility-specific cost based direct price per day determined as of January 1, 1986, to arrive at an adjusted facility-specific cost based direct price per day which shall become for a facility their facility-specific adjusted payment price per day for the applicable rate period for which payment rates are adjusted pursuant to section 86-2.11 of this Subpart.

(d) Indirect component of the rate. (1) Allowable costs for the indirect component of the rate shall include costs reported in the following functional cost centers on the facility's annual cost report (RHCF-4) or extracted from a hospital based facility's annual cost report (RHCF-2) and the institutional cost report of its related hospital, after first deducting for capital costs and allowable items not subject to trending:

(i) fiscal services;

(ii) administrative services;

(iii) plant operations and maintenance (with the exception of utilities and real estate and occupancy taxes);

(iv) grounds;

(v) security;

(vi) laundry and linen

(vii) housekeeping;

(viii) patient food services;

(ix) cafeteria;

(x) non-physician education;

(xi) medical education;

(xii) housing; and

(xiii) medical records.

(2) For the purposes of establishing the allowable indirect component of the rate, facilities shall be combined into peer groups as follows:

(i) Size:

(a) less than 300 beds;

(b) 300 or more beds. (ii) Affiliation:

(a) free-standing;

(b) hospital-based.

(iii) Case mix index:

(a) high intensity, case mix index greater than .83;

(b) low intensity, case mix index less than or equal to .83.

(3) If any peer group contains fewer than five facilities, those facilities shall be included in a peer group of a similar type.

(4) For each of the peer groups, the indirect component of the rate shall be determined as follows:

(i) A mean indirect price per day shall be computed as follows:

(a) Reported allowable costs for the indirect cost centers for each facility in the peer group, after first deducting capital costs and allowable items not subject to trending shall be adjusted by applying the Regional Indirect Input Price Adjustment Factor (RIIPAF), as determined pursuant to paragraph (7) of this subdivision.

(b) The results of the calculation in clause (a) of this subparagraph shall be aggregated and divided by total 1983 patient days of all facilities in the peer group.

(ii) The mean indirect price per day shall be the basis to establish a corridor between the base indirect price per day and the ceiling indirect price per day. The corridor shall be established by use of a base factor and a ceiling factor expressed as a percentage of the mean indirect price per day.

(a) The base factor shall be approximately 90 percent for the period January 1, 1986 through December 31, 1986. For the period January 1, 1987 through December 31, 1987, such factor shall be increased to approximately 95 percent. For the period January 1, 1988 through June 30, 1989, such factor shall be increased to approximately 97.5 percent. For the period July 1. 1989 through March 31, 1990 such factor shall be reduced to approximately 90.75 percent. For the period April 1, 1990, and thereafter, such factor shall be increased to approximately 92.5 percent.

(b) The ceiling factor shall be approximately 110 percent for the period January 1, 1986 through December 31, 1986. For the period January 1, 1987 through December 31, 1987, and thereafter, such factor shall be reduced to approximately 105 percent.

(iii) For the period January 1, 1986 through December 31, 1986, the base factor and ceiling contained in subparagraph (ii) of this paragraph, shall result in a 20-percent corridor. For the period January 1, 1987 through December 31, 1987, the base factor and ceiling factor contained in subparagraph (ii) of this paragraph shall result in a 10-percent corridor. For the period January 1, 1988 through December 31, 1988, and thereafter, the base factor and ceiling factor contained in subparagraph (ii) of this paragraph shall initially be determined to result in a five-percent corridor. The ceiling factor shall then be increased by 2.5 percent.

(iv) The base indirect price per day shall be determined by multiplying the base factor times the mean indirect price per day.

(v) The ceiling indirect price per day shall be determined by multiplying the ceiling factor times the mean indirect price per day.

(vi) The facility specific indirect adjusted payment price per day shall be determined by comparison of a facility's adjusted reported indirect costs after determining capital costs and items not subject to trending and after application of the RIIPAF, divided by the facility's total 1983 patient days, with the base indirect price per day and the ceiling indirect price per day. Except as outlined in subparagraph (vii) of this paragraph, the facility specific indirect adjusted payment price per day shall be established as presented by the following table:

Facility Adjusted Costs Facility Specific Indirect Adjusted Payment

Divided by Patient Days Price Per Day

Below Base Indirect Price Per Day Base Indirect Price Per Day

Between Base Indirect Price Per Day Reported Adjusted and Ceiling Indirect Price Per Day Costs Per Day

Ceiling Indirect Price Per Above Ceiling Indirect Price Per Day Day

(vii) The facility specific indirect adjusted payment price per day shall be considered to be the facility specific cost based indirect price per day when such price is below the facility specific base indirect price per day for the following operators of residential health care facilities:

(a) an operator who has had an operating certificate revoked pursuant to section 2806(5) of the Public Health Law and is operating a residential health care facility pursuant to an order of the commissioner of the department; and

(b) an operator of a facility in which the Federal Health Care Financing Administration (HCFA) has imposed a ban on payment for all Medicare and Medicaid admissions after a specified date pursuant to section 1866(f) of the Federal Social Security Act until the lifting of the ban in writing by HCFA.

(5) For each rate year, a facility's indirect costs shall be compared to the peer groups identified in paragraph (2) of this subdivision as follows:

(i) A facility's peer group established pursuant to paragraphs (2)(i) and (ii) of this subdivision shall be based on that facility's affiliation status prior to the effective rate period, contingent upon the provisions of section 86-2.34 of this Subpart, and total certified bed capacity listed on the operating certificate.

(ii) Those facilities having 80% or more of all patients falling into patient classification groups with weights greater than .83 shall be compared to the peer group established pursuant to clause (a) of subparagraph (iii) of paragraph (2) of this subdivision.

(iii) Those facilities having 80% or more of all patients falling into patient classification groups with weights equal to or less than .83 shall be compared to the peer group established pursuant to clause (b) of subparagraph (iii) of paragraph (2) of this subdivision.

(iv) Those facilities who do not meet either of the above conditions identified in subparagraphs (ii) and (iii) of this paragraph, shall be compared to a blended peer group mean price per day. Such price shall be determined by blending the number of a facility's patients which have patient classification group weights above .83 at the high intensity peer group mean price and the number of a facility's patients at or below .83 at the low intensity peer group mean price as defined pursuant to paragraph (4) of this subdivision.

(v) The peer group mean price effective January 1st of each rate year shall be based on the PRIs submitted by each facility for the fourth quarter of the preceding calendar year in accordance with 86-2.11(b) and 86-2.30 of this Subpart. Until such PRIs are available, the peer group mean price shall be based on the most current PRIs available prior to calculation of the initial rate effective January 1st of each rate year. The peer group mean price shall subsequently be revised based on more recent PRI submissions until such time as the PRIs for the fourth quarter of the preceding calendar year are available.

(6) The indirect component of a facility's rate shall be the facility specific indirect adjusted payment price per day determined in accordance with subparagraphs (vi) and (vii), as applicable of paragraph (4) of this subdivision after application of the RIIPAF.

(7) The RIIPAF shall be based on the following factors:

(i) residential health care facilities shall be grouped by county, into 16 regions within the State as outlined in Appendix 13-A, infra.

(ii) the facility's staffing, based on case mix predicted staffing for registered professional nurses, licensed practical nurses, and aides, orderlies and assistants for each facility. The case mix predicted staffing shall be adjusted annually on January 1st of each rate year based on the PRI's submitted by each facility, for the fourth quarter of the preceding calendar year, in accordance with sections 86.2.11(b) and 86-2.30 of this Subpart. Until such PRIs are available, the case mix predicted staffing shall be based on the most current PRIs available prior to calculation of the initial rate effective January 1st of each rate year. The case mix predicted staffing shall subsequently be revised based on more recent PRI submissions until such time as the PRIs for the fourth quarter of the preceding calendar year are available; and

(iii) the proportion of salaries and fringe benefits costs for the indirect care cost centers indicated in paragraph 1 of this subdivision to the total costs of such indirect care cost centers.

(e) Gain or loss limitation for the direct and indirect component of the rate. Gain or losses resulting from using the regional direct or indirect input price adjustment factors rather than individual facility specific direct or indirect input price adjustment factors shall be determined as follows:

(1) A facility's allowable direct costs divided by the facility's 1983 total patient days shall be compared to the facility's direct component and a direct gain or loss per day calculated.

(2) A facility's allowable indirect costs divided by the facility's 1983 total patient days shall be compared to the facility's indirect component and an indirect gain or loss per day calculated.

(3) The facility's direct gain or loss per day and indirect gain or loss per day shall be summed to arrive at a facility's net composite gain or loss per day.

(4) If a facility's net composite gain or loss per day is greater than $3.50, for the rate year 1986, a limitation shall be applied for rate years 1986 through 1988 as follows:

(i) For 1986 rates, if a facility has a net composite gain, then a facility's direct or indirect cost per day shall be determined by utilizing the regional or the individual facility-specific input price adjustment factor, whichever factor, when applied would reduce the gain.

(ii) For 1986 rates, if a facility has a net composite loss, then a facility's direct or indirect cost per day shall be determined by utilizing the regional or the individual facililty specific input price adjustment factor, whichever factor, when applied, would reduce the loss.

(iii) If a facility's direct or indirect cost per day is determined, pursuant to subparagraph (i) or (ii) of this paragraph, by utilizing the regional input price adjustment factor, such factor shall be utilized in all subsequent rate years.

(iv) If a facility's direct or indirect cost per day is determined, pursuant to subparagraph (i) or (ii) of this paragraph, by utilizing the individual facility-specific input price adjustment factor, the following shall apply to subsequent rate years:

(a) For 1987 rates, a facility's direct or indirect costs per day shall be determined by using a composite of 50 percent of the regional and 50 percent of the facility specific input price adjustment factor.

(b) For 1988 rates, a facility's direct or indirect costs per day shall be determined by using a composite of 75 percent of the regional and 25 percent of the facility specific input price adjustment factor.

(c) For 1989 and subsequent rate years, a facility's direct costs per day shall be determined by using the regional input price adjustment factors.

(5) The limitations of this subdivision shall not be applicable to specialty facilities as defined in subdivision (i) of this section.

(f) Noncomparable component of the rate. (1) The noncomparable component of the rate shall consist of costs which represent allowable costs reported by a facility which because of their nature are not subject to peer group comparisons.

(2) Allowable costs for the noncomparable component of the rate shall include the costs associated with supervision of facility volunteers and costs reported in the following functional cost centers as reported on the facility's annual cost report (RHCF-4) or extracted from a hospital-based facility's annual cost report (RHCF-2) and the institutional cost report of its related hospital, after first deducting capital costs and allowable items not subject to trending:

(i) laboratory services;

(ii) ECG;

(iii) EEG;

(iv) radiology;

(v) inhalation therapy;

(vi) podiatry;

(vii) dental;

(viii) psychiatric;

(ix) speech and hearing therapy-(hearing therapy only);

(x) medical director office;

(xi) medical staff services;

(xii) utilization review;

(xiii) other ancillary; and

(xiv) plant operations and maintenance-(cost for utilities and real estate and occupancy taxes only).

(3) The allowable facility-specific noncomparable component of the rate shall be reimbursed at a payment rate equal to adjusted reported noncomparable costs, after first deducting capital costs and allowable items not subject to trending, divided by the facility's total 1983 patient days.

(g) Capital component of the rate. The allowable facility-specific capital component of the rate shall include allowable capital costs determined in accordance with sections 86-2.19, 86-2.20, 86-2.21 and 86-2.22 of this Subpart and costs of other allowable items determined by the department to be nontrendable divided by the facility's patient days in the base year determined applicable by the department.

(h) A facility's payment rate for 1986 and subsequent rate years shall be equal to the sum of the operating portion of the rate as defined in paragraph (b)(2) of this section and the capital component as defined in subdivision (g) of this section.

(i) Specialty facilities. Facilities which provide extensive nursing, medical, psychological and counseling support services to children with diverse and complex medical, emotional and social problems shall be considered specialty facilities and shall not be subject to the provisions of paragraphs (c)(3), (c)(4), (d)(4), (d)(5), and (d)(6) of this section. The direct component of such facilities' rates shall be calculated based on allowable 1983 direct costs as defined in paragraph (c)(1) of this section, divided by the facilities' total 1983 patient days. The indirect component of such facilities' rates shall be calculated based on allowable 1983 indirect costs as defined in paragraph (d)(1) of this section, divided by the facilities' total 1983 patient days.

(j) Rates for residential health care facility services for nonoccupants for 1986 and subsequent rate years shall be calculated in accordance with section 86-2.9 of this Subpart, with any operating component of the rate trended from the 1983 base year, the rate year by the applicable roll factor promulgated by the department.

(k) Receiverships and new operators. (1) The appointment of a receiver or the establishment of a new operator to an ongoing facility shall require such receiver or operator to file a cost report for the first twelve-month period of operation in accordance with section 86-2.2(e) of this Subpart. This report shall be filed and properly certified within 60 days following the end of the twelve-month period covered by the report. Failure to comply with this subdivision shall result in application of the provisions of section 86-2.2(c) of this Subpart.

(2) The initial rate for facilities covered under this subdivision shall be the higher of:

(i) the rate in effect on the date of the appointment of a receiver or the date of transfer of ownership as applicable; or

(ii) the rate in effect on the date of appointment of a receiver or the date of transfer of ownership as applicable with the direct and indirect component of such rate calculated as follows:

(a) The direct component of the rate shall be equivalent to the facility-specific mean direct price per day after application of the RDIPAF as determined in section 86-2.10(c) of this Subpart. The PRIs used in the computation of the facility-specific mean direct price per day shall be the PRIs used to calculate the rate in effect on the date of appointment of a receiver or the date of transfer of ownership.

(b) The indirect component of the rate shall be equivalent to the mean indirect price per day, determined using the PRIs used to calculate the rate in effect on the date of appointment of a receiver or date of transfer of ownership, and adjusted by the RIIPAF as determined in section 86-2.10(d) of this Subpart.

(3) The facility shall perform an assessment of all patients, pursuant to section 88-2.30 of this Subpart, at the beginning of the fourth month of operation. The direct component of the rate shall be adjusted pursuant to this Subpart effective the first day of the assessment period based on the facility's case mix.

(4) The twelve-month cost report referred to in paragraph (1) of this subdivision shall be used to adjust the direct, indirect, noncomparable and capital components of the rate effective on the first day of the twelve-month cost report period.

(5)(i) For purposes of this subdivision, and except as identified in paragraph (7) herein, the terms "new operator" and "receiver" shall not include any operator or receiver approved to operate a facility when:

(a) a stockholder, officer, director, sole proprietor or partner of such operator or receiver was also a stockholder, officer, director, sole proprietor or partner of the prior operator or receiver of such facility;

(b) the approved operator was the prior receiver of the facility;

(c) any prior corporate operator or receiver is a corporate member of the approved operator or receiver, is otherwise affiliated with the approved operator or receiver through direct or indirect sponsorship or control or when the approved operator or receiver and prior operator or receiver are subsidiaries of a common corporate parent; or

(d) a principal stockholder (owning 10 percent or more of the stock), officer, director, sole proprietor or partner of an approved proprietary operator or receiver is the spouse or child of a principal stockholder, officer, director, sole proprietor or partner of the prior operator or receiver of such facility, regardless of whether such relationship arises by reason of birth, marriage or adoption.

(ii) Rates of reimbursement for operators or receivers which are not considered new operators or receivers under this subdivision shall not be subject to adjustment under this subdivision.

(6) Notwithstanding the provisions of this subdivision, a receiver or new operator of a facility which has had an overall average utilization of at least 90 percent of bed capacity for a six-month period which began prior to April 1, 1993 but after the date on which the receiver was appointed or new operator became the operator shall submit a six-month cost report for that period. Such six-month cost report shall be utilized for the purpose of this subdivision in lieu of the twelve-month cost report identified in paragraph (1) of this subdivision.

(7)(i) Notwithstanding the provisions of this subdivision, when a receiver of a proprietary nursing facility is appointed or a new operator of a previously established proprietary nursing facility is established and a stockholder, sole proprietor, partner or limited liability company member of such receiver or new operator is the child of a stockholder, sole proprietor, partner or member of the limited liability company of the prior operator or receiver of the facility, such receiver or new operator shall receive rates of reimbursement adjusted pursuant to paragraphs (1)-(4) and (6) of this subdivision. For purposes of this paragraph, child shall mean a child or stepchild by birth, adoption, or marriage. Rates of reimbursement for any subsequent operator of such facility who is established within 10 years of the date of appointment or establishment of such child or stepchild shall not be subject to adjustment under this subdivision.

(ii) For purposes of this paragraph, the terms "new operator" and "receiver" shall not include any operator or receiver with a stockholder, sole proprietor, partner, or limited liability company member who was a stockholder, sole proprietor, partner or limited liability company member of the prior operator or receiver of such facility.

(iii) For purposes of this paragraph, "new operator" shall also mean an established operator which has undergone a total change in owners, stockholders, partners or limited liability company members.

(iv) This paragraph shall apply to appointments of receivers and/or the establishment of a new operator on or after the effective date of this paragraph.

(l) Adjustments to the operating component of the rate. (1) Notwithstanding any other provision of this section, the department shall make available the sum of $10 million for rate year 1986 and $5 million for rate year 1987, based on total system costs and total patient days, herein referred to as the transfer amount, to facilities in those rate years, whose reimbursement for the indirect component of their rates is less than their 1983 allowable costs for the indirect component of the rate, herein referred to as indirect losses.

(2) To determine eligibility for such adjustments, facilities shall also have suffered an aggregate loss. For purposes of this subdivision, an aggregate loss shall exist when a facility's composite reimbursement for the direct and indirect components of the rate is less than such a facility's composite 1983 allowable costs for the direct and indirect components.

(3) The transfer amount referred to in paragraph (1) of this subdivision shall be made available by reductions in the operating components of facilities' rates whose composite reimbursement for the direct and indirect components of their rates is more than their composite 1983 allowable costs for the direct and indirect components herein referred to as aggregate gains.

(4) The transfer amounts referred to in paragraph (1) of this subdivision shall be distributed, for the applicable rate years, to eligible facilities by a per diem adjustment in the operating component of their rates in accordance with the following procedure:

(i) The indirect losses of all eligible facilities shall be summed to arrive at total indirect losses.

(ii) The proportion of a facility's indirect loss to total indirect losses shall be expressed as a percentage, herein referred to as a sharing percentage.

(iii) The sharing percentage for an eligible facility shall be multiplied by the transfer amount to arrive at a facility's share of the transfer amount.

(iv) A facility's share of the transfer amount shall be divided by 1983 patient days to arrive at a per diem adjustment to the operating component of a facility's rate.

(5) The transfer amounts referred to in paragraph (1) of this subdivision shall be accumulated from facilities referred to in paragraph (3) of this subdivision by a per diem adjustment to the operating component of their rates in accordance with the following procedure:

(i) The aggregate gains of a facility shall be expressed as a percentage of their composite 1983 allowable costs for the direct and indirect components. Such percentage shall be herein referred to as percentage gain.

(ii) The percentage gain for all facilities shall be ranked from highest to lowest.

(iii) A methodology shall be employed where, beginning with a set percentage, percentage gains in excess of such set percentage shall be noted, arrayed by facility and herein referred to as excess percentage gain.

(iv) The excess percentage gain shall be multiplied by each facility's allowable composite 1983 costs for the direct and indirect components and such total for all faculties accumulated as a funded amount. The excess percentage gain shall also then be subtracted from a facility's percentage gain and the net percentage gain utilized as a facility's percentage gain for subsequent calculations.

(v) Such process shall continue, decreasing the set percentage used as a standard against which percentage gains of facilities is compared and the funded amounts accumulated until the transfer amounts referred to in paragraph (1) of this subdivision are realized.

(vi) If in this process, moving to the next set percentage used as a standard against which percentage gains of facilities is compared shall result in a total transfer amount in excess of the transfer amounts referred to in paragraph (1) of this subdivision, the following procedure shall be utilized to determine the amounts necessary to be funded by each facility in the final step of this process to attain the transfer amounts referred to in paragraph (1) of this subdivision:

(a) A facility's percentage gain shall be compared to the next lower set percentage that would be utilized as a standard and an excess percentage gain determined.

(b) The excess percentage gain for a facility, at that time, shall be multiplied by the facility's allowable composite 1983 costs for the direct and indirect components and the result herein referred to as an interim funded amount.

(c) The interim funded amount for each facility, expressed as a percentage of the aggregate of the interim funded amounts for all facilities shall be multiplied by the remaining amount to be funded for a given rate year to arrive at a facility's portion of the final amount to be funded.

(vii) The funded amounts for a facility arrived at as a result of this paragraph shall be summed, divided by total 1983 patient days and deducted as a per diem adjustment from a facility's operating per diem in the appropriate rate year.

(m) Computation of regional input price adjustment factors applied for purposes other than determining, pursuant to this section, the statewide direct and peer group indirect prices.

(1) The regional direct input price adjustment factor (RDIPAF) as contained in subparagraphs (c)(4)(iv) and (vii) of this section, the regional indirect input price adjustment factor (RIIPAF), as contained in subparagraph (d)(4)(vi) and paragraph (d)(5) of this section and the regional input price adjustment factor as contained in subparagraph (iv) of paragraph (4) of subdivision (e) of this section, hereinafter referred to as factors shall, for rate years beginning on or after January 1, 1987, be based on the regional dollar per hour (RAP) calculated using the financial and statistical data required by section 86-2.2 of this Subpart, reported solely for 1983 calendar year operations, adjusted as follows:

(i) RAPs shall be adjusted for the variation in wage and fringe benefit costs for each region relative to such variation for all other regions through the use of a variable corridor.

(ii) The measurement of the region's variation shall be accomplished by means of the statistical measure of variation, the coefficient of variation, in wage and fringe benefit costs.

(iii) The region with the smallest variation shall receive no corridor. The region with the highest variation shall receive a corridor no greater than a maximum percentage such that the average corridor for all regions in the State shall be approximately plus or minus 10 percent.

(iv) For rate years beginning on or after January 1, 1991, for those regions of the state described in Appendix 13-A, infra, whose Regional Average Dollar Per Hour (RAP), calculated using the financial and statistical data required by section 86-2.2 of this Subpart reported solely for 1987 calendar year operations (1987 RAP) expressed as a percentage of the Statewide RAP for such year is greater than the percentage calculated using the same data reported for 1983 calendar year operations, (1983 RAP), the factors shall be determined utilizing 1987 RAPs and adjusted pursuant to subparagraphs (i), (ii) and (iii) of this paragraph.

(a) Notwithstanding this subparagraph if the utilization of 1987 RAPs to determine the factors would, for any facility within a region described in this sub paragraph, result in less reimbursement than the continued utilization of the 1983 RAPs to determine the factors, the factors utilized for such facility shall continue to be based on 1983 calendar year data.

(n) Long-term inpatient rehabilitation program for traumatic brain-injured residents (TBI). Facilities which have been approved to operate discrete units for the care of residents under the long-term inpatient rehabilitation program for head-injured patients (TBI) patients established pursuant to section 415.36 of this Title shall have separate and distinct payment rates for such units calculated pursuant to this section except as follows:

(1) In determining the facility-specific direct adjusted payment price per day pursuant to paragraph (c)(4) of this section for patients meeting the criteria for and residing in a TBI unit, the case mix index used to establish the statewide ceiling direct price per day for each patient classification group pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of this section for such residents shall be increased by an increment of 1.49. In determining the case mix adjustment pursuant to paragraph (6) of subdivision (c) of this section, the case mix index used to calculate the facility specific mean price for each patient classification group shall be increased by an increment of 1.49.

(i) The increment established in paragraph (1) of this subdivision shall be audited and such increment shall be retrospectively or prospectively reduced on a proportional basis if the commissioner determines that the actual staffing reported in the facility's cost report submitted pursuant to this Subpart is less than the staffing pattern required by section 415.36 of this Title.

(2) In determining the indirect component of a facility's rate pursuant to paragraphs (4), (5) and (6) of subdivision (d) of this section for residents meeting the criteria for and residing in a TBI unit, a facility's indirect costs shall be compared to the peer group established pursuant to clause (a) of subparagraph (iii) of paragraph (2) of subdivision (d) of this section.

(3) The noncomparable component of such facilities' rates shall be determined pursuant to subdivision (f) of this section utilizing the cost report filed pursuant to section 86-2.2(e) of this Subpart including approved actual costs in such cost report for personnel required by section 415.36 of this Title that would be reported in the functional cost centers identified in subdivision (f) of this section.

(o)(1) A per diem amount of $4.00 (subject to adjustment pursuant to the provisions of paragraph (2) of this subdivision) increased to the rate year by the projection factors determined pursuant to section 86-2.12 of this Subpart, adjusted by the RDIPAF determined pursuant to paragraph (5) of subdivision (c) of this section, shall be added to each facility's payment rate for each patient whose primary medical problem, as reported in section V.29 of the patient review form (PRI) as contained in subdivision (i) of section 86-2.30 of this Subpart, is dementia, as defined in paragraph (4) of this subdivision, and who is properly assessed and reported by the facility in one of the following patient categories as listed in Appendix 13-A of this Title:

Clinically Complex A

Behavioral A

Reduced Physical Functioning A

Reduced Physical Functioning B

(2) Based on the most current 1986 PRI's filed with the Department, the number of eligible dementia patient days for Medicaid patients admitted prior to December 31, 1987, is estimated to be 1,750,000. Aggregate changes in such number in excess of 5% shall be deemed to be attributable to factors other than changes in patient condition and shall result in the recalculation and proportionate, prospective reduction of the per diem amount referred to in paragraph (1) of this subdivision.

(3) Facilities to whom the additional amount is paid shall demonstrate and document positive outcomes from implementation or continuation of programs and/or operations and promulgation of policies designed to improve the care of eligible dementia patients. The additional amount shall be recouped from facilities in which such positive outcomes are not demonstrated.

(4) The per diem amount referred to in paragraph (1) of this subdivision shall be paid for any patients with the following dementia diagnoses. The dementia diagnoses and related codes and descriptions are taken from the International Classification of Diseases, 9th Revision, Clinical Modification, volume 3 (ICD-9-CM).

ICD-9-CM Code ICD-9-CM Diagnosis

290.0 Senile dementia

Uncomplicated senile dementia

NOS, simple type excludes memory disturbance

290.1 Presenile dementia

Brain syndrome with presenile brain disease

Dementia in:

Alzheimer's disease

Creutzfeldt-Jakob disease

Pick's disease of the brain

290.10 Presenile dementia

Uncomplicated presenile dementia

NOS, simple type

290.11 Presenile dementia with delirium

Presenile dementia with acute confusional state

290.12 Presenile dementia with delusional feature

290.13 Presenile dementia with depressive features

290.2 Senile dementia with delusional or depressive features

290.21 Senile dementia with depressive features

290.4 Multi-infarct dementia

290.40 Arteriosclerotic dementia

290.41 Arteriosclerotic dementia

290.42 Arteriosclerotic dementia

290.43 Arteriosclerotic dementia

294.0 Wernicke-Korsakoff syndrome (nonalcoholic)

293.81 Organic brain syndrome

294.8 Other specified organic brain syndrome

294.9 Unspecified organic brain syndrome

310.1 Organic personality syndrome

310.8 Other specified nonpsychotic mental disorders, following organic brain damage

310.9 Unspecified nonpsychotic mental disorders following organic brain damage

331.0 Alzheimer's disease

331.1 Pick's disease

331.2 Senile degeneration of the brain

331.3 Communicating hydrocephalus

331.7 Cerebral degeneration in diseases classified elsewhere

331.8 Other cerebral degeneration

331.9 Cerebral degeneration, unspecified

331.89 Cerebral degeneration, NEC

333.4 Huntington's Chorea

437.0 Cerebral atherosclerosis

(p) Acquired Immune Deficiency Syndrome (AIDS). (1) For rate year 1988 and thereafter, payment rates shall be adjusted, pursuant to this subdivision to provide additional payments to facilities for patients residing in a residential health care facility designated as an AIDS facility or having a discrete AIDS unit approved by the commissioner pursuant to Part 710 of this Title, or a facility which has received approval by the commissioner pursuant to Part 710 of this Title to provide services to a patient whose medical condition is HIV Infection Symptomatic. Such patients shall hereinafter be referred to as AIDS patients.

(2) Separate and distinct payment rates shall be calculated pursuant to this paragraph for AIDS facilities or discrete AIDS units approved by the commissioner pursuant to Part 710 of this Title.

(i) The facility specific direct adjustd price per day shall be determined pursuant to paragraphs (3) and (4) of subdivision (c) of this section and further adjusted as follows:

(a) In determining the direct component of a facility's rate pursuant to paragraphs (3) and (4) of subdivision (c) of this section for providing care for an AIDS patient in a residential health care facility designated as an AIDS facility or having a discrete AIDS unit, the case mix index for the AIDS patient shall be increased by an increment which shall be determined on the basis of the difference between allowable actual direct staffing levels and cost expenditures for the care of AIDS patients in specific patient classification groups and those of non-AIDS patients which are classified in the same patient classification groups based on data submitted by the facility. The increment to be included in a facility's rate shall be approved by the commissioner, but in no event shall the increment exceed 1.0. The facility's direct ceiling price shall be further increased by an occupancy factor of 1.089. (b) For purposes of this paragraph, the allowable costs for the central service supply functional cost center as listed in paragraph (1) of subdivision (c) of this section shall be considered a non-comparable cost.

(ii) Except as identified in subparagraph (iii) of this paragraph, in determining the indirect component of a facility's rate pursuant to paragraphs (4), (5) and (6) of subdivision (d) of this section for providing care for an AIDS patient in a residential health care facility designated as an AIDS facility or having a discrete AIDS unit, the peer group ceiling indirect price shall be increased by a factor of 1.20.

(iii) In determining the indirect component of a facility's rate pursuant to paragraphs (4) and (5) of subdivision (d) of this section for a facility with a total bed complement of less than 40 beds all of which are approved by the commissioner pursuant to Part 710 of this Title solely for the care and management of AIDS patients, the peer group ceiling indirect price shall be increased by a factor of 2.00 for those facilities that are less than or equal to 16 beds and such factor shall be decreased by 0.033 for every additional bed thereafter.

(3) For facilities which have received approval by the commissioner pursuant to Part 710 of this Title to provide services to a patient whose medical condition is HIV Infection Symptomatic, and the facility is not eligible for separate and distinct payment rates pursuant to paragraph (2) of this subdivision, the patient classification group case mix index for AIDS patients which is used to establish direct cost reimbursement shall be increased by an increment of 1.0.

(q) Long-term ventilator dependent residents. Facilities which have been approved to operate discrete units for the care of long term ventilator dependent patients as established pursuant to section 415.38 of this Title shall have separate and distinct payment rates for such units calculated pursuant to this section except as follows:

(1) The facility specific direct adjusted price per day shall be determined as follows:

(i) In determining the facility specific direct adjusted payment price per day pursuant to paragraph (4) of subdivision (c) of this section for patients meeting the criteria established in section 415.38 of this Title and residing in a discrete unit for the care of long-term ventilator dependent patients, the case mix index used to establish the statewide ceiling direct price per day for each patient classification group pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of this section for such residents shall be increased by an increment of 1.15. In determining the case mix adjustment pursuant to paragraph (6) of subdivision (c) of this section, the case mix index used to calculate the facility specific mean price for each patient classification group shall be increased by an increment of 1.15.

(ii) The increment established in subparagraph (a) of paragraph (1) of this subdivision shall be audited and such increment shall be retrospectively or prospectively reduced on a proportional basis if the commissioner determines that the actual staffing reported in the facility's cost report submitted pursuant to this Subpart is less than the staffing pattern required by section 415.38 of this Title.

(iii) The allowable costs for the central service supply functional cost center as listed in paragraph (1) of subdivision (c) of this section shall be considered a noncomparable cost reimbursed pursuant to subdivision (f) of this section.

(iv) The allowable costs for prescription drugs, specifically required by generally accepted standards of professional practice for long-term ventilator dependent residents, that are administered at a frequency and volume exceeding those of prescription drugs included in the direct component of the rate pursuant to subdivision (c) of this section shall be considered a noncomparable cost pursuant to subdivision (f) of this section.

(2) In determining the indirect component of a facility's rate pursuant to paragraphs (4), (5) and (6) of subdivision (d) of this section for residents meeting the criteria established in section 415.38 of this Title and residing in a discrete unit for the care of long-term ventilator dependent residents, a facility's indirect costs shall be compared to the peer group established pursuant to clause (a) of subparagraph (iii) of paragraph (2) of subdivision (d) of this section.

(3) The non-comparable component of such facilities' rates shall be determined pursuant to subdivision (f) of this section utilizing the cost report filed pursuant to section 86-2.2(e) of this Subpart including approved actual costs in such cost report for personnel required by section 415.38 of this Title that would be reported in the functional cost centers identified in subdivision (f) of this section.

(r) Nursing salary adjustment. (1) The adjustment to the operating portion of the rate to reflect the costs of retaining and recruiting nursing services shall be made as follows:

(i) A percentage figure shall be determined as follows:

(a) An average annual statewide increase in registered nurses and licensed practical nurses salaries between the calendar year ending 1987 and calendar year ending 1988 shall be determined based on certain representative ratified nursing contracts for general hospital services and an average annual regional increase in registered nurses and licensed practical nurses salaries between the calendar year ending 1987 and calendar year ending 1988 shall be determined based upon certain representative wage and salary information for residential health care facilities.

(b) The average annual regional and statewide increase in salaries shall be multiplied by the total number of nursing staff in the region and the total number of nursing staff statewide respectively to arrive at the total regional and statewide adjustment to be made to facilities. The total regional adjustments shall be determined using the regions contained in Appendix 13-A herein.

(c) An adjusted base shall be determined by multiplying the facility specific mean price per day determined pursuant to subparagraph (i) of paragraph (4) of subdivision (c) of this section by total patient days for each facility and the result shall be summed on a regional and statewide basis.

(d) The total adjustment to be made for all facilities determined pursuant to clause (b) of this subparagraph shall be divided by the adjusted base determined pursuant to clause (c) of this subparagraph on a regional and statewide basis to determine the regional percentage increase and the statewide percentage increase.

(e) The facility specific percentage shall be determined by summing 40 percent of the statewide percentage and 60 percent of the corresponding regional percentage determined pursuant to clause (d) of this subparagraph.

(ii) The adjustment to the rate for a facility shall be determined by applying the facility specific percentage figure calculated in subparagraph (i) of this paragraph to a facility's adjusted base. This amount shall be added to the operating portion of the rate.

(s) Adjustment of rates pursuant to methodology changes effective October 1, 1990 and April 1, 1991.

(1) Rate changes resulting from the amendments to sections 86-2.1(a), 86-2.9(c), 86-2.10(a)(3), (c)(1)-(5), (d)(1) and (2) and (p)(2) and (3) and 86-2.30(c)(3) of this Title effective October 1, 1990., and amendments to sections 86-2.10(a)(3), (c)(1), (3) and (5), (d)(1), (2) and (4)-(7), (p)(1)-(3), and (t)(1) and (2) of this Title effective April 1, 1991 shall be transitioned into the rates as follows:

(i) For rates with effective dates commencing between October 1, 1990 and June 30, 1992, the rate shall be computed using the rate methodology in effect on September 30, 1990, adjusted by the most recent PRI submissions applicable to the effective period of the rate, and the adjustment to the regional direct and indirect input price adjustment factors pursuant to subparagraph (iv) of paragraph (1) of subdivision (m) of this section.

(ii) For rates with effective dates commencing on or after July 1, 1992, the full impact of the rate changes cited in paragraph (1) of this subdivision shall be reflected in rates.

(iii) Those facilities with an initial budgeted rate or revised cost-based rate which reflects a change in base year and which is effective after April 1, 1991, shall receive the full impact of the methodology changes cited in paragraph (1) of this subdivision on the effective date of such rate.

(2) For facilities having multiple rates based on levels of care prior to October 1, 1990, such rates shall be combined for the establishment of rates effective October 1, 1990 to June 30, 1992 based on a weighted average of reported Medicaid days for each previous level of care for the latest available cost reporting period. Where the Department is authorized expressly by statute to adjust rates retrospectively, for both positive and negative rate adjustments, such combined rate shall be adjusted by a reconciliation of reported Medicaid days to actual billed Medicaid days for the effective period, provided that such adjustment results in a combined direct and indirect component rate change of more than 5%. Such combined rate shall reflect the amendments referenced in paragraph (1) of this subdivision pursuant to the schedule set forth therein.

(t) Base Year Adjustment for Facilities Who Have Bed Conversions. A facility shall be eligible for an adjustment to its base year costs if its proportion of beds identified as skilled nursing facility beds and health related facility beds as of the first day of its base period differs from the proportion of beds identified as skilled nursing facility beds and health related facility beds as of September 30, 1990. The adjustment shall be separately determined for the direct, indirect, and non-comparable components of a facility's allowable base period costs, and each adjustment shall be added to a facility's allowable direct, indirect and non-comparable costs, respectively, prior to group comparisons. The amount of the adjustment shall be determined as follows:

(1) Base period direct, indirect, and non-comparable costs per bed adjusted for occupancy level shall be separately calculated for both skilled nursing and health related facility beds. The changes in skilled nursing and health related facility beds for the period defined in the above paragraph shall be multiplied by the applicable cost per bed and added together to arrive at each adjustment amount.

(2) An adjustment to allowable days shall also be made for a facility whose total number of beds has changed for the period described in this subdivision to reflect the skilled nursing facility and health related facility occupancy levels used in the calculation of rates effective September 30, 1990. Base period days shall be adjusted by the proportion of total new beds as of September 30, 1990 to total base year beds prior to the determination of the facility-specific price per day for the facility's direct, indirect, and non-comparable cost components.

(u) Adjustment for Additional Federal Requirements. A facility whose rate is based on allowable or budgeted costs for a period prior to April 1, 1991 shall be considered eligible to receive a per diem adjustment to its rate as follows:

(1) A per diem adjustment shall be incorporated into each facility's rate to take into account the additional reasonable costs incurred by facilities in complying with the requirements of subsection (b), (other than paragraph 3(F) thereof), (c), and (d) of section 1919 of the federal Social Security Act effective October 1, 1990 as added by the federal Omnibus Budget Reconciliation Act of 1987 (OBRA 1987). Additional reasonable costs resulting from such federal requirements shall include additional reasonable costs in the following areas: the completion of resident assessments, the development and review of comprehensive care plans for residents, staff training for the new resident assessment tool, quality assurance committee costs, nurse aid registry costs, psychotropic drug reviews, and surety bond requirements.

(i) The per diem adjustment shall be forty-five cents computed on a statewide basis and shall be regionally adjusted to reflect differences in registered nurse salary levels for calendar year 1987. Any costs over the per diem adjustment shall be deemed attributable to factors other than compliance with the federal requirements referenced in this subdivision.

(ii) For purposes of inclusion in facility rates for 1991, the annual incremental per diem add-on shall be effective for the nine month period beginning April 1, 1991 and further adjusted so that the nine months of incremental cost are reflected in a per diem adjustment for July 1, 1991 through December 31, 1991 rates.

(2) For rates years beginning on or after January 1, 1992, the annual incremental per diem add-on calculated pursuant to subparagraph (i) of paragraph (1) shall be trended forward by the applicable facility trend factor.

(v) Extended care of residents with traumatic brain injury. (1)(i) Except as provided in subparagraph (ii) of this paragraph, effective April 1, 1993, a per diem amount of $25, adjusted by the RDIPAF determined pursuant to paragraph (5) of subdivision (c) of this section, and increased in rate years thereafter, by the projection factors determined pursuant to section 86-2.12 shall be added to a facility's payment rate determined pursuant to this Subpart for each resident with traumatic brain injury identified as requiring extended care and receiving services pursuant to section 415.40 of this Title.

(ii) Effective with rates revised based upon patient review instrument (PRI) assessment data for an assessment period set forth in section 86-2.11(b) of this Subpart beginning on or after November 1, 1994, a TBI patient per diem amount shall be added to a facility's average Medicaid payment rate determined pursuant to this Subpart only for Medicaid residents with traumatic brain injury identified as requiring extended care and receiving services pursuant to section 415.40 of this Title. The TBI patient per diem amount shall be determined as follows: The total number of Medicaid traumatic brain injury (TBI) extended care residents shall be multiplied by $25 per patient day times 365 days to determine the annual TBI amount. The annual TBI amount shall then be adjusted by the facility RDIPAF, determined pursuant to subdivision (c)(5) of this section, to establish the allowable TBI dollars. The allowable TBI dollars shall be divided by the facility total annual Medicaid days to determine the facility TBI patient per diem amount. The TBI patient per diem amount shall be increased annually by the projection factor determined pursuant to section 86-2.12 of this Subpart. For purposes of this subdivision, a Medicaid resident is defined as a resident whose primary payor description is coded as Medicaid on the PRI assessment data.

(2) Residents reimbursed pursuant to this subdivision shall not be reimbursed pursuant to subdivision (n) and (o) of this section.

(w) Specialized programs for residents requiring behavioral interventions. Facilities which have been approved to operate discrete units specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions as established pursuant to section 415.39 of this Title shall have separate and distinct payment rates calculated pursuant to this section except as follows:

(1) In determining the facility specific direct adjusted payment price per day pursuant to paragraph (4) of subdivision (c) of this section for residents meeting the criteria established in section 415.39 of this Title and residing in a discrete unit specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions, the case mix index used to establish the statewide ceiling price per day for each patient classification group pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of this section for such residents shall be increased by an increment of 1.40. In determining the case mix adjustment pursuant to paragraph (6) of subdivision (c) of this section, the case mix index used to calculate the facility specific mean price for each patient classification group shall be increased by an increment of 1.40.

(i) The increment established in paragraph (1) of this subdivision shall be audited and such increment shall be retrospectively or prospectively reduced on a proportional basis if the commissioner determines that the actual staffing reported in the facility's cost report submitted pursuant to this Subpart is less than the staffing pattern required by section 415.39 of this Title.

(2) In determining the indirect component of a facility's rate pursuant to paragraphs (4), (5) and (6) of subdivision (d) of this section for residents meeting the criteria established in section 415.39 of this Title and residing in a discrete unit specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions, a facility's indirect costs shall be compared to the peer group established pursuant to clause (a) of subparagraph (iii) of paragraph (2) of subdivision (d) of this section.

(3) The noncomparable component of such facilities' rates shall be determined pursuant to subdivision (f) of this section utilizing the cost report filed pursuant to section 86-2.2(e) of this Subpart including approved actual costs in such cost report for personnel required by section 415.39 of this Title that would be reported in the functional cost centers identified in subdivision (f) of this section.

(x) Specialized programs for residents with neurodegenerative disease providing care to patients diagnosed with Huntington’s disease and amyotrophic lateral sclerosis. Facilities which have been approved to operate discrete units specifically designated for the purpose of providing care to residents with Huntington’s disease and amyotrophic lateral sclerosis, as established pursuant to section 415.41 of this Title, shall have separate and distinct payment rates calculated pursuant to this section.  The noncomparable component of such facilities’ rates shall be determined pursuant to this section utilizing the cost report filed pursuant to section 86-2.2(e) of this Subpart.

Effective Date: 
Wednesday, November 2, 2016
Doc Status: 
Complete
Statutory Authority: 
PHL Secs 2803(2), 2807(3) and 2808

Section 86-2.11 - Adjustments to direct component of the rate

86-2.11 Adjustments to direct component of the rate.

(a) Payments for 1986 and subsequent rate years for the direct component of the rate as defined in section 86-2.10(c) of this Subpart shall be adjusted periodically as described in this section to reflect changes in the case mix of facilities.

(b) Facilities shall report to the department changes in patient case mix as follows:

(1) Full reassessments. Facilities shall, on a schedule to be established by the department, assess all their patients semiannually and submit patient review instruments pursuant to section 86-2.30 of this Subpart. The department shall consider, in developing such schedule, that for each of the six months in a semiannual period, there would be submitted approximately 1/6 of the assessments for all patients in the State.

(2) Assessment of patients admitted since the last assessment period. Three months from the date facilities are scheduled to perform full reassessments, facilities shall assess patients admitted and still residing in the facility since the last full assessment period. Patient review instruments for such patients shall be submitted pursuant to section 86-2.30 of this Subpart on a schedule to be established by the department. The department shall consider, in developing such schedule that for each of the six months in a semiannual period, there would be submitted approximately 1/6 of the assessments of such new admissions.

(3) Notification to department of patients discharged since last assessment period. Facilities shall notify the department of any patients assessed during the previous full reassessment period as described in paragraph (1) of this subdivision and since discharged concurrent with the submission required by paragraph (2) of this subdivision for patients admitted since the last assessment period.

(c) Payment rates for the direct component of the rate as defined in section 86-2.10(c) of this Subpart shall be adjusted, on a facility specific basis for changes in patient case mix retroactive to the beginning date of the month in which the assessment of patients was scheduled by the department and performed by the facility.

(d) Adjusted payment rates shall be determined by recalculating a facility's number of patients in each patient classification group as a result of the submissions in accordance with this section and such results shall be used in the calculation of the facility specific direct adjusted payment price per day pursuant to section 86-2.10(c)(4) of this Subpart.

(e) Trending. Payment rates for the operating component of the rate as defined in section 86-2.l0(b)(2) of this Subpart may be adjusted for changes in the trend factors originally promulgated by the department in accordance with section 86-2.12 of this Subpart.
 

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Section 86-2.12 - Adjustments to basic rate

86-2.12 Adjustments to basic rate.

(a) To the allowable basic rate prior to the addition of capital costs and depreciation and interest related to movable equipment, there will be added a factor to project allowable cost increases during the effective period of the reimbursement rate. Such factor shall be determined as follows:

(1) The elements of a residential health care facility's cost shall be weighted based upon data for the following categories:

(i) salaries;

(ii) employee health and welfare expense;

(iii) nonpayroll administrative and general expense;

(iv) nonpayroll household and maintenance expense;

(vi) nonpayroll dietary expense; and

(vii) nonpayroll professional care expense.

(2) Each weight shall be adjusted by the appropriate price index for each category noted in paragraph (1) of this subdivision, as well as for subcategories. Included among these cost indicators are elements of the United States Department of Labor consumer and wholesale price indices and special indices developed by the State Commissioner of Health for this purpose.

(3) Geographic differentials may be established where appropriate.

(b) The cost indicators used in determining the projection factors shall be compared, on a semiannual basis with available data on such indicators, and any other economic indicators as deemed appropriate by the Commissioner of Health. Based upon such review the commissioner may, in his discretion, either certify new rates or adjust subsequent rates for any period or portion thereof when he determines that such new rates or adjusted rates are necessary to avoid substantial inequities arising from the use of previously certified rates.

(c) Beginning April 1, 1991, the commissioner, in accordance with the methodology developed pursuant to subdivisions (d), (e) and (f) of this section, shall establish trend factors for residential health care facilities to project allowable cost increases for the effects of inflation during the effective period of the reimbursement rate. The allowable basic rate prior to the addition of capital costs and depreciation and interest related to movable equipment shall be trended, beginning on April 1, 1991, to the applicable rate year by the trend factors developed in accordance with subdivisions (d) through (f) of this section.

(d) The methodology for developing the trend factors shall be established by a panel of four independent consultants with expertise in health economics appointed by the commissioner.

(e) Reserved.

(f)(1) On or about September first of each year, the consultants shall provide to the commissioner and the state hospital review and planning council, the methodology to be used to determine the trend factors for the rate period, commencing on the next January first. The commissioner shall monitor the actual price movements during these periods of the external price indicators used in the methodology, shall report the results of the monitoring to the consultants and shall implement the recommendations of the consultants for one prospective interim annual adjustment to the initial trend factors to reflect such price movements and to be effective on January first, one year after the initial trend factors were established and one prospective final annual adjustment to the revised trend factors to reflect such price movements and to be effective on January first, two years after the initial trend factors were established.

(2) Notwithstanding the dates specified in paragraph (1), the consultants shall provide as soon as possible to the commissioner and the state hospital review and planning council, the methodology to be used to determine the trend factors for the rate period April 1, 1991 to December 31, 1991. One prospective interim annual adjustment for this rate period shall be made on January 1, 1992 and one prospective final annual adjustment for this rate period shall be made January 1, 1993.

Effective Date: 
Tuesday, May 14, 1991
Doc Status: 
Complete

Section 86-2.13 - Adjustments to provisional rates based on errors

86-2.13 Adjustments to provisional rates based on errors.

(a) Errors resulting from submission of fiscal and statistical information by a residential health care facility may be corrected if brought to the attention of the State Commissioner of Health within 120 days of receipt of the commissioner's initial rate computation sheet. Errors on the part of the State Department of Health resulting from the rate computation process may be corrected if brought to the attention of the commissioner within 120 days of receipt of the commissioner's initial rate computation sheet. Subsequent errors on the part of the State Department of Health resulting from the revision of a rate may be corrected if brought to the attention of the commissioner within 30 days of receipt of the commissioner's revised rate computation sheet. In no event, however, shall a facility have less than 120 days from receipt of the initial rate computation sheets to bring errors to the attention of the commissioner.

(b) Rate appeals pursuant to this section, if not commenced within 120 days of receipt of the commissioner's initial rate computation sheet, may be initiated at time of audit of the base year cost figures at or prior to the audit exit conference. Such rate appeals shall be recognized only to the extent that they are based upon errors in the cost and/or statistical data submitted by the residential health care facility, or by revisions initiated by a third-party fiscal intermediary, or in the case of a governmental facility, by the sponsor government or errors made by the Department of Health.
 

Doc Status: 
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Section 86-2.14 - Revisions in certified rates

86-2.14 Revisions in certified rates.

(a) The State Commissioner of Health may consider only those applications for revisions of certified rates which are based on:

(1) cost reports filed pursuant to subdivision (e) of section 86-2.2 of this Subpart. Such rate shall become effective on the first day of the twelve-month period referred to in section 86-2.2(e) of this Subpart;

(2) six-month cost reports filed pursuant to sections 86-2.10(k)(6) and/or 86-2.15(e). Such rate shall become effective on the first day of the six-month period referred to in sections 86-2.10(k)(6) and 86-2.15(e) of this Subpart;

(3) errors made by the department in the rate calculation process and errors in data submitted by a medical facility which have been brought to the attention of the commissioner within the time limits prescribed in section 86-2.13 of this Subpart. This paragraph shall not apply to the patient assessment process as contained in section 86-2.30 of this Subpart;

(4) significant increases in the overall operating costs of a residential health care facility resulting from the implementation of additional programs or services specifically mandated for the facility by the commissioner;

(5) significant increases in the overall operating costs of a residential health care facility resulting from capital renovation, expansion, replacement or the inclusion of new programs or services approved for the facility by the commissioner;

(6) requests for waivers of any provisions of this Subpart for which waivers may be granted by the commissioner as prescribed in specific sections;

(7) alternative means of allocating costs in the cost-finding process which have been submitted with the annual cost report (RHCF-4) and approved in accordance with section 456.2(b) and (c) of this Title; and

(8) requests for relief from the provision of section 86-2.25 of this Subpart relating to compensation of other than the administrative type of services rendered by an operator or relative of an operator. Such request must contain sufficient documentation to demonstrate that the services rendered are necessary and are reasonably related to the efficient production of such services.

(b) An application by a residential health care facility for review of a certified rate is to be submitted on forms provided by the department and shall set forth the basis for the appeal and the issues of fact. Documentation shall accompany the application, where appropriate, and the department may request such additional documentation as determined necessary. An application based upon error shall be submitted within the time limit set forth in section 86-2.13 of this Subpart. Beginning with appeals for rate year 1983 and, on an annual basis thereafter for all subsequent rate year appeals, the commissioner shall act upon all properly documented applications for a rate year based upon errors within one year of the end of the 120-day period referred to in section 86-2.13(a) of this Subpart. The commissioner shall act upon all other properly documented applications for a rate year appeal submitted pursuant to paragraphs (1) and (3)-(7) of subdivision (a) of this section within one year of the end of the aforementioned 120-day period or the receipt of such applications, whichever date is later. In the event the department requests additional documentation, the one-year time limit shall be extended for a mutually agreed upon time period for receipt of the documentation established by the commissioner in conjunction with the residential health care facility. The deadline will be set according to the nature and quantity of documentation necessary. The one-year time limit shall not apply to rate appeals submitted pursuant to section 86-2.13(b) of this Subpart.

(1) The affirmation or revision of the rate upon such staff review shall be final, unless within 30 days of its receipt a hearing is requested, by registered or certified mail, before a rate review officer on forms supplied by the department. The request shall contain a statement of the factual issues to be resolved. The facility may submit memoranda on legal issues which it deems relevant to the appeal.

(2) Where the rate review officer determines that there is no factual issue, the request for a hearing shall be denied and the facility notified of such determination. No administrative appeals shall be available from this determination. The rate review officer, where he determines that there is factual issue, shall issue a notice of hearing establishing the date, time and place of the hearing and setting forth the factual issues as determined by such officer. The hearing shall be held in conformity with the provisions of Public Health Law, section 12-a and the State Administrative Procedure Act.

(3) The recommendation of the rate review officer shall be submitted to the Commissioner of Health for final approval or disapproval and recertification of the rate where appropriate. (4) The procedure set forth in this subdivision shall apply to all applications for rate reviews which are pending as of April 1, 1978. Rate appeals filed prior to April 1, 1978 will not be required to be resubmitted subsequent to April 1, 1978.

(c) Any modified rate certified under paragraphs (3) and (4) of subdivision (a) of this section shall be effective on the first day of the month in which the respective change is operational.

(d) In reviewing appeals for revisions to certified rates the commissioner may refuse to accept or consider an appeal from a residential health care facility:

(1) providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council;

(2) operated by the same management when it is determined by the department that this management is providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council in one of its facilities;

(3) where it has been determined by the commissioner that the operation is being conducted by a person or persons not properly established in accordance with the Public Health Law;

(4) where a fine or penalty has been imposed on the facility and such fine or penalty has not been paid. In such instances the provisions of subdivision (c) of this section shall not be effective until the date the appeal is accepted by the commissioner.

(e) Any residential health care facility determined after review by the State Hospital Review and Planning Council to be providing an unacceptable level of care shall have its current reimbursement rate reduced by 10 percent as of the first day of the month following 30 days after the date of the determination. This rate reduction shall remain in effect for a one-month period or until the first day of the month following 30 days after a determination that the level of care has been improved to an acceptable level, whichever is longer. Such reductions shall be in addition to any revision of rates based on audit exceptions.

(g) In order to promote labor stability in the residential health care facility industry, and to minimize the disruption of care to patients in residential health care facilities in the event of labor disputes, multi-year agreements are to be encouraged.

(1) In the case of a written multi-year commitment by a residential health care facility, a substantial number of whose employees are not represented by a labor organization, to increase compensation to all or a class of its employees on or after April 1, 1978, but before December 31, 1978, such facility may petition for a determination as to the adequacy of future revenues to meet the increased labor costs resulting from such multi-year commitment as provided in this paragraph.

(i) The petition brought by the facility shall be heard by a labor cost review panel to be comprised of one representative designated by the commissioner, one representative designated by the petitioner and a third party mutually agreed upon by the petitioner and the department (to be selected from a list of independent hearing officers designated as a commissioner's representative).

(ii) Such facility may file a petition each time an annual incremental labor cost occurs as a result of a multi-year commitment; however, no petition by or on behalf of any facility may be filed less than 12 months after the preceding petition. Any subsequent petition shall relate only to those incremental labor costs since those covered by the last petition.

(iii) The labor cost review panel shall determine the total amount by which such residential health care facility making a multi-year commitment has had increased labor costs as a result of the commitment, and shall determine the extent, if any, to which the current and projected revenues factored for labor costs are inadequate to cover such increased labor costs, provided that the panel may make no award to compensate for any disallowances. In reaching such determination, the labor cost review panel shall apply criteria agreed to by the petitioner and the department. Any areas of disagreement in the criteria shall be resolved by the panel. All such criteria and resulting recommendations are to be consistent with applicable Federal and State laws, rules and regulations.

(iv) Where the labor cost review panel determines that the multi-year commitment has increased labor costs beyond a facility's current and projected revenues factored for labor costs, the department shall certify a revised per diem Medicaid rate for such facility. No facility shall be entitled to an increase in rate with respect to the labor costs attributable to the commitment apart from the adjustment provided by this subdivision. (v) Any facility availing itself of these procedures does so with the understanding that it is choosing said procedure as an alternative to any other administrative or judicial review, and agrees that no other administrative or judicial review will be sought from a determination of the labor cost review panel.

(vi) The procedures of the labor cost review panel shall be governed by section 12-a of the Public Health Law, except that the parties to the proceeding may agree, with the consent of the panel, to modify the procedures.

(vii) In order to activate these procedures, the facility must file a petition within 60 days of the date of promulgation of the multi-year commitment or any increase in labor costs resulting therefrom. Upon the filing of the petition, an independent hearing officer, who has been designated as the commissioner's representative, will recommend whether the commitment is reasonable. The hearing before the labor cost review panel will be convened within 30 days from the date on which the petition is received at the Office of the Deputy Director for Health Care Financing, Office of Health Systems Management, Empire State Plaza, Albany, NY.

(viii) The decision of the labor cost review panel shall require the concurrence of two of the three members hearing the matter. A decision shall be issued within 30 days from the conclusion of the hearing or final submission of any additional documents, whichever is later.

(ix) Any revision in the per diem rate of payment for government programs resulting from application of this subdivision shall be effective on the effective date of the increased labor cost as provided in the multi-year commitment.

(x) The decision of the panel will not cause the imposition of labor cost ceiling disallowances, except that ceilings for overstaffing shall be applied.

(2) In the case of a multi-year collective bargaining agreement entered into by a residential health care facility, or an association of facilities, with a representative of their employees on or after April 1, 1978, but before December 31, 1978, the association of residential health care facilities, a member facility or any facility found by the commissioner to be affected by the agreement may petition for a determination as to the adequacy of future revenues to meet the increased labor costs resulting from such collective bargaining agreement as provided in this paragraph.

(i) The petition brought by the association or facility shall be heard by a labor cost review panel to be comprised of one representative designated by the commissioner, one representative designated by the petitioner and a third party mutually agreed upon by the petitioner and the department.

(ii) Within 21 days after receipt of the first petition concerning any collective bargaining agreement, the commissioner shall promulgate a list of facilities found to be affected by the collective bargaining agreement. Any facility found so affected shall be provided with notice of, and an opportunity to present evidence before in labor cost review panel. Such facility must request such opportunity within 21 day after receipt of the notice. Any facility not on the list shall have a period of 21 days from promulgation of the list to petition the commissioner to be included as a facility affected.

(iii) The facilities, or the association on behalf of individual facilities, may file petition each time an annual incremental labor cost occurs as a result of a collective bargaining agreement; however, no petition by or on behalf of any facility may be filed less than 12 months after the preceding petition. Any subsequent petition shall relate only to those incremental labor costs since those covered by the last petition.

(iv) The labor cost review panel shall determine the total amount by which each residential health care facility affected by the agreement has had increased labor costs as a result of the agreement, and shall determine the extent, if any, to which the current and projected revenues factored for labor costs are inadequate to cover such increased labor costs, provided that the panel may make no award to compensate for any disallowances. In reaching such determination, the labor cost review panel shall apply criteria agreed to by the petitioner and the department. Any areas of disagreement in the criteria shall be resolved by the panel. All such criteria and resulting recommendations are to be consistent with applicable Federal and State laws, rules and regulations.

(v) Where the labor cost review panel determines that the collective bargaining agreement has increased the labor costs beyond a facility's current and projected revenues factored for labor costs, the department shall certify a revised per diem Medicaid rate for each of the affected facilities. No facility shall be entitled to an increase in rate with respect to the labor costs attributable to the agreement apart from the adjustment provided by this subdivision. (v i) Any facility or association availing itself of these procedures does so with the understanding that it, or in the case of an association, its members, are choosing said procedure as an alternative to any other administrative or judicial review, and agrees that no other administrative or judicial review will be sought from a determination of the labor cost review panel.

(vii) The procedures of the labor cost review panel shall be governed by section 12-a of the Public Health Law, except that the parties to the proceeding may agree, with the consent of the panel, to modify the procedures.

(viii) In order to activate these procedures, the association or facility must file a petition within 60 days of the date of ratification of the collective bargaining agreement or any increase in labor costs resulting therefrom. Upon the filing of the petition an independent hearing officer, who has been designated as the commissioner's representative, will recommend whether the commitment is reasonable. The hearing before the labor cost review panel will be convened within 30 days from the date on which the petition is received at the Office of the Deputy Director for Health Care Financing, Office of Health Systems Management, Empire State Plaza, Albany, NY.

(ix) The decision of the labor cost review panel shall require the concurrence of two of the three members hearing the matter. A decision shall be issued within 30 days from the conclusion of the hearing or final submission of any additional documents, whichever is later.

(x) Any revision in the per diem rate of payment for government programs resulting from application of this subdivision shall be effective on the effective date of the increased labor cost as provided in the collective bargaining agreement.

(xi) The decision of the panel will not cause the imposition of labor cost ceiling disallowances, except that ceilings for overstaffing shall be applied.

(3) Any reimbursement to a facility pursuant to this subdivision shall be dependent upon approval of Federal financial participation by the United States Department of Health, Education and Welfare.

(4) This subdivision shall expire on December 31, 1981.
 

Effective Date: 
Thursday, April 1, 1993
Doc Status: 
Complete

Section 86-2.15 - Rates for residential health care facilities without adequate cost experience

86-2.15 Rates for residential health care facilities without adequate cost experience.

(a) (1) This subdivision shall apply where the fiscal and statistical data of the facility are unavailable through no fault of the provider or its agents, and due to circumstances beyond its control, or when there is a new facility without adequate cost experience as set forth in subdivision (e) of section 86-2.2 of this Subpart.

(2) The appointment of a receiver or the establishment of a new operator for an ongoing facility shall not be considered a new facility for the purposes of this section. Reimbursement for such receiver or new operator shall be in accordance with sections 86-2.10 and 86-2.11 of this Subpart.

(b)(1) Except as identified in paragraphs (5), (6) and (7) of this subdivision, for the first three months of operation, the direct component of the rate shall be equivalent to the statewide mean direct case mix neutral cost per day after application of the RDIPAF as determined pursuant to section 86-2.10 of this Subpart. The facility shall perform an assessment of all patients, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month thereafter until the end of the twelve-month cost report period referred to in section 86-2.2(e) of this Subpart or if applicable, the six-month cost report period identified in subdivision (e) of this section. The direct component of the rate shall be adjusted pursuant to section 86-2.10 of this Subpart, effective the first day of the month of each assessment period, based on the facility's case mix.

(2) Except as identified in paragraphs (5), (6) and (7) of this subdivision, for the first three months of operation, the indirect component of the rate shall be equivalent to a blended mean price for the applicable affiliation group as identified in subdivision (d) of section 86-2.10 of this Subpart. The blended mean price shall be established using a proportion of 60 residents in the high case mix index peer group and 40 residents in the low case mix index peer group both as identified in subdivision (d) of 86-2.10 of this Subpart, adjusted by the RIIPAF. Effective on the first day of the fourth month the indirect component shall be the mean price determined using the facility's PRI's and adjusted by the RIIPAF.

(3) The noncomparable component of the rate shall be determined on the basis of the generally applicable factors, including but not limited to the following:

(i) satisfactory cost projections:

(ii) allowable actual expenditures; and

(iii) an anticipated average utilization of no less than 90 percent.

(4) Rates established pursuant to this subdivision shall also include an adjustment pursuant to subdivision (u) of section 86-2.10 of this Subpart.

(5) Acquired Immune Deficiency Syndrome (AIDS). Except as identified in subparagraph (v) of this paragraph, a facility which is approved as a distinct AIDS facility or has a discrete AIDS unit pursuant to Part 710 of this Title, shall have rates established pursuant to this subdivision as follows:

(i) The direct component of the rate shall be determined in accordance with paragraph (1) of this subdivision provided however that the direct mean rate for the first three months of operation shall be determined pursuant to an approved facility's projection of case mix. The direct component of the rate shall be enhanced by an increment which shall be determined on the basis of the difference between budgeted costs of care and staffing levels for AIDS patients in specific patient classification groups and the costs of care and staffing levels for non-AIDS patients which are classified in the same patient classification groups based on data submitted by a facility. The increment to be included in the facility's rate pursuant to this subparagraph shall be approved by the commissioner, but in no event shall the increment be greater than 1.0. The direct component of the rate shall also be increased by an occupancy factor of 1.225.

(ii) The indirect component shall be determined in accordance with paragraph (2) of this subdivision provided however, that the indirect mean price for the first three months of operation shall be detemined pursuant to an approved facility's projection of case mix. The indirect component of the rate shall be increased by the AIDS factor as determined pursuant to section 86-2.10(p) of this Subpart.

(iii) The allowable costs for the central service supply functional cost center as listed in paragraph (1) of section 86-2.10(c) shall be considered a non-comparable cost.

(iv) Rates developed pursuant to this paragraph shall remain in effect until a facility submits twelve-month financial and statistical data pursuant to subdivision (e) of section 86-2.2 of this Subpart. (v) Notwithstanding the provisions of subparagraph (i), (ii), and (iii) of this paragraph, any facility which prior to April 1, 1991 has a rate approved and certified by the commissioner pursuant to section 2807 of the Public Health Law, which includes AIDS specific adjustments pursuant to this Subpart, or has been approved as an AIDS specific facility by the Public Health Council, and/or has had a certificate of need application approved or conditionally approved pursuant to Part 710 of this Title for the operation of a discrete AIDS unit shall have its rate determined in accordance with the following:

(a) The direct component of the rate shall be based on the statewide ceiling direct case mix neutral cost per day after application of the RDIPAF as determined pursuant to section 86-2.10 of this Subpart and a case mix proxy for AIDS patients established by this subparagraph, and increased by an occupancy factor of 1.225. The case mix proxy for AIDS patients shall be determined as follows:

(1) A facility which was approved based on a written application for establishment and/or construction which indicated that a majority of its AIDS patients would fall into patient classification groups with a case mix index exceeding 0.83 prior to application of any AIDS factors or increments identified in this subdivision shall be assigned a case mix proxy as determined by the following:

(i) For its first three months of operation, the facility shall be assigned a case mix proxy of 2.32.

(ii) Beginning with the start of the fourth month of operation, and pursuant to the facility's performance of patient assessments referred to in paragraph (1) of subdivision (b) of this section, an AIDS patient shall be assigned a case mix proxy based on the sum of responses to section III - Activities of Daily Living (ADLs), questions 19, 21, and 22 of the patient review instrument (PRI) as contained in section 86-2.30(i) of this Subpart as follows:

CASE MIXADL TOTAL PROXY
3-6 2.187-8 2.329 2.64

(2) A facility which was approved based on a written application for establishment and/or construction which indicated a majority of its AIDS patients would fall into patient classification groups with a case mix index equal to or less than 0.83 prior to application of any AIDS factors or increments identified in this subdivision shall have a case mix proxy equal to 1.55. This case mix proxy shall remain in effect until a facility submits financial and statistical data pursuant to subdivision (e) of section 86-2.2 of this Subpart.

(3)(i) The indirect component of the rate for facilities identified in subclause (1) of this clause shall be equivalent to the indirect ceiling price per day of the high intensity peer group established pursuant to paragraph (2) of subdivision (d) of section 86-2.10 of this Subpart after application of the RIIPAF as determined pursuant to section 86-2.10 of this Subpart and increased by the indirect AIDS factor as determined pursuant to subdivision (p) of section 86-2.10 of this Subpart.

(ii) The indirect component of the rate for facilities identified in subclause (2) of this clause shall be equivalent to the ceiling indirect price per day of the low intensity peer group established pursuant to paragraph (2) of subdivision (d) of section 86-2.10 of this Subpart after application of the RIIPAF as determined pursuant to section 86-2.10 of this Subpart and increased by the indirect AIDS factor as determined pursuant to subdivision (p) of section 86-2.10 of this Subpart.

(4) For purposes of this subparagraph, the allowable costs for the central service supply functional cost center as listed in paragraph (1) of section 86-2.10(c) shall be considered a non-comparable cost.

(5) Rates developed pursuant to this subparagraph shall remain in effect until a facility submits financial and statistical data pursuant to section 86-2.2(e) of this Subpart.

(6) Long-term inpatient rehabilitation program for traumatic brain-injured residents (TBI). A facility which is approved to operate discrete units for the care of residents under the long-term inpatient rehabilitation program for TBI patients established pursuant to section 415.36 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows: (i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of section 86-2.10 increased by a factor of 3.28 and adjusted by the RIIPAF pursuant to section 86-2.10. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph 1 of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to subdivision (c) of section 86-2.10 of this Subpart based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to paragraph (4) of subdivision (c) of section 86-2.10 for TBI residents shall be increased by an increment of 1.49.

(ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) of this Subpart for the applicable peer group established for high intensity case mix identified in paragraph (2) of subdivision (d) of section 86-2.10, adjusted by the RIIPAF pursuant to 86-2.10(d). The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.

(iii) The noncomparable component of the rate shall be determined as follows:

(a) For an existing facility that opens a discrete unit for the care of patients under the long-term inpatient rehabilitation program for TBI patients, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to subdivision (f) of section 86-2.10 plus approved budgeted costs for personnel required by section 415.36 of this Title that would be reported in the functional cost centers identified in subdivision (f) of section 86-2.10.

(b) For a new facility without a residential health care facility rate computed pursuant to section 86-2.10 of this Subpart, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision.

(iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u) of this Subpart.

(7) Long-term ventilator dependent residents. A facility which is approved to operate discrete units for the care of long-term ventilator dependent patients as established pursuant to section 415.38 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows:

(i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of section 86-2.10 increased by a factor of 2.89 and adjusted by the RDIPAF pursuant to section 86-2.10. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph 1 of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to subdivision (c) of section 86-2.10 based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to paragraph (4) of subdivision (c) of section 86-2.10 for long-term ventilator dependent residents shall be increased by an increment of 1.15.

(ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) for the applicable peer group established for high intensity case mix identified in paragraph (2) of subdivision (d) of section 86-2.10, adjusted by the RIIPAF pursuant to section 86-2.10(d). The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.

(iii) The noncomparable component of the rate shall be determined as follows:

(a) For an existing facility that is approved to operate discrete units for the care of long-term ventilator residents, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to subdivision (f) of section 86-2.10 plus approved budgeted costs as identified in clauses (c) and (d) of this subparagraph plus approved budgeted costs for personnel required by section 415.38 of this Title that would be reported in the functional cost centers identified in subdivision (f) of section 86-2.10. (b) For a new facility without a residential health care rate computed pursuant to section 86-2.10, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision and include approved budgeted costs identified in clauses (c) and (d) of this subparagraph.

(c) The approved budgeted costs for the central service supply functional cost center as listed in paragraph (1) of subdivision (c) of this section shall be considered a noncomparable cost reimbursed pursuant to subdivision (f) of this section.

(d) The approved budgeted costs for prescription drugs, specifically required by generally accepted standards of professional practice for long-term ventilator dependent residents, that are administered at a frequency and volume exceeding those of prescription drugs included in the direct component of the rate pursuant to subdivision (c) of this section shall be considered a noncomparable cost pursuant to section 86-2.10(f) of this Subpart.

(iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u).

(8) Specialized programs for residents requiring behavioral interventions. A facility which is approved to operate discrete units specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions as established pursuant to section 415.39 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows:

(i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to subparagraph (iii) of paragraph (3) of subdivision (c) of section 86-2.10 increased by a factor of 2.65 and adjusted by the RDIPAF pursuant to section 86-2.10 of this Subpart. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph 1 of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to subdivision (c) of section 86-2.10 based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to paragraph (4) of subdivision (c) of section 86-2.10 for residents requiring behavioral interventions shall be increased by an increment of 1.40.

(ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) of this Subpart for the applicable peer group established for high intensity case mix identified in paragraph (2) of subdivision (d) of section 86-2.10 of this Subpart, adjusted by the RIIPAF pursuant to section 86-2.10(d) of this Subpart. The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.

(iii) The noncomparable component of the rate shall be determined as follows:

(a) For an existing facility that is approved to operate discrete units specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to subdivision (f) of section 86-2.10 plus approved budgeted costs for personnel required by section 415.39 of this Title that would be reported in the functional cost centers identified in subdivision (f) of section 86-2.10 of this Subpart.

(b) For a new facility without a residential health care rate computed pursuant to section 86-2.10, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision.

(iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u).

(c) The rates developed pursuant to this section shall remain in effect until a facility submits a twelve-month cost report in accordance with section 86-2.2(e) of this Subpart for a twelve-month period during which the facility had an overall average utilization of at least 90 percent of bed capacity. This cost report shall be used to adjust the direct, indirect, noncomparable and capital components of the rate effective on the first day of the cost report period. (d) All rates of reimbursement certified pursuant to this section shall be subject to audit pursuant to section 86-2.7 of this Subpart. After audit, the facility shall receive a rate based upon actual allowable costs incurred during the rate period, and computed in accordance with section 86-2.10 of this Subpart. Except as described in section 86-2.19(d)(2) of this Subpart, an occupancy rate of not less than 90 percent shall be used when calculating the capital and noncomparable components in the rate calculation.

(e) Notwithstanding the provisions of this section, an operator of a facility which has had an overall average utilization of at least 90 percent of bed capacity for a six-month period which began prior to April 1, 1993 but after the date on which the operator began operations shall submit a six-month cost report for that period. Such six-month cost report shall be utilized for purposes of this section in lieu of the twelve-month cost report identified in subdivision (e) of section 86-2.2 of this Subpart.

Effective Date: 
Friday, December 23, 1994
Doc Status: 
Complete

Section 86-2.16 - Less expensive alternatives

86-2.16 Less expensive alternatives. Reimbursement for the cost of providing services may be the lesser of the actual costs incurred or those costs which could reasonably be anticipated if such services had been provided by the operation of joint central services or use of facilities or services which could have served effective alternatives or substitutes for the whole or any part of such service.

Doc Status: 
Complete

Section 86-2.17 - Allowable costs

86-2.17 Allowable costs.

(a) To be considered as allowable in determining reimbursement rates, costs shall be properly chargeable to necessary patient care. Except as otherwise provided in this Subpart, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under title XVIII of the Federal Social Security Act (Medicare) program.

(b) Allowable cost shall include a monetary value assigned to services provided by religious orders and for services rendered by an owner and operator of a residential health care facility.

(c) Allowable costs may not include amounts in excess of reasonable or maximum Title XVIII of the Federal Social Security Act (Medicare) or in excess of customary charges to the general public. For purposes of this determination, customary charges to the general public shall equal an average of the applicable charges weighted by patient days. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee.

(d) Allowable costs shall not include expenses or portions of expenses reported by individual residential health care facilities which are determined by the commissioner not to be reasonably related to the efficient production of service because of either the nature or amount of the particular item.

(e) Any general ceilings applied by the commissioner, as to allowable costs in the computation of reimbursement rates, shall be published in a hospital memorandum or other appropriate manner.

(f) Allowable costs shall not include costs not properly related to patient care or treatment which principally afford diversion, entertainment or amusement to owners, operators or employees of residential health care facilities.

(g) Allowable costs shall not include any interest charged related to rate determination or penalty imposed by governmental agencies or courts, and the costs of policies obtained solely to insure against the imposition of such a penalty.

(h) Allowable costs shall not include the direct or indirect costs of advertising, public relations or promotion except in those instances where the advertising is specifically related to the operation of the residential health care facility and not for the purpose of attracting patients.

(i) Allowable costs shall not include costs of contributions or other payments to political parties, candidates or organizations.

(j) Allowable costs shall include only that portion of the dues paid to any professional association which has been demonstrated, to the satisfaction of the commissioner, to be allocable to expenditures other than for public relations, advertising or political contributions. Any such costs shall also be subject to any cost ceilings that may be promulgated by the commissioner.

(k) Allowable costs shall not include any element of cost as determined by the commissioner to have been created by the sale of a residential health care facility.

(l) Allowable costs shall not include the interest paid to a lender related through control, ownership, affiliation or personal relationship to the borrower, except in instances where the prior approval of the Commissioner of Health has been obtained.

(m) Allowable costs shall be reduced by income earned for Medicare part B eligible services to the extent that Medicaid has paid for these services.

(n) Allowable costs shall include any fee assessed by the commissioner on a residential health care facility, for the purpose of providing revenue for the account established pursuant to chapter 1021 of the Laws of 1981. The reimbursement rate for a facility shall reflect the cost of the annual fee prior to collection of the fee through the rate of reimbursement.
 

Effective Date: 
Thursday, December 27, 1990
Doc Status: 
Complete

Section 86-2.18 - Recoveries of expense

86-2.18 Recoveries of expense.

(a) Operating costs shall be reduced by the costs of services and activities which are not properly chargeable to patient care. In the event that the State Commissioner of Health determines that it is not practical to establish the costs of such services and activities, the income derived therefrom may be substituted for costs of these services and activities. Examples of activities and services covered by this provision include:

(1) drugs and supplies sold to other than employees for use outside the residential health care facility;

(2) telephone and telegraph services for which a charge is made;

(3) discount on purchases;

(4) living quarters rented to persons other than employees;

(5) meals provided to special nurses or patients' guests;

(6) operation of parking facilities for community convenience;

(7) lease of office and other space of concessionaires providing services not related to residential health care facility service; and

(8) tuitions and other payments for educational service, room and board and other services not directly related to residential health care facility service.

(b) Operating costs shall be reduced by the actual revenue received from services and activities which are provided to employees at less than cost, as a form of fringe benefit. Examples of activities and services covered by this provision include:

(1) drugs and supplies sold or provided to employees;

(2) living quarters rented or provided to employees; and

(3) meals sold or provided to employees.
 

Doc Status: 
Complete

Section 86-2.19 - Depreciation for voluntary and public residential health care facilities

86-2.19 Depreciation for voluntary and public residential health care facilities.

(a) Reported depreciation based on approved historical cost of buildings, fixed equipment and capital improvements thereto is recognized as a proper element of cost for voluntary and public residential health care facilities. Useful lives shall be the higher of the reported useful life or those useful lives from the most recent edition of Estimated Useful Lives of Depreciable Hospital Assets, American Hospital Association.

(b) In the computation of rates effective for voluntary residential health care facilities, depreciation shall be included on a straight line method on plant and nonmovable equipment. Depreciation shall be funded unless the Commissioner of Health shall have determined, upon application by the residential health care facility, and after inviting written comments from interested parties, that the requested waiver of the requirements for funding is a matter of public interest and necessity. In instances where funding is required, such fund may be used only for capital expenditures with approval as required or for the amortization of capital indebtedness. Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded. Board-designated funds and the accrual of liabilities to the funded depreciation accounts (due to/from accounts) shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts to be considered as valid funding transactions unless expended for the purpose for which it was funded.

(c) In the computation of rates for public residential health care facilities, depreciation is to be included on a straight line method on plant and nonmovable equipment.

(d) Residential health care facilities financed by mortgage loans pursuant to the Nursing Home Companies Law or the Hospital Mortgage Loan Construction Law (defined as "facilities" for purposes of this subdivision only) shall conform to the requirements of this Subpart.

(1) In lieu of depreciation and interest, on the loan-financed portion of the facilities the State Commissioner of Health shall allow debt service on the mortgage loan as set forth in the mortgage repayment schedule computed by the Medical Care Facilities Finance Agency, together with such required fixed charges, sinking funds and reserves as may be determined by the commissioner as necessary to assure repayment of the mortgage indebtedness. Such mortgage repayment schedule may allow for the accelerated repayment of the soft costs, including, but not limited to, mortgage and bond insurance costs, start-up operating costs, underwriter discounts, government agency fees and investment contract fees, included in the approved total project cost.

(2) Effective January 1, 1995 for facilities in an initial period of operation, facilities which have approved discrete units serving specialty populations as defined in paragraphs (5), (6), (7) and (8) of section 86-2.15(b) of this Subpart, which serve AIDS residents, long term ventilator dependent residents, residents requiring behavioral interventions in specialized programs or traumatic brain injured residents who receive long term inpatient rehabilitation, respectively, shall be reimbursed for certain capital expenditures requiring a cash outlay as follows:

(i) Debt service amortization and interest, property insurance and SONYMA annual fees shall be divided by an estimate of patient days in the calculation of the capital component of the specialty population unit rate that is promulgated for the initial period of operation.

(a) An estimate of patient days shall be determined by the department based on a reasonable projection of utilization during the initial period of operation. The reasonable projection of utilization shall be based on factors that shall include, but not be limited to, prior initial utilization of similarly situated facilities.

(b) Initial period of operation is defined as the period commencing on the initial effective date on which the facility is certified by the department to begin operation of the discrete unit(s) identified in paragraph (2) of this subdivision, and ending on the last day of the twelfth month of continuous operation or the beginning date of the initial cost report filed in accordance with subdivision (e) of section 86-2.2 of this Subpart, whichever is shorter.

(ii) The capital component of the facility's rate for the initial period of operation shall be subject to audit for utilization based on actual patient days in the initial period of operation. Such capital component of the rate shall be retrospectively or prospectively adjusted based on such audit. (e) In the computation of rates for voluntary residential health care facilities which are rented from proprietary interests, the provisions of section 86-2.21 of this Subpart shall apply, except where the realty was previously owned by the voluntary residential health care facility or where the proprietary interest has representation on the board of directors of the voluntary residential health care facility.

(f)(1) In the event that a residential health care facility is sold or leased or is the subject of any other realty transaction, the capital cost component of such rate shall be considered to be continuing with the same force and effect as though such sale, lease or other realty transaction has not occurred.

(2) A lease with a related organization described in subdivisions (a) or (d) of section 86-2.26 of this Subpart shall be deemed to be a non-arms length lease.

(3) Any capital expenditures associated with non-arms length leases shall be approved and certified to, if required, pursuant to Article 28 of the Public Health Law. In the computation of reimbursement for non-arms length leases, the capital cost shall be included in allowable costs only to the extent that it does not exceed the amount which the facility would have included in allowable costs if it had legal title to the asset (the cost of ownership), such as straight-line depreciation, insurance and interest. Accelerated depreciation on these assets may not be included in allowable costs under any circumstances.

(g) (1) The provisions of subdivision (a) of this section may be waived for certain qualifying facilities. In order to be considered a qualifying facility, all of the following conditions must be met:

(i) A sale or transfer between nonrelated parties must take place.

(ii) The purchaser must assume the seller's remaining mortgage repayment schedule at the associated fixed rate of interest.

(iii) The difference between the unpaid principal balance of the seller's mortgage (first mortgage) and the Medicaid-allowable transfer price must be generated either from second mortgage proceeds or contributed equity capital or both.

(iv) The annual amount of allowable interest expense incurred as described in section 86-2.20 of this Subpart under terms of the first and second mortgage, plus the annual principal debt amortization, exclusive of that portion attributable to the acquisition of land must be less than that which would otherwise be reimbursed pursuant to subdivision (a) of this section and section 86-2.20 of this Subpart if no assumption of the existing first mortgage were made. (This comparison is hereinafter referred to as the comparative analysis test.)

(v) For purposes of this subdivision, the loan-financed portion of the Medicaid-allowable transfer price shall be held constant and the comparative analysis test shall be applied to each year of the effective term of the first and second mortgages. Equity capital will be considered as first applying to the acquisition of the land, then to the acquisition of the building. In instances where more than one facility is involved in the transaction, the facilities may be combined for purposes of the comparative analysis test.

(2) Qualifying facilities shall be reimbursed principal debt amortization, interest and return of equity in the following manner:

(i) Principal debt amortization. In each year, during the effective term of the mortgage, the capital cost component of the rate shall include a payment factor sufficient to reimburse the principal debt amortization component of the allowable portion of the mortgage, with the exception of that portion of the indebtedness which is attributable to the acquisition of the land.

(ii) Interest. The capital cost component shall include a payment factor sufficient to reimburse interest associated with the allowable portion of the mortgage at a rate which the commissioner finds to be reasonable and is in accordance with the provisions of section 86-2.20 of this Subpart.

(iii) Return of equity. The equity portion of the Medicaid-allowable transfer price, except for that portion which is attributable to the acquisition of the land, shall be reimbursed in equal annual amounts beginning in the first year following the expiration of the term of the mortgages over the remaining useful facility life.
 

Effective Date: 
Friday, December 23, 1994
Doc Status: 
Complete

Section 86-2.20 - Interest for all residential health care facilities

86-2.20 Interest for all residential health care facilities.

(a) Necessary interest on both current and capital indebtedness is an allowable cost for all residential health care facilities.

(b) To be considered as an allowable cost, debt generating interest shall be incurred to satisfy a financial need, and interest expense shall be at a rate not in excess of what a prudent borrower would have had to pay in the money market at the time the loan was made. Also, the interest shall be paid to a lender not related through control, ownership, affiliation or personal relationship to the borrower, except in instances where the prior approval of the Commissioner of Health has been obtained. Financial need for capital indebtedness relating to a specific project shall exist when all available restricted funds designated for capital acquisition of that type have been considered for equity purposes.

(c)(1) Interest expense shall be reduced by investment income with the exception of income from funded depreciation, qualified pension funds, trusteed malpractice insurance funds, or in instances where income from gifts or grants is restricted by donors. Interest on funds borrowed from a donor-restricted fund or funded depreciation is an allowable expense. Investment income shall be defined as the aggregate net amount realized from dividends, interest, rental income, interest earned on temporary investment of withholding taxes, as well as all gains and losses. If the aggregate net amount realized is a loss, the loss is not allowable.

(2) For rate years beginning prior to January 1, 1994, investment income reported for the fiscal year ending December 31, 1983, (or for a subsequent fiscal year if that subsequent year's report is being used by the department to establish the basic rate pursuant to section 86-2.10 of this Subpart) shall reduce the interest expense allowed for reimbursement as follows:

(i) For all residential health care facilities, investment income shall first reduce the interest expense allowed each year for operational cost reimbursement; and

(ii) the amount of any remaining investment income, after application of subparagraph (i), shall reduce the interest expense reimbursed each year as capital cost for residential health care facilities; and

(iii) the amount of any remaining investment income after application of subparagraph (ii), shall not be considered in the computation of the rate.

(3) For rate years beginning on or after January 1, 1994, for all residential health care facilities, investment income reported for the same year used to compute capital cost reimbursement for a facility's rate shall reduce the interest expense allowed for reimbursement.

(d)(1) Interest on current indebtedness shall be treated and reported as an operating, administrative expense for rate years beginning prior to January 1, 1994. For rate years beginning on or after January 1, 1994, interest on current indebtedness, reported for the same cost report period used to compute capital cost reimbursement for a facility's rate, shall be reported as an administrative expense and reimbursed as a nontrendable expense.

(2)(i) Approval by the commissioner shall be required for reimbursement of interest expense on current indebtedness incurred on or after January 1, 1994 when such interest expense exceeds the threshold established for that calendar year. The threshold for each calendar year shall be equal to the interest charges that would be generated by current indebtedness with an interest rate equal to the prime lending rate as published in the first issue of the Wall Street Journal for the calendar year plus 200 basis points on a loan principal of $270,000 for facilities with 120 or less beds or $270,000 plus an additional $2,250 for each bed over 120 for facilities with more than 120 beds. Approval shall be granted in accordance with the standards set forth in subdivision (b) of this section. Prior approval shall not be required.

(ii) New facilities without adequate cost experience whose rates are calculated pursuant to section 86-2.15 of this Subpart shall be exempt from the requirements in subparagraph (a) until January 1st of the first calendar year used as the basis for computing capital cost reimbursement and for which a cost report is filed subsequent to the cost report described in section 86-2.2(e) of this Subpart. This exemption shall not apply to operating facilities that open new discrete units providing services reimbursed in accordance with the provisions of paragraphs (5), (6) and/or (7) of section 86-2.15(b) of this Subpart or other similar discrete units providing care to residents with special needs that receive a separate and distinct payment rate under section 86-2.15 of this Subpart.

(iii) The interest expense threshold for facilities operated by receivers or new operators who are required to file a cost report for the first twelve-month period of operation pursuant to section 86-2.10(k) of this Subpart shall be established for that cost report period in accordance with subparagraph (a) of this paragraph, using the prime lending rate in effect on January 1st of the year in which the cost report period begins. (e) Interest on capital indebtedness, as defined in paragraph 86-2.21(a)(1) of this Subpart, except as provided for in section 86-2.20(c) of this Subpart for rate years beginning January 1, 1986 and thereafter, is an allowable cost if the debt generating the interest is approved by the commissioner, incurred for authorized purposes, and the principal of the debt does not exceed either the approval of the commissioner or the cost of the authorized purposes. Interest related to refinancing indebtedness shall be considered an allowable cost only to the extent that it is payable with respect to an amount equal to the unpaid principal of the indebtedness than being refinanced. However, interest incurred on refinanced debt in excess of the previously unpaid balance of the refinanced indebtedness will be allowable on acceptable demonstration of the Commissioner of Health that such refinancing will result in a debt service savings over the life of the indebtedness.

(f) Where a public finance authority has established a mortgage rate of interest such that sufficient cash flows exist to retire the mortgage prior to the stated maturity, the amount of the mortgage to be forgiven, at the time of such forgiveness, shall be capitalized as a deferred asset and amortized over the remaining mortgage life, as a reduction to the facility's capital expense.

(g) Voluntary facilities shall report mortgage obligations financed by public finance authorities for their benefit and which they are responsible to repay, as liabilities in the general fund when such mortgage obligations are incurred.
 

Effective Date: 
Tuesday, December 28, 1993
Doc Status: 
Complete

Section 86-2.21 - Capital cost reimbursement for proprietary residential health care facilities

86-2.21 Capital cost reimbursement for proprietary residential health care facilities.

(a) Definitions. As used in this section, the following terms shall be defined as follows:

(1) Capital indebtedness. The term capital indebtedness shall mean all debt obligations of a facility that are:

(i) evidenced by a mortgage note or bond and secured by a mortgage on the land, building or nonmovable equipment of a facility or evidenced by a note incurred in accordance with subparagraph (ii) of this paragraph;

(ii) incurred for the purpose of financing the acquisition, construction or renovation of land, building or nonmovable equipment (hereinafter called the "authorized purpose"); and

(iii) found by the commissioner to be reasonable, necessary and in the public interest with respect to the facility in accordance with standards set forth in section 86-2.21(e)(3)(ii) of this Subpart. Refinancing of capital indebtedness shall be recognized only to the extent of the then unpaid balance of the debt being refinanced.

(2) Commissioner. The term commissioner shall mean the Commissioner of Health of the State of New York.

(3) Department. The term Department shall mean the Department of Health of the State of New York.

(4) Equity. The term equity shall mean all cash or other assets, net of liabilities, invested by a facility or its operator in land, building and nonmovable equipment, and found by the commissioner to be reasonable, necessary and in the public interest with respect to the facility. Equity shall not include any change in the book value of a facility resulting from revaluation of assets or from the amortization of capital indebtedness resulting from payments made pursuant to subdivision (e), paragraph (3) of this section.

(5) Facility. The term facility shall mean a proprietary residential health care facility, as the term residential health care facility is defined in article 28 of the Public Health Law and in regulations of the department.

(6) Initial allowed facility cost. The term initial allowed facility cost shall mean the portion of certified costs approved by the commissioner or, in the case of facilities granted operating certificates prior to April 15, 1973, the costs of the facility as verified by audit to the satisfaction of the commissioner or, in the case of facilities not able to comply with either of the foregoing standards, costs imputed pursuant to subdivision (g) of this section, in or prior to the first year of useful facility life attributable to the acquisition of land and the construction, acquisition or renovation of building and nonmovable equipment. The commissioner shall disregard any costs relating to prior transactions involving the facility which he finds were not bona fide or the terms of which are found to be other than fair and reasonable.

(7) Useful facility life. The term useful facility life shall mean a period of 40 years measured from the calendar year in which a facility commences operations as determined by the commissioner.

(8) Rate of return. The term rate of return shall mean the annual rate of return on equity invested, and said rate for a rate year shall be equal to the yield on thirty year United States Treasury bonds in effect on the second Wednesday of September of the year prior to the rate year.

(9) Capital improvement. The term capital improvement shall mean any addition to, replacement of, or improvement of a capital item of plant or nonmovable equipment approved by the commissioner as reasonable, necessary and in the public interest.

(10) Capital improvement cost. The term capital improvement cost shall mean the actual expenditure or portion thereof attributable to a capital improvement approved by the commissioner as reasonable, necessary and in the public interest.

(11) Hospital-based residential health care facility. The term hospital-based residential health care facility shall mean a facility holding a certificate of operation as a residential health care facility which is wholly owned by a hospital as that term is defined in Subpart 86-1 of this Title, and is physically located in a building or buildings, part of which building or buildings are also used for provision of acute care hospital services.

(12) Effective term. The term effective term shall mean the number of years and months required, pursuant to the term of the note or mortgage, to fully amortize the principal of the debt, predicated upon the regular principal payments required by the mortgage or note, but determined without regard to any provision for making the balance all due and payable at a given date or upon a stated event, and without regard to any provision for acceleration of the debt or any original or subsequent agreement for the suspension or moratorium of principal payments. (b) Subject to subdivision (f) of this section, the reimbursement rate of every facility certified by the commissioner and approved by the State Director of the Budget pursuant to article 28 of the Public Health Law shall, in each year of useful facility life, include a capital cost component determined in accordance with the provisions of subdivision (c), (d) or (e) of this section applicable to the facility in such year.

(c) (1) The provisions of subdivision (e) of this section shall not apply for the term prescribed by paragraph (3) of this subdivision to any facility which, as of the effective date of this section, is located in and operated from leased space pursuant to a lease:

(i) which was entered into and approved for reimbursement prior to March 10, 1975; and

(ii) which the commissioner finds to be bona fide, valid and noncancelable; and

(iii) the payments, or a portion thereof, made pursuant to such lease are found by the commissioner to have been the proper basis for reimbursement of capital paid to such facility pursuant to article 28 of the Public Health Law prior to March 10, 1975.

(2) The capital cost component of a facility within the provisions of paragraph (1) of this subdivision shall, for the term prescribed by paragraph (3) of this subdivision, consist of a payment factor sufficient to reimburse the facility for the total payments required under its lease to the extent approved by the commissioner pursuant to paragraph (1) of this subdivision, and subject to the historical limitations set forth by the commissioner.

(3) Capital cost reimbursement for leased facilities shall be made pursuant to this subdivision for the balance of the lease term (computed without regard to any future extension or option to renew authorized by the lease) remaining as of the effective date of this subdivision. Upon the expiration of such balance of the lease term provided in an approved lease (as said lease so provides as of August 1, 1977) or such earlier expiration date as may be agreed to by the parties to an approved lease, capital cost reimbursement shall be made pursuant to subdivision (e) of this section notwithstanding any extension or renewal of such lease or the execution of a new lease by or on behalf of the facility; provided, however, that the commissioner may, in his discretion, continue capital cost reimbursement for such leased facilities pursuant to this subdivision, at a rental amount approved by the commissioner prior to such extension or renewal, and not pursuant to subdivision (e), upon his finding that there is a public need for such facility at the time and place and under the circumstances proposed and that the continued operation of such facility would be jeopardized by a limitation of reimbursement pursuant to subdivision (e).

(4) A lease with a related organization described in subdivisions (a) or (d) of section 86-2.26 of this Subpart shall be deemed to be a non-arms length lease.

(5) Any capital expenditures associated with non-arms length leases shall be approved and certified to, if required, pursuant to Article 28 of the Public Health Law. In the computation of reimbursement for non-arms length leases, the capital cost shall be included in allowable costs only to the extent that it does not exceed the amount which the facility would have included in allowable costs if it had legal title to the asset (the cost of ownership), such as straight-line depreciation, insurance and interest. Accelerated depreciation on these assets may not be included in allowable costs under any circumstances. (d) The provisions of subdivision (e) of this section shall not apply to hospital-based residential health care facilities. Such facilities will be reimbursed pursuant to capital cost regulations in Subpart 86-1 of this Part.

(e) (1) Subject to the provisions of subdivisions (c), (d) and (f) of this section, the capital cost component for every facility shall consist of the payment factors provided in this subdivision that, in any year of useful facility life, are applicable to the facility.

(2) Interest. The capital cost component shall, in each year of useful facility life, include a payment factor sufficient to reimburse, at a rate which the commissioner finds to be reasonable under the circumstances prevailing at the time of the placing of the capital indebtedness, interest on capital indebtedness.

(3) Amortization. (i) Subject to the limitations of paragraph (5) of this subdivision, the capital cost component shall, in each year of useful facility life, include a payment factor sufficient to reimburse the amortization component of capital indebtedness pursuant to the terms of the mortgage note or bond.

(ii) The capital indebtedness of a facility, to the extent that the original principal of such debt does not exceed the initial allowed facility cost of the facility, shall be recognized as follows: (a)For capital indebtedness with an effective term of 10 years or less, amortization expense will be recognized for the purpose of reimbursement only, if the schedule of debt amortization is within the limitation set forth in section 86-2.21(e)(5) of this Subpart for each of the years of debt amortization.

(b)For capital indebtedness with an effective term in excess of 10 years, amortization expense will be recognized for the purpose of reimbursement upon a determination by the commissioner that the following standards are met:

(1) the debt is incurred for authorized purposes;

(2) the interest rate is reasonable for the time and place in which the capital indebtedness is committed, and for the type of indebtedness associated with the interest rate;

(3) the amortization schedule is reasonable (amortization must be required in each year of the mortgage in accordance with the established financial practices);

(4) the effective term is consistent with customary commercial practices in the geographic area of the facility; and

(5) the effective term is in accordance with efficient production of services.

(c)For capital indebtedness other than first mortgages, the amortization expense will be recognized for the purpose of reimbursement upon a determination by the commissioner that the debt, complies with the standards set forth in section 86-2.21(e)(3)(ii)(b) of this Subpart, and the following additional standards:

(1) they must be incurred for the purpose of financing either an approved purchase or construction of a facility; and

(2) the effective term of financing for a capital improvement is reasonable when compared to the estimated useful life of the improvement.

(d)Capital indebtedness for any unauthorized purpose will not be recognized for any reimbursement purpose.

(4) Return of equity. Subject to the limitations of paragraph (5) of this subdivision, the capital cost component shall include a payment factor sufficient to return equity. A facility shall be eligible for the return of equity commencing in the first year following the department's determination, among other factors, that the facility has the ability to meet current capital indebtedness (including principal and interest) over the balance of useful facility life. This shall mean that within the confines of the regulations expressed in this Subpart, capital reimbursement will be sufficient to provide for the remaining amortization of capital indebtedness. The commissioner's determination shall also take into account such factors as the age, size, location and condition of the facility, and the financial condition of the facility.

(5) Limitation. (i) Annual reimbursement payments for capital cost under paragraphs (3) and (4) of this subdivision shall not at any time result in accumulative average payment in excess of three and three one-hundredths percent of initial allowed facility cost. For years prior to 1981, actual amortization or depreciation paid by Medicaid will be used in the computation of the limitation. For years prior to Medicaid or in years when Medicaid payments did not include an expense equivalent of depreciation or amortization, a three and three one-hundredths percent payment will be imputed.

(ii) This limitation may be waived by the commissioner where a facility applies to the commissioner for approval to refinance an existing mortgage because its recognized amortization expense exceeds the amount of allowable reimbursement for amortization of principal and interest expense (including credit from prior amortization reimbursement). In those instances where the commissioner determines that it would be more expensive to reimburse the debt service that would be incurred if the facility refinanced the remaining principal, than it would be to continue to reimburse the debt service on the existing mortgage, the commissioner may reimburse up to the actual debt service incurred by the facility under the existing mortgage, plus return on equity in accordance with the provisions of paragraph (6) of this subdivision.

(6) Return on equity. The capital cost component for every facility shall include a payment factor sufficient to pay an annual rate of return on average equity, as such average annual equity shall be determined by the commissioner in each year of useful facility life.

(7) Residual reimbursement. After the expiration of useful facility life, the commissioner may approve a payment factor for any facility for which he determines that continued capital cost reimbursement is appropriate; provided, however, that such payment factor shall not exceed one half of the capital cost reimbursement received by such facility in the final year of useful facility life. (8) Capital improvement cost reimbursement. (i) The capital improvement cost shall be reimbursed by adjusting the initial allowed facility cost, capital indebtedness, equity determinations and limitations as stated in paragraph (5) of this subdivision, to include the capital improvement cost.

(ii) Adjustments in accordance with subparagraph (i) of this paragraph shall be made in the following manner:

(a)if the cost of an improvement is $100,000 or more, and certificate of need approval has been granted by the commissioner, then component useful life for the improvement will be permitted. Such component useful life will be equivalent to the estimated asset life in accordance with the Medicare Provider Reimbursement Manual or the remaining useful life of the facility, whichever is less. Where a capital improvement adjusts the expected useful life of the facility beyond the remaining portion of the original useful facility life, the limitation set forth in section 86-2.21(e)(5) of this Subpart, will be increased to allow for the reimbursement of the amortization component of the debt obtained to finance the improvement.

(b)If the cost of an improvement is less than $100,000, then the cost will be reimbursed over the remaining portion of the expected useful life. In such instances the reimbursement will commence with either the reporting of such costs on an annual certified cost report or, upon submission of a cost report, certified by an independent public accountant, whichever is submitted first. In either event, the reporting of such costs must be accompanied by a sworn statement by the administrator or the chief fiscal officer of the facility to the effect that the improvements made are not part of a number of planned related projects which, in the aggregate, total $100,000 or more.

(c)If the cost of an improvement is less than $100,000 and:

(1)is undertaken as the result of an emergency situation;

(2)affects the health and safety of the patients; and

(3)the facility can demonstrate dire financial condition; then the limitation set forth in section 86-2.21(e)(6) of this Subpart will be modified to allow for the reimbursement of the debt service associated with the financing of the approved capital improvement over the effective term of the obligation or five years, whichever is greater. Any contribution to the improvement by the facility and not financed by the debt obligation will be considered an equity contribution and an adjustment to the facility's total capital equity will be made.

(d)If a facility undertakes an authorized improvement without incurring additional debt, then the facility will receive a return on equity and, when a determination has been made in accordance with section 86-2.21(e)(4) of this Subpart, a return of equity, for the funds invested in the improvement.

(f) (1) With respect to facilities granted operating certificates prior to March 10, 1975, the commissioner may modify or provide exceptions to subdivision (c) or (e) of this section in circumstances where he finds that application of the provisions of either subdivision would result in (i) excessive reimbursement to the facility, or (ii) severe economic hardship to the facility not caused by circumstances reasonably under the control of the facility. In determining severe economic hardship, the commissioner shall consider such factors as debt service required on capital indebtedness, prior withdrawal of assets from the facility, and the financial condition of the facility in general. In such cases where the commissioner makes a finding of severe economic hardship, the capital cost component of the rate shall not exceed the debt service on capital indebtedness.

(2) The commissioner may revise the capital cost component of the reimbursement rate applicable to any facility which he determines is based upon previous error, deceit or any other misrepresentation or misstatement by the facility.

(3) The capital cost component shall not be affected by any sale, lease or transfer occurring after March 10, 1975.

(g) In lieu of determining initial allowed facility cost pursuant to subdivision (a) of this section, the commissioner may estimate the original fair and reasonable cost of the facility with due regard for the fair and reasonable cost of facilities of comparable age, size, location and condition, and impute an initial allowed facility cost to:

(1) every facility for which records on the historical cost or book value of land, building or nonmovable equipment are not available or not verifiable to the satisfaction of the commissioner; (2) every leased facility which, as of the effective date of this section, is not eligible for reimbursement pursuant to subdivision (c) of this section;

(3) every facility which, after the effective date of this section, ceases to be eligible for reimbursement pursuant to subdivision (c) of this section and becomes eligible for reimbursement pursuant to subdivision (e) of this section; or

(4) every facility whose construction was completed prior to the calendar year in which this section becomes effective and whose initial facility year occurs in or after the calendar year in which this section becomes effective.

(h) In the event that a facility fails to submit information necessary for the implementation of this section, after notification pursuant to subdivision (f) of section 86-2.2 of this Subpart, the capital cost component of the rate shall consist of interest, if reported, and amortization not in excess of the lesser of the amortization payment required under capital indebtedness, or 2-1/2 percent of initial allowed facility cost.

(i) (1) The limitation provision of paragraph (e)(5) of this section may be waived for certain qualifying facilities. In order to be considered a qualifying transaction, ail of the following conditions must be met:

(i) A sale or transfer between nonrelated parties must take place.

(ii) The purchaser must assume the seller's remaining mortgage repayment schedule at the associated fixed rate of interest.

(iii) The difference between the unpaid principal balance of the seller's mortgage (first mortgage) and the Medicaid-allowable transfer price must be generated either from second mortgage proceeds or contributed equity capital or both.

(iv) The annual amount of allowable interest expense incurred as described in this section, under the terms of the first and second mortgage, plus the annual principal debt amortization must be less than that which would otherwise be reimbursed pursuant to this section, if no assumption of the existing first mortgage were made. (This comparison is hereinafter referred to as the comparative analysis test.) For purposes of this subdivision, the loan-financed portion of the Medicaid-allowable transfer price shall be held constant and the comparative analysis test shall be applied to each year of the effective term of the first and second mortgages. In instances where more than one facility is involved in the transaction, the facilities may be combined for purposes of the comparative analysis test.

(2) Qualifying facilities shall be reimbursed principal debt amortization, interest and return of equity in the following manner:

(i) Principal debt amortization. In each year, during the effective term of the mortgage, the capital cost component of the rate shall include a payment factor sufficient to reimburse the principal debt amortization component of the allowable portion of the mortgage.

(ii) Interest. The capital cost component shall include a payment factor sufficient to reimburse interest associated with the allowable portion of the mortgage as defined by paragraph (e)(2) of this section.

(iii) Return of equity. The equity portion of the Medicaid-allowable transfer price shall be reimbursed in equal annual amounts beginning in the first year following the expiration of the term of the mortgages over the remaining useful facility life.
 

Effective Date: 
Tuesday, December 28, 1993
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Section 86-2.22 - Movable equipment

86-2.22 Moveable Equipment.

(a) Necessary and reasonable expenses related to movable equipment (depreciation computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years-digits method, interest on indebtedness, lease, etc.) are considered allowable costs for residential health care facilities subject to such ceilings as may be established and promulgated by the Commissioner of Health.

(b) An arms length lease purchase agreement with a nonrelated lessor involving equipment entered into on or after October 23, 1992 which meets any one of the four following conditions, establishes the lease as a virtual purchase.

(1) The lease transfers title of the equipment to the lessee during the lease term.

(2) The lease contains a bargain purchase option.

(3) The lease term is at least 75 percent of the useful life of the equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the equipment.

(4) The present value of the minimum lease payments (payments to be made during the lease term including bargain purchase option, guaranteed residual value and penalties for failure to renew) equals at least 90 percent of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the equipment. Present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case the interest rate implicit in the lease is used.

(c) If a lease is established as a virtual purchase under subdivision (b) of this section, the rental charge is includable in capital-related costs as the lesser of the annual rent or the annual costs of ownership which shall be limited to depreciation and interest. When the cost of ownership becomes less than the annual rent, the rental charge shall be includable in capital-related costs. The aggregate rental or lease costs included in capital-related costs may not exceed the costs of ownership that would have been included in capital-related costs over the useful life of the asset had the provider received legal title to the asset.

(d) If a facility enters into a sale and leaseback agreement involving equipment on or after October 23, 1992, the amounts to be included in capital-related costs are the lesser of the annual rent or the annual costs of ownership. When the cost of ownership becomes less than the annual rent, the rental charge shall be includable in capital-related costs. The aggregate rental or lease costs included in capital-related costs may not exceed the costs of ownership which shall be limited to depreciation and interest that would have been included in capital-related costs over the useful life of the asset had the provider retained legal title to the asset.
 

Effective Date: 
Monday, October 25, 1993
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Section 86-2.23 - Research

86-2.23 Research.

(a) All research costs shall be excluded from allowable costs in computing reimbursement rates.

(b) Research includes those studies and projects which have as their purpose the enlargement of general knowledge and understanding, are experimental in nature and hold no prospect of immediate benefit to the hospital or its patients.
 

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Section 86-2.24 - Educational activities

86-2.24 Educational activities.

The costs of educational activities, less tuition and supporting grants, shall be included in the calculation of the basic rate, provided such activities are directly related to patient care services.
 

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Section 86-2.25 - Compensation of operators or relatives of operators

86-2.25 Compensation of operators and relatives of operators.

(a) Reasonable compensation for operators or relatives of operators for services actually performed and required to be performed shall be considered as an allowable cost. The amount to be allowed shall be equal to the amount normally required to be paid for the same service provided by a nonrelated employee, as determined by the State Commissioner of Health. Compensation shall not be included in the rate computation for any services which the operator or relative of the operator is not authorized to perform under New York State law or regulation.

(b) Any amount reported as compensation for services rendered by an operator or relative of an operator shall not be allowed in excess of the maximum allowance for full-time services in carrying out his primary function.

(c) For purposes of subdivision (a) of this section, in determining a reasonable level of compensation for operators or relatives of operators the commissioner may consider the quality of care provided to patients by the facility during the year in question.
 

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Section 86-2.26 - Related organizations

86-2.26 Related organizations.

(a) A related organization shall be defined as any entity which the residential health care facility is in control of or is controlled by, either directly or indirectly, or an organization or institution whose actions or policies the facility has the power, directly or indirectly, to significantly influence or direct, or a special purpose organization, or where an association of material interest exists in an entity which supplies goods and/or services to the residential health care faculty, or any entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption.

(b) The costs of goods and/or services furnished to a residential health care facility by a related organization are includable in the computation of the basic rate at the lower of the cost to the related organization, or the market price of comparable goods and/or services available in the residential health care facility's region within the course of normal business operations.

(c) If the residential health care facility has incurred any costs in connection with a related organization, the final payment rate shall include the costs of such goods and/or services.

(d) A special purpose organization shall be defined as an organization which is established to conduct certain of the provider's patient-care-related or non-patient-care-related activities. The special purpose organization shall be considered to be related if:

(1) the facility controls the special purpose organization through contracts or other legal documents that allow direct authority over the organization's activities, management and policies; or

(2) the facility is, for all practical purposes, the sole beneficiary of the special organization's activities. The facility shall be considered the special purpose organization's sole beneficiary if one or more of the three following circumstances exist:

(i) a special purpose organization has solicited funds in the name of and with the expressed or implied approval of the facility, and substantially all the funds solicited by the organization were intended by the contributor or were otherwise required to be transferred to the facility or used at its discretion or direction;

(ii) the facility has transferred some of its resources to a special purpose organization, substantially all of whose resources are held for the benefit of the facility; or

(iii) the facility has assigned certain of its functions (such as the operation of a dormitory) to a special purpose organization that is operating primarily for the benefit of the facility.
 

Effective Date: 
Wednesday, March 11, 1992
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Section 86-2.27 - Termination of service

86-2.27 Termination of service.

The Division of Health Care Financing in the Department of Health shall be notified immediately of the deletion of any previously offered service or of the withholding of services from patients paid for by government agencies. Such notifications shall include a statement indicating the date of the deletion or withholding of such service and the cost impact on the residential health care facility of such action. Any overpayments by reason of such deletion of previously offered service shall bear interest and be subject to penalties both in the manner provided in section 88-2.7 of this Subpart.
 

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Section 86-2.28 - Return on investment

86-2.28 Return on investment.

(a) For rate year 1993, in computing the allowable cost of a proprietary residential health care facility, there will be included, after subtracting for current and noncurrent time deposits and equivalents, investments and construction in progress, a reasonable return on average equity capital invested for necessary and proper operation for patient care activities of a residential health care facility and related organizations, as defined in section 86-2.26(a) of this Subpart. For purposes of this section, average equity capital shall mean the difference between total assets less total liabilities averaged over the applicable cost report period, including assets and liabilities attributable to land, plant, fixed equipment and capital improvements thereto. It shall also include the average equity capital of related organizations proportionate with the percentage of a related organization's business with the residential health care facility, as calculated in the annual report forms filed in accordance with section 86-2.2 of this Subpart.

(b) The allowable average equity capital shall be further adjusted by subtracting the equity, as that term is defined in section 86-2.21(a)(4) of this Subpart, upon which a return is calculated pursuant to section 86-2.21(e)(6) of this Subpart. The return on investment for rate year January 1, 1993 shall be computed on the basis of allowable fiscal and statistical data submitted by the facility for the fiscal year ended December 31, 1991, or other applicable cost report period used to determine the capital component of the 1993 rate, in accordance with section 86-2.21 of this Subpart. The return on investment for subsequent rate years shall be based upon the annual cost report used by the department to determine the capital component of the rate in accordance with section 86-2.21 of this Subpart. The percentage to be used in computing the return on investment shall be equal to the twenty-six week United States Treasury Bill rate in effect on the second Wednesday of September of the year prior to the rate year.
 

Effective Date: 
Tuesday, December 28, 1993
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Section 86-2.29 - Payments to receivers

86-2.29 Payments to receivers.

(a) The commissioner may make noninterest-bearing payments to receivers, appointed pursuant to Public Health Law, section 2810, according to the terms set forth in this section and subject to the availability of moneys therefor.

(b) No such payments shall be made unless the commissioner reasonably anticipates that repayment shall be made prior to or upon termination of the receivership.

(c) Any such payment to a receiver shall be pursuant to a written agreement between such receiver and the commissioner. The amount of such payment shall not exceed the facility's anticipated Medicaid revenue for a four-week period. When the commissioner is the receiver, no written agreements shall be required, but the commissioner shall comply with all other provisions of this section.

(d) A receiver may request a payment upon a showing that:

(1) there is a need for such funds based on the financial condition of the facility;

(2) there are debts that were incurred prior to the receivership, which must be paid by the receiver to assure uninterrupted patient care; or

(3) funds are not otherwise available to correct serious or life-threatening structural deficiencies other than alterations prohibited in Public Health Law, section 2810(2)(c).

(e) The criteria to be considered in determining the reasonableness of anticipating repayment by a receiver of any payment made pursuant to this section shall be:

(1) assignment to the commissioner by the receiver of anticipated revenues not less than the amount of the payment, payable upon demand by the commissioner; and

(2) a signed confession of judgment by the receiver to the commissioner for the full amount of said payment.

(f) Repayment by a receiver of any payment made pursuant to this section shall be applied to reimburse any special revenue fund appropriations made for the purposes of this section and chapter 1021 of the Laws of 1981.
 

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Section 86-2.30 - Residential health care facilities patient assessment for certified rates

86-2.30 Residential health care facilities patient assessment for certified rates. (a) For the purpose of determining reimbursement rates effective January 1, 1986 and thereafter, for governmental payments, each residential health care facility shall, on an annual basis or more often as determined by the department pursuant to this Subpart, assess all patients to determine case mix intensity using the patient review criteria and standards promulgated and published by the department (Patient Review Instrument (PRI) and instructions: patient review instrument) and specified in subdivision (i) of this section.

(b)(1) The patient review form (PRI) shall be submitted according to a written schedule determined by the department. Such written schedule shall be established by the Commissioner of Health with notice to residential health care facilities. Extension of the time for filing may be granted upon application received prior to the due date of the patient review forms and only in circumstances where the residential health care facility establishes, by documentary evidence, that t he patient review forms cannot be submitted by the due date for reasons beyond the control of the facility.

(2) Rate schedules shall not be certified by the Commissioner of Health unless residential health care facilities are in full compliance with the requirements of this section. Compliance with the assessment requirements of this section shall include, but not be limited to, the timely filing of properly certified patient review forms (PRI) which are complete and accurate. Failure of a residential health care facility to file the patient review form (PRI) pursuant to the written schedule established pursuant to this subdivision, shall subject the residential health care facility to the provisions of section 86-2.2(c) of this Subpart.

(c) The operator of a residential health care facility shall ensure:

(1) that the patient review form (PRI) is completed for all patients of the facility pursuant to subdivision (a) of this section;

(2) that the patient review form (PRI) is completed by a registered professional nurse who is qualified by experience and demonstrated competency in long-term care and who has successfully completed a training program in patient case mix assessment approved by the department to train individuals in the completion of the patient review form (PRI) for the purposes of establishing a facility's case mix financial reimbursement; and

(3) that the patient review form (PRI) is certified by the operator and the nurse assessor responsible for completion of the patient review form (PRI). (The form of the certification required shall be as prescribed in the report form provided by the department.)

(d) In order to maximize reliability and accuracy, a limited number of personnel for each residential health care facility may be responsible for completion of the patient review form (PRI) during each assessment period. The maximum number of personnel which may be responsible in each residential health care facility is as follows:

Bed size of facility Number of responsible assessors
Under 100 Two
101 to 200 Three
201 to 300 Four
301 to 400 Five
401+ Five plus one additionalassessor for eachadditional 100 beds orpart thereof.

(e)(1) The department shall monitor and review each residential health care facility's performance of its patient assessment function as described in this section through the following activities which may include, but shall not be limited to:

(i) analysis of patient case mix profiles and statistical data;

(ii) review of information provided by the residential health care facility; and

(iii) on-site inspections.

(2) The purpose of the department's monitoring and review shall be to determine whether the residential health care facility is complying with the assessment requirements contained in this section.

(3) The patient review form (PRI) and any underlying books, records, and/or documentation which formed the basis for the completion of such form shall be subject to review by the department.

(4) The department shall acknowledge, in writing, receipt of the residential health care facilities patient review forms (PRI). In the event that any information or data that the facility has submitted is inaccurate or incorrect, the facility shall correct such information or data in the following manner: the facility shall submit to the department, within five days of receipt of the department's written acknowledgement provided for in this paragraph, such corrections on a form which meets the same certification requirements as the document being corrected. Once receipt of corrected data is acknowledged in writing by the department, a residential health care facility may not correct or amend the patient review form for (PRI) or submit any additional information for the assessment period. (5) The department, in order to ensure accuracy of the patient review form (PRI), may also conduct timely on-site observations and/or interviews of patients/residents and review of their medical records. When an additional on-site review is performed by the department as a result of controverted items found during the initial on-site review, the facility shall be afforded an on-site conference prior to the conclusion of such additional on-site review. Upon completion of a department on-site review pursuant to this subdivision, the department, in order to ensure accuracy of the patient review form (PRI), shall correct, where necessary, a residential health care facility's assessment of its patient case mix intensity. The department's on-site determination shall be considered final for purposes of assessing the residential health care facility's case mix intensity for that assessment period and notwithstanding section 86-2.14 of this Subpart, the residential health care facility may not correct or amend the patient review form (PRI) or submit any additional information after department reviewers have concluded the on-site review. The residential health care facility shall be notified in writing regarding the department determination of any controverted items.

(f)(1) If the department determines pursuant to this section, that a residential health care facility is not performing its case mix intensity assessment function in a timely and/or accurate manner, as required by subdivision (b) of this section, the department shall, in writing:

(i) notify the residential health care facility;

(ii) require the residential health care facility to perform its patient case mix assessment function through written agreement with a person or entity approved by the department for the completion of the patient review form (PRI) for the purpose of establishing a residential health care facilities case mix reimbursement; and

(iii) any patient case mix assessment performed pursuant to subparagraph (ii) of this paragraph shall also be subject to department monitoring and review pursuant to this section.

(2) The department shall determine that a residential health care facility is not performing its case mix intensity assessment function in an accurate manner where there exists inaccuracies in its case mix assessment which results in a statistically significant modification of the residential health care facility's reimbursement.

(3) The cost of written agreements required by paragraph (1) of this subdivision shall not be considered an allowable cost for determining reimbursement rates pursuant to this Subpart.

(4) Certification. Operators of residential health care facilities completing the department's patient review form (PRI) through written agreement with a department approved nonresidential health care facility person or entity shall have such form certified by such person or entity in lieu of a residential health care facility registered professional nurse as required by paragraph (c)(2) of this section.

(g) Reconsiderations. (1) Any residential health care facility after one year from the date it has been notified in writing by the department that it must enter into a written agreement pursuant to paragraph (f)(1) of this section, may request, in writing, that the department rescind its withdrawal of the residential health care facility's patient case mix assessment function.

(2) The department shall not rescind its withdrawal of a residential health care facility's patient case mix assessment function unless the residential health care facility satisfies the department that the residential health care facility has the capability to comply with the requirements of the department's patient case mix assessment process which shall include the capability to accurately complete the patient review form (PRI).

(3) The department shall give written notice of its decision and shall, if negative, give a statement of the reasons for its refusal to rescind its withdrawal of the residential health care facility's patient case mix assessment function.

(4) Any residential health care facility after six months from the date it recelves a written department decision pursuant to paragraph (3) of this subdivision, may again request in writing that the department rescind its withdrawal of the residential health care facility's patient case mix assessment function.

(h) Reserved

(i) Forms

(

NOTE :

For a copy of the PRI form contact the NYS Department of Health, Division of Health Care Financing, Bureau of Financial Management and Information Support, Empire State Plaza, Room 984, Albany, New York (518) 474-1673)

NEW YORK STATE DEPARTMENT OF HEALTH

DIVISION OF HEALTH CARE FINANCING

INSTRUCTIONS: PATIENT REVIEW INSTRUMENT (PRI)

GENERAL CONCEPTS

I. USING THESE INSTRUCTIONS: These instructions and the training manual should be read before completing the PRI. These instructions should be kept with the PRIs as they are being completed. FREQUENT REFERENCE TO THE INSTRUCTIONS WILL BE NEEDED TO COMPLETE THE PRI ACCURATELY.

2. ANSWER ALL QUESTIONS: Answer all questions using the numeric codes provided. DO NOT LEAVE ANY QUESTIONS TOTALLY BLANK. UNUSED BOXES FOR A QUESTION SHOULD REMAIN BLANK. For example, Medical Record Number should be entered: / /9 /6 /2 /1 /0 /. If there are unused boxes, they should be on the left side of the number as shown in the example.

3. QUALIFIERS: Many of the PRI questions contain multiple criteria which are labeled qualifiers. All qualifiers must be met for a question to be answered yes. These qualifiers take the following forms:

o TIME PERIOD - The time period for the questions is the past four weeks, unless stated otherwise. For patients who have been in the facility less than four weeks (that is, new admissions or readmissions), use the time from admission to PRI completion as the time frame.

o FREQUENCY - The frequency specifies how often something needs to occur to meet the qualifier. For example, respiratory care needs to occur daily for four weeks or the PRI cannot be checked for this patient as receiving this care.

o DOCUMENTATION - Some of the questions require specific medical record documentation to be present. Otherwise, the question cannot be answered Ayes@ for the patient.

o EXCLUSIONS - Some of the questions specifically state to omit certain types of care or behavior when answering the question. For example, inhalators are excluded from respiratory care.

4. ACTIVITIES OF DAILY LIVING: The approach to measuring ADLs is slightly different from the other PRI questions. Measure the ADLs according to how the activity was completed 60% or more of the time during the past four weeks. Read the specific instructions for ADLs to understand the CHANGED CONDITION RULE and other details. PERFORMANCE: Measure what the patient does, rather than what the patient might be capable of doing.

5. CORRECTIONS: Cross out any responses which you wish to change and re-enter clearly to the right of the original response. Example: /3/ 4.

6. Use pen, not pencil.

INSTRUCTIONS: PRI QUESTIONS

I. ADMINISTRATIVE DATA

1. OPERATING CERTIFICATE NUMBER: Enter the 8 character identifier (7 numbers followed by the letter "N') stated on the facility's operating certificate. The last character "N" indicates Nursing Facility.

2. SOCIAL SECURITY NUMBER: Your PRIs can not be processed unless this question is accurately entered. Do not leave this question blank, do not enter zero if there is no social security number. Only use the Social Security number that has been specifically designated for the patient and not the spouse of the patient. Only use the number that has been assigned by the federal Social Security Administration. If there is no such number for a patient, a NEW SYSTEM has been developed to enable all facilities in the State to assign a unique ID number to those patients without a Social Security number. If a patient was assigned a computer generated number by the Department, that number should no longer be used. If the patient has no Social Security number, use this method: Enter the first three (3) letters of the patient's last name (starting to the far left), and then enter the six digits of the patient's date of birth. Omit the century in the birth date, which will be either a "19" or "18" as in 1930 or 1896. As an example, if a patient named Cheryl Brant has no social security number and was born on May 8, 1913, you would enter:/B/R/A/0/5/0/8/1/3 on the PRI.

3. RESIDENT IS LOCATED: Former HRF Area or Former SNF Area. This question has been revised to reflect the Omnibus Budget Reconciliation Act of 1987 (OBRA '87). It is imperative that nursing facilities formerly deemed "dual level" complete this section properly.

4. PATIENT NAME: Enter the patient's name, last name first, in the boxes provided. Enter up to the first 10 letters of the patient's last name.

6. MEDICAL RECORD NUMBER: Enter the unique number assigned by the facility to identify each patient. It is not the Medicaid, Medicare or Social Security number unless that is the number used by the facility to identify each of its patients.

7 ROOM NUMBER: Enter the numbers and/or letters which identify the patient's room in the facility.

8. UNIT NUMBER: Enter the one or the two digit number (01-12) assigned by your facility to each nursing unit for the purpose of this data collection.

11. DATE OF INITIAL ADMISSION: Enter the month, day and year the patient (1) entered the present nursing facility. Use the date of the patient's first admission and not the most recent. If the patient were transferred from another facility, it would be an initial admission to your facility. As another example, consider a patient that was admitted to a hospital from your facility and subsequently loses bed hold. If this patient is eventually readmitted to your facility at the original level of care, use the original admission date to complete this item.

12. MEDICAID NUMBER: Enter these numbers if patient has the coverage available, whether

13. MEDICARE NUMBER: or not the coverage is being used. If not, enter only one zero in the

far right box.

14. PRIMARY PAYOR: Enter the one source of coverage which pays for most of the patient's current nursing home stay. Code "Other" only if the primary payor is not Medicaid or Medicare. (Do not code "Other" for a patient with Medicaid coverage supplemented by Medicare Part B Code Medicaid.) Medicaid pending is to be coded as "Medicaid", if there is no other primary coverage being used for the patient's present stay.

15A. REASON FOR PRI COMPLETION: Select the one reason why the PRI is being completed. Responses 3, 4, and 5 under Utilization Review have been eliminated.

REIMBURSEMENT ASSESSMENT CYCLE:

Indicate whether this assessment is being completed as a part of a full facility assessment or as part of a quality assessment cycle for new admissions only.

1. Biannual Full Facility Cycle - The data collection during which all the patients residing in the facility are assessed. These PRI assessments include patients who were assessed during your previous PRI data collection and any new admissions.

2. Quarterly New Admission Cycle - The "new admission only data collection," involving only patients who were not assessed at their present level of care during your previous full facility data collection are reviewed. This specific PRI data collection occurs three months after your full facility PRI data collection. A new admission may be a new patient from the hospital, community or another nursing facility; or was hospitalized during your previous full facility assessment (regardless of bedhold).

15B. WAS A PRI SUBMITTED BY YOUR FACILITY FOR THIS PATIENT DURING A PREVIOUS FULL FACILITY AND/OR NEW ADMIT CYCLE: Review your facility's records to determine whether a PRI for reimbursement purposes was ever completed for this patient.

II. MEDICAL EVENTS

16. DECUBITUS LEVEL: Enter the level of skin breakdown (located at pressure points) using the qualifiers stated below:

CLARIFICATION OF ADL RESPONSES

19. EATING:

#3 ARequires continual help...@ means that the patient requires a staff person=s continual presence and help for reasons such as: patient tends to choke, has a swallowing problem, is learning to feed self, or is quite confused and forgets to eat.

#5 "Tube or parenteral feeding..." means that all food and drink is given by nursing staff through the means specified.

20. MOBILITY:

#3 AWalks with constant supervision and/or assistance...@ may be required if the patient cannot maintain balance, has a history of falls, has stress fracture potential, or is relearning to ambulate.

21. TRANSFER: Exclude transfers to bath or toilet.

#4 "Requires two people..." may be required for reasons such as: the patient is obese, has contractures, has fractures (or stress fracture potential), has attached equipment that makes transfer difficult (for example, tubes). There must be a logical medical reason why the patient needs the help of two people to transfer.

#5 "Bedfast..." may refer to a patient with acute dehydration, severe decubitus, or terminal illness.

22. TOILETING:

Definition - INCONTINENT - 60% or more of the time the patient loses control of his/her bladder or bowel functions, with or without equipment.

#1 "Continent... Requires no or intermittent supervision" and #2 "... and/or assistance" can refer to the continent patient or the incontinent patient who needs no/little help with his/her toileting equipment (for example, catheter).

#3 "Continent...Requires constant supervision/total assistance... " refers to a patient who may not be able to balance him/herself and transfer, has contractures, has fracture, is confused or is on a rehabilitation program. In addition this level refers to the patient who needs constant help with elimination/incontinence appliances (for example, colostomy, ileostomy).

#4 "Incontinent... Does not use a bathroom" refers to the patient who does not go to a toilet room, but instead may use a bedpan or continence pads. This patient may be bed bound or mentally confused to the extent that a scheduled toileting program is not beneficial.

#5 "Incontinent... Taken to a Bathroom..." refers to a patient who is on a formal toileting schedule, as documented in the medical record. This patient may be on a formal bowel and bladder rehabilitation program to regain or maintain control, or the toileting pattern is known and it is better psychologically and physically for the patient to be taken to the toilet (for example, to prevent decubiti).

A patient may have different levels of toileting capacity for bowel and bladder function. To determine the level of such a patient, note that level four and five refer to incontinence of either bladder or bowel. Thus if a patient receives the type of care described in one of these levels for either type of incontinence, enter that level.

Example 1:

A Patient needs constant assistance with a catheter (level 3 ) and is incontinent of bowel and is taken to the bathroom every four hours (level 5). In this instance, enter level 5 on the PRI because he is receiving the type of care described in this question for bowel incontinence.

Example 2: The patient requires intermittent supervision for bowel function (level 2) and is taken to the toilet every two hours as part of a bladder rehabilitation program. Enter level 5, as the patient is receiving this type of care for bladder incontinence.

IV. BEHAVIORS - VERBAL DISRUPTION; PHYSICAL AGGRESSION; DISRUPTIVE, INFANTILE/SOCIALLY INAPPROPRIATE BEHAVIOR; AND HALLUCINATIONS

The following qualifiers must be met:

CLARIFICATION OF RESPONSES TO BEHAVIORAL QUESTIONS

23. VERBAL DISRUPTION: Exclude verbal outbursts/expressions/utterances which do not create disruption as defined by the PRI.

24. PHYSICAL AGGRESSION: Note that the definition states "with intent for injury."

25. DISRUPTIVE, INFANTILE OR SOCIALLY INAPPROPRIATE BEHAVIOR: Note that the definition states this behavior is physical and creates disruption.

EXCLUDE the following behaviors:

o Verbal outbursts

o Social withdrawal

o Hoarding

o Paranoia

26. HALLUCINATIONS: For a "YES" response, the hallucinations must occur at least once per week during the past four weeks, in addition to meeting the other qualifiers noted above for an active treatment plan and psychiatric assessment.

V. SPECIALIZED SERVICES

27. PHYSICAL AND OCCUPATIONAL THERAPIES:

o For each therapy these three types of information will be entered on the PRI; "Level", "Days" and "Time" (hour and minutes).

o For a patient not receiving a therapy at all, the "Level" will always be entered in the answer key as #1 ("does not receive"), the "Days" will be entered 0 (zero) and the "Time" will be 0 (zero).

o Use the chart on the following page to understand the qualifiers for each of the three types of information that will be entered. Whether a patient is receiving maintenance or restorative therapy will make a difference in terms of the qualifiers to be used.

SEE CHART THAT FOLLOWS FOR THE SPECIFIC QUALIFIERS.

29. MEDICATIONS

A. Monthly average number of all medications ordered: Enter the monthly average number of different medications for which physician orders were written over the course of the past six months. If the resident has been in the facility less than six months determine the monthly average number of medications ordered based on the number of months since admission. The average should include the total number of ordered medications whether or not they were administered: (PRN medications; injectables, ointments, creams, ophthalmics, short-term antibiotic regimens and over-the-counter medications, etc.)

B. Monthly average number of psychoactive medications ordered: Enter the monthly average number of psychoactive medications for which physician orders were written over the course of the past six months. If the resident has been in the facility less than six months, determine the monthly average of psychoactive medications ordered based on the number of months since admission. The average should include all ordered psychoactive medications whether or not they were actually administered.

A Apsychoactive@ mediation is defined as a medication that is intended to affect mental and/or physical processes, namely to sedate, stimulate, or otherwise change mood, thinking or behavior.

The following are classes of psychoactive medications with several examples listed in each:

VI. DIAGNOSIS

30. PRIMARY MEDICAL PROBLEM: Follow the guideline stated below when answering this question.

o NURSING TIME: The primary medical problem should be selected based on the condition that has created the most need for nursing time during the past four weeks. A review of the medical record for nursing and physician, nurse practitioner, or physician assistant notes during the past four weeks may be necessary.

o JUDGMENT: This decision may require the assessor to use her/his own professional judgment in deciding upon the primary problem.

o ICD-9 Refer to the ICD-9 Codes for Common Diagnoses attached at the end of these instructions for easy access to the most frequently used numbers. An ICD-9 code book containing the complete ICD-9 listing should be available in the nursing and/or medical records office of a facility.

o NO ICD-9 NUMBER: Enter A0" (zero) in the far right box if no ICD-9 number can be found for the patient=s primary problem (or if the patient does not have a primary medical problem). If you cannot locate the ICD-9 code for the primary medical problem, PRINT THE NAME OF THE PRIMARY MEDICAL PROBLEM in the space provided on the PRI.

o NOTE: If the patient has AIDS or HIV related illnesses, indicate this in Section II, Medical Events, Item 17F. Do not use AIDS or HIV specific ICD codes (042044). Instead, use the code of the specific problem requiring the most caregiver time. For example, for all patients for whom viral pneumonia (NOS) is the condition requiring the most caregiver time, enter 480.9. Do not enter 042.1 for patients with HIV infection.

31. QUALIFIED ASSESSOR NUMBER: The qualified assessor who is attesting to the accuracy of the assessment must sign the completed form and enter the assessor Identification Number which was assigned at an approved N.Y.S. Department of Health Training Program.

Since the PRI is completed and submitted for the purposes of a reimbursement assessment cycle, the certified assessor must have actually completed the patient assessment, utilizing medical records and/or observations or interviews of the patient. This should be indicated by checking the YES box.

38. RACE/ETHNIC GROUP:

The following definitions are to be utilized in determining race and ethnic groups:

1. WHITE: A person having origins in any of the original peoples of Europe, North Africa or the Middle East.

2. WHITE/HISPANIC: A person who meets the definition of both White and Hispanic (See Hispanic Below)

3. BLACK: A person having origins in any of the Black racial groups of Africa.

4. BLACK/HISPANIC: A person who meets the definition of both Black and Hispanic (see below).

5. ASIAN OR PACIFIC ISLANDER: A person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands. This includes, for example, China, Japan, Korea, the Philippine Islands and Samoa.

6. ASIAN or PACIFIC ISLAND/HISPANIC: A person who meets the definition of both Asian or

Pacific Islander and Hispanic (see below).

7. AMERICAN INDIAN or ALASKAN NATIVE: A person having origins in any of the original peoples of North American and who maintains tribal affiliation or community recognition.

8. AMERICAN INDIAN or ALASKAN NATIVE/HISPANIC: A person who meets the definition of both American Indian or Alaskan Native and Hispanic (see below).

9. OTHER: Other groups not included in previous categories.

HISPANIC: A person of Puerto Rican, Mexican, Cuban, Dominican, Central or South American, or other Spanish Culture or origins.

(j) Residential health care facilities shall submit the data contained in the PRI using an electronic medium including but not limited to magnetic computer tape, floppy disk or an electronic telecommunication system consistent with the technical specifications established by the department. (1) The electronically produced data shall be accompanied by a certification statement executed by the operator or a person authorized to sign on the operator's behalf in a format provided or approved by the department.

(2) Facilities shall have an additional ten days from the time specified pursuant to subdivision (b) of this section to file the required information.

(3) Adjustments to certified rates made pursuant to section 86-2.11 of this Subpart shall be certified by the Commissioner of Health within 90 days from the date upon which a facility's rate was last certified pursuant to this Subpart or within 90 days from the latest scheduled PRI submission date pursuant to section 86-2.11 of this Subpart, whichever is later. Such ninety day time frames shall not apply in any instance where a facility has been notified that its submitted PRI data is inaccurate or incorrect pursuant to paragraph (e)(4) of this section until such data has been corrected to the satisfaction of the commissioner, or if an additional on-site review has been deemed necessary pursuant to paragraph (e)(5) of this section.

Effective Date: 
Monday, July 17, 2000
Doc Status: 
Complete

Section 86-2.31 - Recalibration

86-2.31 Recalibration.

(a) For rate years 1989, 1990 and 1991, notwithstanding any other provision of this Subpart and subject to the provisions of paragraph (1) of this subdivision, payment rates shall be adjusted in accordance with this subdivision to reflect a percentage recalibration adjustment based on the change in each facility's case mix which has been determined by the department to be due to factors other than changes in patient population or condition. Such payment rate adjustments shall be implemented utilizing the direct component of facility rates for such rate years determined in accordance with sections 86-2.10 and 86-2.11 of this Subpart.

(1) The percentage recalibration adjustment provided for in this subdivision shall neither exceed 3.035% nor be less than 0%.

(2) The percentage recalibration adjustment shall be calculated as follows for each facility:

(i) A statewide distribution of patients in each patient classification group shall be determined by utilizing the patient data for the assessment of all patients obtained in the patient assessment period March 1, 1985 through September 30, 1985 (the 1985 period) conducted pursuant to section 86-2.30 of this Subpart.

(ii) The statewide distribution of patients in each patient classification group shall be further segregated by the following length of stay (LOS) groups:

(a) less than or equal to 90 days;

(b) greater than 90 days but less than or equal to 1 year;

(c) greater than 1 year but less than or equal to 2 years;

(d) greater than 2 years but less than or equal to 3 years;

(e) greater than 3 years but less than or equal to 4 years;

(f) greater than 4 years but less than or equal to 5 years; or

(g) greater than 5 years;

(iii) A statewide average initial case mix index for each LOS group for the 1985 period shall be calculated by multiplying the initial distribution of patients in each patient classification group within each LOS group times the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the total number of patients in all patient classification groups within each LOS group.

(iv) For each facility, a 1985 distribution of patients in each patient classification group and a 1985 distribution of patients by the LOS groups specified in subparagraph (ii) of this paragraph shall be determined by utilizing the patient data for the assessment of all patients obtained in the 1985 period, conducted pursuant to section 86-2.30 of this Subpart. In the event a facility commenced operations after the patient assessment period, March 1, 1985 through September 30, 1985 (the 1985 period) but prior to January 1, 1988, or if the facility has the lesser of ten cases or twenty percent of its patients in the distributions as determined in this subparagraph for the 1985 period, or if the facility had undergone the appointment of a receiver or the establishment of a new operator subsequent to the 1985 period but prior to January 1, 1988 and had filed a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which was used in the calculation of the payment rate, the distribution of patients to be used for the purposes of this subparagraph shall be that distribution pertaining to the earliest full patient assessment period conducted pursuant to section 86-2.30 of this Subpart subsequent to the 1985 period or subsequent to the effective date of the appointment of a receiver or the change in operator (the "substituted 1985 period"), and such distribution shall be deemed the facility's "substituted 1985 distribution" of patients for the calculations in subparagraphs (vi) and (vii) of this paragraph. For purposes of this subparagraph, the only patients to be included in the distributions shall be patients that have been identified by the department as also having been included in the patient assessment period July 1, 1988 through December 31, 1988.

(v) For each facility, a 1988 distribution of patients in each patient classification group and a 1988 distribution of patients by the LOS groups specified in subparagraph (ii) of this paragraph shall be determined by utilizing the patient data obtained in the patient assessment period July 1, 1988 through December 31, 1988. For purposes of this subparagraph, the only patients to be included in the distributions shall be patients that were admitted to the facility in which they are presently residing before October 1, 1985 and have been identified by the department as also having been included in the patient assessments during the 1985 period. In the event a facility commenced operations after the patient assessment period, March 1, 1985 through September 30, 1985 (the 1985 period) but prior to January 1, 1988, or if the facility had the lesser of ten cases or twenty percent of its patients in the distributions for the 1985 period as determined pursuant to subparagraph (iv) of this paragraph, or if the facility had undergone the appointment of a receiver or the establishment of a new operator subsequent to the 1985 period but prior to January 1, 1988 and had filed a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which was used in the calculation of the payment rate, the facility's substituted 1985 period, as defined in subparagraph (iv) of this paragraph, shall be used in lieu of the 1985 period for the purposes of this subparagraph, and the only patients to be included shall be patients that were admitted to the facility in which they are presently residing before the end date of the facility's substituted 1985 period and have been identified by the department as also having been included in the patient assessments during the substituted 1985 period. (vi) A percentage increase in case mix attributable to LOS shall, for each facility, be determined as follows:

(a) A 1985 aggregate case mix index shall be determined by multiplying the facility's 1985 distribution of patients, or a substituted 1985 distribution of patients where applicable, within each LOS group, determined pursuant to subparagraph (iv) of this paragraph by the statewide average initial case mix index for each LOS group for the 1985 period, as determined pursuant to subparagraph (iii) of this paragraph, and dividing the sum of the results by the facility's total number of patients in all LOS groups, as determined pursuant to subparagraph (iv) of this paragraph.

(b) A 1988 LOS adjusted case mix index shall be determined by multiplying the facility's 1988 distribution of patients within each LOS group determined pursuant to subparagraph (v) of this paragraph by the statewide average initial case mix index for each LOS group for the 1985 period, as determined pursuant to subparagraph (iii) of this paragraph, and dividing the sum of the results by the facility's total number of patients in all LOS groups, as determined pursuant to subparagraph (v) of this paragraph.

(c) The 1985 aggregate case mix index shall be subtracted from the 1988 LOS adjusted case mix index and the result divided by the 1985 aggregate case mix index to arrive at the percentage increase in case mix attributable to LOS.

(vii) An actual percentage increase in case mix shall, for each facility, be determined as follows:

(a) A 1985 actual case mix index shall be determined by multiplying the facility's 1985 distribution of patients, or a substituted 1985 distribution of patients where applicable, in each patient classification group, as determined pursuant to subparagraph (iv) of this paragraph, by the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the facility's total number of patients in all patient classification groups, as determined pursuant to subparagraph (iv) of this paragraph.

(b) A 1988 actual case mix index shall be determined by multiplying the facility's 1988 distribution of patients in each patient classification group, as determined pursuant to subparagraph (v) of this paragraph, by the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the facility's total number of patients in all patient classification groups, as determined pursuant to subparagraph (v) of this paragraph.

(c) The 1985 actual case mix index shall be subtracted from the 1988 actual case mix index and the result divided by the 1985 actual case mix index to arrive at an actual percentage increase in case mix.

(viii) Except as provided in subparagraph (ix) of this paragraph, a percentage recalibration adjustment shall be determined by annualizing the result obtained by subtracting the percentage increase in case mix attributable to LOS determined pursuant to subparagraph (vi) of this paragraph from the actual percentage increase in case mix determined pursuant to subparagraph (vii) of this paragraph.

(ix) If a facility had undergone the appointment of a receiver or the establishment of a new operator on or after January 1, 1988 but prior to January 1, 1992, and filed a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which was used in the calculation of a revised payment rate, or for new facilities who received an initial operating certificate on or after January 1, 1988 but prior to January 1, 1992, the percentage recalibration adjustment provided for in this subdivision shall be 0% for such revised rate or such new facilities.

(3) The operating portion of each residential health care facility's rate of payment, as defined pursuant to paragraph (7) of subdivision (a) of Section 86-2.10 of this Subpart, shall be reduced by a per diem recalibration adjustment which shall be determined as follows:

(i) The percentage recalibration adjustment identified in subparagraph (viii) of paragraph (2) of this subdivision shall be applied to the direct component of the rate determined in accordance with Sections 86-2.10 and 86-2.11 of this Subpart, to arrive at each facility's per diem recalibration adjustment in 1983 base year dollars.

(ii) Each facility's per diem recalibration adjustment in 1983 base year dollars shall then be trended to the rate year by the applicable roll factor as defined in paragraph (8) of subdivision (a) of Section 86-2.10 of this Subpart. (b) For rate years 1992 and thereafter, notwithstanding any other provision of this Subpart and subject to the provisions of paragraph (1) of this subdivision and subdivision (c) of this section, payment rates shall be adjusted in accordance with this subdivision to reflect a percentage recalibration adjustment based on the change in each facility's case mix which has been determined by the department to be due to factors other than changes in patient population or condition. Such payment rate adjustments shall be implemented utilizing the direct component of facility rates for such rate years determined in accordance with sections 86-2.10 and 86-2.11 of this Subpart.

(1) The percentage recalibration adjustment provided for in this subdivision shall not be less than 0% nor greater than one hundred fifty percent of the statewide weighted average percentage recalibration adjustment obtained by utilizing the facility-specific percentage recalibration adjustments as determined pursuant to this subdivision.

(2) The percentage recalibration adjustment shall be calculated as follows for each facility:

(i) A statewide distribution of patients in each patient classification group shall be determined by utilizing the patient data for the assessment of all patients obtained in the patient assessment period March 1, 1985 through September 30, 1985 (the 1985 period) conducted pursuant to section 86-2.30 of this Subpart.

(ii) The statewide distribution of patients in each patient classification group shall be further segregated by the following length of stay (LOS) groups:

(a) less than or equal to 90 days;

(b) greater than 90 days but less than or equal to 1 year;

(c) greater than 1 year but less than or equal to 2 years;

(d) greater than 2 years but less than or equal to 3 years;

(e) greater than 3 years but less than or equal to 4 years;

(f) greater than 4 years but less than or equal to 5 years; or

(g) greater than 5 years;

(iii) A statewide average initial case mix index for each LOS group for the 1985 period shall be calculated by multiplying the initial distribution of patients in each patient classification group within each LOS group times the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the total number of patients in all patient classification groups within each LOS group.

(iv) For each facility, a 1985 distribution of patients in each patient classification group and a 1985 distribution of patients by the LOS groups specified in subparagraph (ii) of this paragraph shall be determined by utilizing the patient data for the assessment of all patients obtained in the 1985 period, conducted pursuant to section 86-2.30 of this Subpart. In the event a facility commenced operations after the patient assessment period, March 1, 1985 through September 30, 1985 (the 1985 period) but prior to January 1, 1988, or if the facility has the lesser of ten cases or twenty percent of its patients in the distributions as determined in this subparagraph for the 1985 period, or if the facility had undergone the appointment of a receiver or the establishment of a new operator subsequent to the 1985 period but prior to January 1, 1988 and had filed a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which was used in the calculation of the payment rate, the distribution of patients to be used for the purposes of this subparagraph shall be that distribution pertaining to the earliest full patient assessment period conducted pursuant to section 86-2.30 of this Subpart subsequent to the 1985 period or subsequent to the effective date of the appointment of a receiver or the change in operator (the "substituted 1985 period"), and such distribution shall be deemed the facility's "substituted 1985 distribution" of patients for the calculations in subparagraphs (vi) and (vii) of this paragraph. For purposes of this subparagraph, the only patients to be included in the dist ributions shall be patients that have been identified by the department as also having been included in the patient assessment period July 1, 1988 through December 31, 1988.

(v) For each facility, a 1988 distribution of patients in each patient classification group and a 1988 distribution of patients by the LOS groups specified in subparagraph (ii) of this paragraph shall be determined by utilizing the patient data obtained in the patient assessment period July 1, 1988 through December 31, 1988. For purposes of this subparagraph, the only patients to be included in the distributions shall be patients that were admitted to the facility in which they are presently residing before October 1, 1985 and have been identified by the department as also having been included in the patient assessments during the 1985 period. In the event a facility commenced operations after the patient assessment period, March 1, 1985 through September 30, 1985 (the 1985 period) but prior to January 1, 1988, or if the facility had the lesser of ten cases or twenty percent of its patients in the distributions for the 1985 period as determined pursuant to subparagraph (iv) of this paragraph, or if the facility had undergone the appointment of a receiver or the establishment of a new operator subsequent to the 1985 period but prior to January 1, 1988 and had filed a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which was used in the calculation of the payment rate, the facility's substituted 1985 period, as defined in subparagraph (iv) of this paragraph, shall be used in lieu of the 1985 period for the purposes of this subparagraph, and the only patients to be included shall be patients that were admitted to the facility in which they are presently residing before the end date of the facility's substituted 1985 period and have been identified by the department as also having been included in the patient assessments during the substituted 1985 period. (vi) A percentage increase in case mix attributable to LOS shall, for each facility, be determined as follows:

(a) A 1985 aggregate case mix index shall be determined by multiplying the facility's 1985 distribution of patients, or a substituted 1985 distribution of patients where applicable, within each LOS group, determined pursuant to subparagraph (iv) of this paragraph by the statewide average initial case mix index for each LOS group for the 1985 period, as determined pursuant to subparagraph (iii) of this paragraph, and dividing the sum of the results by the facility's total number of patients in all LOS groups, as determined pursuant to subparagraph (iv) of this paragraph.

(b) A 1988 LOS adjusted case mix index shall be determined by multiplying the facility's 1988 distribution of patient within each LOS group determined pursuant to subparagraph (v) of this paragraph by the statewide average initial case mix index for each LOS group for the 1985 period, as determined pursuant to subparagraph (iii) of this paragraph, and dividing the sum of the results by the facility's total number of patients in all LOS groups, as determined pursuant to subparagraph (v) of this paragraph.

(c) The 1985 aggregate case mix index shall be subtracted from the 1988 LOS adjusted case mix index and the result divided by the 1985 aggregate case mix index to arrive at the percentage increase in case mix attributable to LOS.

(vii) An actual percentage increase in case mix shall, for each facility, be determined as follows:

(a) A 1985 actual case mix index shall be determined by multiplying the facility's 1985 distribution of patients, or a substituted 1985 distribution of patients where applicable, in each patient classification group as determined pursuant to subparagraph (iv) of this paragraph, by the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the facility's total number of patients in all patient classification groups, as determined pursuant to subparagraph (iv) of this paragraph.

(b) A 1988 actual case mix index shall be determined by multiplying the facility's 1988 distribution of patients in each patient classification group, as determined pursuant to subparagraph (v) of this paragraph, by the case mix index for each patient classification group as contained in Appendix 13-A herein and dividing the sum of the results by the facility's total number of patients in all patient classification groups, as determined pursuant to subparagraph (v) of this paragraph.

(c) The 1985 actual case mix index shall be subtracted from the 1988 actual case mix index and the result divided by the 1985 actual case mix index to arrive at an actual percentage increase in case mix.

(viii) Except as provided in subparagraph (ix) of this paragraph, a percentage recalibration adjustment shall be determined by annualizing the result obtained by subtracting the percentage increase in case mix attributable to LOS determined pursuant to subparagraph (vi) of this paragraph from the actual percentage increase in case mix determined pursuant to subparagraph (vii) of this paragraph.

(ix) If a facility undergoes the appointment of a receiver or the establishment of a new operator on or after January 1, 1992 and files a new cost report in accordance with the provisions of section 86-2.10(k) of this Subpart which is used in the calculation of a revised payment rate, or for new facilities who receive an initial operating certificate on or after January 1, 1992, the percentage recalibration adjustment provided for in this subdivision shall be 0% for such revised payment rate or for such new facilities.

(3) The operating portion of each residential health care facility's rate of payment, as defined pursuant to paragraph (7) of subdivision (a) of Section 86-2.10 of this Subpart, shall be reduced by a per diem recalibration adjustment which shall be determined as follows:

(i) The percentage recalibration adjustment identified in subparagraph (viii) of paragraph (2) of this subdivision shall be applied to the direct component of the rate determined in accordance with Sections 86-2.10 and 86-2.11 of this Subpart, to arrive at each facility's per diem recalibration adjustment in 1983 base year dollars.

(ii) Each facility's per diem recalibration adjustment in 1983 base year dollars shall then be trended to the rate year by the applicable roll factor as defined in paragraph (8) of subdivision (a) of Section 86-2.10 of this Subpart.

(c) For a residential health care facility receiving a percentage recalibration adjustment greater than zero percent, as determined in subdivision (b) of this section, the percentage recalibration adjustment may be modified as provided in this subdivision. (1) In order to be eligible for a modification, a facility shall meet all of the following conditions.

(i) A modification request shall be submitted by a facility as an appeal application and shall be submitted within the time limit set forth in section 86-2.13(a) of this Subpart.

(ii) A facility shall document that the percentage change in the facility's reported case mix index (CMI) from the annual rate period 1985 through 1988, such percentage reduced by the percentage recalibration adjustment as determined by subdivision (b) of this section, is at least ten percent. The percentage change in the facility's reported CMI, for purposes of this subparagraph, shall utilize the CMI calculated from the facility's patient data obtained during the patient assessment period, March 1, 1985 through September 30, 1985, to the patient assessment period July 1, 1988 through December 31, 1988, conducted pursuant to section 86-2.30 of this Subpart, and shall be calculated by subtracting from the reported 1988 CMI, the reported 1985 CMI and the result divided by the reported 1985 CMI.

(iii)(a) Except as provided in clause (b) of this subparagraph, a facility shall document that the percentage change in direct care cost over trend from the annual rate period 1985 through 1988, as defined by those cost centers listed in subdivision (c) of section 86-2.10 of this Subpart, is at least ten percent. The percentage change in direct care cost over trend for purposes of this subparagraph shall be calculated by subtracting from the 1988 annual reported direct care cost, the 1985 annual reported direct care cost trended to 1988 by the applicable trend factors promulgated by the department for 1986, 1987 and 1988, and the result divided by the trended 1985 direct care cost. The annual reported direct care costs for 1985 and 1988, for purposes of this subparagraph, shall be those which the facility has submitted using the result of the single step-down method of cost allocation as defined in section 451.29 of this Title.

(b) In the event a facility's facility-specific cost based direct price per day exceeds the facility-specific ceiling direct price per day, as determined pursuant to section 86-2.10(c)(4) of this Subpart, for the annual rate period 1988, such excess percentage shall be used to determine a credit to be added to the facility's percentage change in direct care cost over trend as determined in clause (a) of this subparagraph for the purposes of meeting the required percentage change in direct care cost over trend identified in clause (a) of this subparagraph. The amount of the credit shall be equal to such excess percentage if the facility documents that its percentage change in indirect care cost over trend from the annual rate period 1985 through 1988, as defined by those cost centers listed in subdivision (d) of section 86-2.10 of this Subpart, does not exceed its percentage change in direct care cost over trend for this period, as determined in clause (a) of this subparagraph, and if the facility cannot so document, the credit identified in this clause shall be reduced (but not be less than 0%) by the extent to which the percentage change in indirect care cost over trend exceeds the percentage change in direct care cost over trend. The percentage change in indirect care cost over trend for purposes of this subparagraph shall be calculated by subtracting from the 1988 annual reported indirect care cost, the 1985 annual reported indirect care cost trended to 1988 by the applicable trend factors promulgated by the department for 1986, 1987 and 1988, and the result divided by the trended 1985 indirect care cost. The annual reported indirect care costs for 1985 and 1988, for purposes of this subparagraph, shall be those which the facility has submitted using the result of the single step-down method of cost allocation as defined in section 451.29 of this Title.

(iv) Documentation shall be included in an appeal filed by the facility to the department that supports the reasons for the direct care cost increase which shall be based on increases in staffing levels and/or range and/or types of patient services. Increased direct care cost resulting solely from an increase in the bed complement of a facility shall not constitute sufficient justification for granting a modification pursuant to this subdivision.

(2) For a facility meeting all conditions specified in paragraph (1) of this subdivision, the modified percentage recalibration adjustment shall be determined as follows.

(i) The modification to the percentage recalibration adjustment shall be determined by annualizing the result obtained by subtracting the percentage change in the facility's reported CMI reduced by the percentage recalibration adjustment, as determined in subparagraph (ii) of paragraph (1) of this subdivision, from the percentage change in direct care cost over trend, as determined in subparagraph (iii) of paragraph (1) of this subdivision. (ii) The modified percentage recalibration adjustment shall be equal to the result obtained by subtracting the modification to the percentage recalibration adjustment, as determined in subparagraph (i) of this paragraph, from the percentage recalibration adjustment identified in subparagraph (viii) of paragraph (2) of subdivision (b) of this section.

(iii) The modified percentage recalibration adjustment, as determined in subparagraph (ii) of this paragraph, shall not be less than 0%.
 

Effective Date: 
Tuesday, December 17, 1991
Doc Status: 
Complete

Section 86-2.32 - Nurse aide competency exam

86-2.32 Nurse aide competency exam.

(a) Definitions. For purposes of this section, the following definitions shall apply:

(1) Rate shall mean the aggregate governmental payment to the facility per patient day as defined in section 86-2.8 of this Subpart.

(2) Nurse aide trainee shall mean a person as defined in section 414.1(b)(8) of this Title.

(3) Nurse aide shall mean a person as defined in section 414.1(b)(7) of this Title.

(4) Program coordinator shall mean a person as defined in section 414.1(b)(26) of this Title.

(5) Primary instructor shall mean a person as defined in section 414.1(b)(27) of this Title.

(6) Clinical skills evaluator shall mean a person as defined in section 414.1(b)(28) of this Title who is qualified to administer the clinical section of the nurse aide competency exam.

(7) The competency examination shall mean the clinical skills examination and the written or oral competency examination required of nurse aides by section 2803-j of the Public Health Law.

(b) For the rate period July 2, 1989 through June 30, 1990 an amount shall be added to each residential health care facility's rate to compensate facilities for the cost of the fees charged facilities for the nurse aide competency exam.

(c) The estimated initial amount added to each residential health care facility's rate shall be determined as follows:

(1) The percentage of the number of full time equivalent (FTE) nurse aides in each facility to the number of FTE nurse aides in all residential health care facilities shall be calculated.

(2) This percentage shall be applied to the estimated number of nurse aides working in all residential health care facilities.

(3) The product shall then be multiplied by the estimated cost of testing for each nurse aide.

(4) This amount shall be divided by the number of patient days in each residential health care facility, multiplied by two and then added to the residential health care facility's rate.

(d) The department shall determine the actual cost of the examination for each facility and adjust the estimated initial amount to the actual amount in a rate no later than July 1, 1990.

(e) The costs of the fees of the clinical skills evaluator and/or the program coordinator/primary instructor shall consist of the estimated training fee multiplied by three. Each residential health care facility shall receive this estimated amount in the manner described in paragraph (4) of subdivision (c) of this section and the actual amount shall be determined and the rate adjusted not later than July 1, 1990.
 

Effective Date: 
Tuesday, May 14, 1991
Doc Status: 
Complete

Section 86-2.33 - Dementia pilot demonstration projects

86-2.33 Dementia pilot demonstration projects.

(a) Payment rates shall be adjusted by the addition of a per diem amount as determined by the commissioner pursuant to this section for residential health care facilities participating in pilot demonstration projects for the development of additional knowledge and experience in the area of dementia care and to improve the quality and treatment of patients with dementia.

(b) The adjustment to payment rates provided for in this section shall be made for qualifying residential health care facilities (RHCF's) applying for and receiving the approval of the commissioner for participation in such projects. Acceptable uses of such adjustments shall include but shall not be limited to:

(1) increasing the availability of programs and resources for dementia patients;

(2) training staff to manage behavior or promote effective care of dementia patients;

(3) arranging the environment in ways that produce positive outcomes for dementia patients; and/or

(4) maintaining and promoting autonomy and decisionmaking on the part of dementia patients.

(c) Individual facilities or groups of facilities may participate in pilot demonstration projects pursuant to this subdivision.
 

Doc Status: 
Complete

Section 86-2.34 - Affiliation changes

86-2.34 Affiliation changes.

(a) A hospital-based residential health care facility as defined in section 86-2.10(a)(13) of this Subpart whose affiliated hospital closes its acute care beds shall notify the department within 30 days of actual complete closure of such beds. Such residential health care facility shall have its affiliation status changed to free-standing effective as of the date of actual complete closure.

(b) For purposes of establishing the allowable indirect component of the rate pursuant to subdivision (d) of section 86-2.10 of this Subpart, a hospital-based residential health care facility whose affiliation changes to free-standing under circumstances described in subdivision (a) of this section may apply to the department at the same time notice of closure is given pursuant to subdivision (a) of this section for a three year phase in of its free-standing affiliation for reimbursement purposes effective the beginning of the next calendar year following actual complete closure of its acute care beds.

(1) For the rate effective January 1 of the calendar year following actual complete closure of the affiliated hospital's acute care beds, the mean indirect price per day determined pursuant to section 86-2.10(d)(4)(i) of this Subpart shall be determined by summing the product of multiplying the mean indirect price per day of the appropriate hospital-based peer group by .75 and the product of multiplying the mean indirect price per day of the appropriate free-standing peer group by .25.

(2) For the rate effective January 1 of the second calendar year following actual complete closure of the affiliated hospital's acute care beds, the mean indirect price per day determined pursuant to section 86-2.10(d)(4)(i) of this Subpart shall be determined by summing the product of multiplying the mean indirect price per day of the appropriate hospital-based peer group by .50 and the product of multiplying the mean indirect price per day of the appropriate free-standing peer group by .50.

(3) For the rate effective January 1 of the third calendar year following actual complete closure of the affiliated hospital's acute care beds, the mean indirect price per day determined pursuant to section 86-2.10(d)(4)(i) of this Subpart shall be determined by summing the product of multiplying the mean indirect price per day of the appropriate hospital-based peer group by .25 and the product of multiplying the mean indirect price per day of the appropriate free-standing peer group by .75.

(c) For purposes of establishing the factor determined pursuant to section 86-2.12(a) of this Subpart, a hospital-based residential health care facility whose affiliation changes to free-standing under circumstances described in subdivision (a) of this section and has applied for a three-year phase-in of the free-standing indirect component pursuant to subdivision (b) of this section shall continue to be classified as hospital-based for a period of three calendar years following the actual complete closure of the affiliated hospital's acute care beds.

(d) A hospital-based residential health care facility whose affiliation changed to free-standing under the circumstances described in subdivision (a) of this section that fails to notify the department within 30 days from the date of actual complete closure of the acute care beds shall not be eligible for the provisions of subdivision (b) and subdivision (c) of this section. Such facilities shall be designated free-standing, for rate calculation purposes, pursuant to this Subpart retroactive to the date of actual complete closure of the acute care beds of the affiliated hospital.
 

Effective Date: 
Sunday, January 1, 1989
Doc Status: 
Complete

Section 86-2.36 - Scheduled short term care

86-2.36 Scheduled Short term care.

(a) Residential health care facilities which provide scheduled short term care for residents in accordance with Part 410 of this Title shall be paid a per diem rate of reimbursement for such services which is the average per diem rate of reimbursement for the facility as established pursuant to this Subpart.

(b) The requirements of Sections 86-2.11 and 86-2.30 relating to resident assessments and the submission of case mix information to the Department shall not apply to scheduled short term care in accordance with Part 410 of this Title.
 

Effective Date: 
Wednesday, November 20, 1991
Doc Status: 
Complete

Section 86-2.37 - Submission of resident assessments

86-2.37 Submission of resident assessments.

(a) Effective November 1, 1992 and thereafter, residential health care facilities shall submit to the department the data contained in the comprehensive assessment and review of assessments (quarterly reviews) required to be completed by facilities in accordance with section 415.11 of this Title and section 483.20 of 42 CFR, (Minimum Data Set Plus for Nursing Home Resident Assessment and Care Screening (MDS+)), using a telecommunications process based on electronic mail or if directed by the department, other electronic medium such as computer tape or floppy disc. This submission shall be made consistent with the department's data submission specifications for the MDS+ and shall use the department-provided submission preparation computer software when preparing the MDS+ data for transmission.

(1) Electronic submission of the MDS+ data shall occur no later than six weeks after the assessment start date which the facility indicates in section A of the MDS+ document.

(2) The electronic submissions shall include all assessments and quarterly reviews with an assessment start date of November 1, 1992 and thereafter, completed by the facilities in accordance with section 415.11 of this Title.

(b) Residential health care facilities shall reproduce the MDS+ Discharge Notification, supplied initially by the Department, in sufficient numbers and submit to the department the data contained therein for each resident when the resident is permanently discharged from the facility. The facility shall submit such data within four weeks of discharge using a telecommunications process based on electronic mail or, if directed by the department, other electronic medium such as computer tape or floppy disc.
 

Effective Date: 
Monday, December 20, 1993
Doc Status: 
Complete

Section 86-2.38 - Nursing home incentive payment

86-2.38 Nursing home incentive payment. (a) The commissioner shall make rate adjustments, subject to the availability of funds therefore, to certain residential health care facilities who demonstrate to the satisfaction of the commissioner that they can meet or exceed defined quality measures.

(b) Initial awards shall be based on a residential health care facility's performance for pressure ulcer quality of care for chronic care residents.

(c) The commissioner shall make two sets of awards as follows:

(1) An award shall be made for the best performers for the evaluation period;

(2) An award shall be made to residential health care facilities with the best improvement in pressure ulcer care between a base and evaluation period except that facilities in the bottom quarter percentile of all eligible residential health care facilities for this evaluation period shall not be eligible for such an award if, even after their improvement in pressure ulcer care, they still remain in the bottom quarter percentile of all eligible residential health care facilities; and

(3) Residential health care facilities that qualify are eligible to receive an award in both categories of awards.

(d)(1) The evaluation period for the award for best performers shall be January 1, 2007 through December 31, 2007.

(2) The base period for the award for best improvement shall be July 1, 2006 through June 30, 2007, which shall be compared to the period July 1, 2007 through June 30, 2008.

(e) The following factors shall be considered by the commissioner in making awards pursuant to this section:

(1) The quality measure of pressure ulcer care shall be risk adjusted using such patient health factors to include but not be limited to: coma, malnutrition, diseases and conditions related to pressure ulcer, low body mass index, and plegia (paraplegia or hemiplegia);

(2) Pressure ulcer rates shall be considered only for chronic care residential health care facility residents;

(3) In order to be eligible to be considered for a rate enhancement, a residential health care facility must have averaged more than one prevented pressure ulcer per quarter of the evaluation period identified in subdivision (d) of this section as calculated by comparing the actual number of residents with a pressure ulcer to the expected number of residents with a pressure ulcer, based on the facility's risk adjusted pressure ulcer rate developed pursuant to this subdivision; and

(4) Any residential health care facility receiving a written deficiency for substandard quality of care, as defined in federal regulation 42 C.F.R. §488. 301, during the evaluation periods contained in this section shall be excluded from receiving an award under this section.

(f) Rate adjustments made pursuant to this section for residential health care facilities receiving monetary awards shall be made based on the residential health care facility's percent of patient days of care attributable to patients eligible for medical assistance pursuant to title eleven of article five of the social services law.

(g) Residential health care facilities chosen to receive rate enhancements pursuant to this section shall, prior to the rate enhancement, inform the commissioner in writing as to their proposed use of the additional monies to further improve quality and care of patients in the residential health care facility.

Effective Date: 
Wednesday, April 23, 2008
Doc Status: 
Complete

Section 86-2.39 - Closures, mergers, acquisitions, consolidations and restructurings

86-2.39 Closures, mergers, acquisitions, consolidations and restructurings. (a) The commissioner may grant approval of a temporary adjustment to the non-capital components of rates calculated pursuant to this subpart for eligible residential health care facilities.

(b) Eligible facilities shall include:

(1) facilities undergoing closure;

(2) facilities impacted by the closure of other health care facilities;

(3) facilities subject to mergers, acquisitions, consolidations or restructuring; or

(4) facilities impacted by the merger, acquisition, consolidation or restructuring of other health care facilities.

(c) Facilities seeking rate adjustments under this section shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

(1) protect or enhance access to care;

(2) protect or enhance quality of care;

(3) improve the cost effectiveness of the delivery of health care services; or

(4) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

(d) (1) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this section shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the facility shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the facility's written proposal as approved by the commissioner and may also require that the facility submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the facility's temporary rate adjustment prior to the end of the specified timeframe.

(2) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

Effective Date: 
Tuesday, July 3, 2012
Doc Status: 
Complete

Section 86-2.35 - Reserved

Section 86-2.40 - Statewide prices for non-capital reimbursement.

86-2.40. Statewide prices for non-capital reimbursement. The non-capital cost components of residential health care facility ("facility") Medicaid rates for inpatient services for periods on and after January 1, 2012, shall be in accord with the following:

(a) "Specialty facilities" means those facilities or discrete units of facilities described in paragraph (c) of subdivision 2-c of section 2808 of the Public Health Law. Such facilities and such discrete units of facilities shall not be subject to the provisions of this section, other than subdivision (ad), and the costs and statistical data reported by such facilities and such discrete units of facilities shall not be included in the rate computations otherwise made pursuant to this section, and the term "facilities" as used in this section shall not be deemed to include such facilities.

(b) The operating component of rates shall be a price and shall consist of the sum of the direct, indirect and non-comparable price components.

(c) For purposes of calculating the direct and indirect price component of the rates, the following peer groups shall be established:

(1) all facilities;

(2) free-standing facilities with certified bed capacities of 300 beds or more and all hospital-based facilities as defined in 10 NYCRR 86-2.10(a)(13) ("HBF +300 bed"); and

(3) all free-standing facilities with certified bed capacities of less than 300 beds ("-300 bed").

(d) The direct component of the price shall consist of a blended rate, to be determined as follows:

(1) 50% of the direct price which shall be based upon allowable operating costs and statistical data for the direct component of the price as reported in each facility's cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days; and

(2) 50% of either:

(i) the direct price of HBF +300 bed facilities, which shall be based upon allowable operating costs and statistical data for the direct component of the price as reported by each hospital-based facility and each free-standing facility with certified bed capacity of 300 beds or more in its cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days, or

(ii) the direct price of -300 bed facilities, which shall be based upon allowable operating costs and statistical data for the direct component of the price as reported by each freestanding facility with certified bed capacity of less than 300 beds in its cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days.

(e) (1) The direct component of the price for each peer group shall be as follows:
 

Direct Component of the Price
Medicare Ineligible Price, Medicare Part D Eligible Price
(HBF +300 Bed Peer Group)
Effective Date of Prices
Direct Price

(a)

50% of Direct Price
(b)
Direct HBF +300 Bed
Price
(c)
50% of Direct HBF +300 Bed Price
(d)
Total Direct Component of Price for HBF +300 Bed Peer Group
(b)+(d)
January 1, 2012
$105.79
$52.90
$117.48
$58.74
$111.63
January 1, 2013
$111.82
$55.91
$124.17
$62.09
$117.99
January 1, 2014
$116.58
$58.29
$129.46
$64.73
$123.02
January 1, 2015
$117.94
$58.97
$130.97
$65.49
$124.46
January 1, 2016
$118.48
$59.24
$131.57
$65.79
$125.03
January 1, 2017
$119.02
$59.51
$132.17
$66.09
$125.59
Direct Component of the Price
Medicare Part B Eligible Price, Medicare Part B and Part D Eligible Price
(HBF +300 Bed Peer Group)
Effective Date of Prices
Direct Price
(a)
50% of Direct Price (b)
Direct HBF +300 Bed
Price (c)
50% of Direct HBF +300 Bed Price (d)
Total Direct Component of Price for HBF +300 Bed Peer Group (b)+(d)
January 1, 2012
$104.34
$52.17
$115.94
$57.97
$110.14
January 1, 2013
$110.28
$55.14
$122.54
$61.27
$116.41
January 1, 2014
$114.98
$57.49
$127.76
$63.88
$121.37
January 1, 2015
$116.33
$58.17
$129.25
$64.63
$122.79
January 1, 2016
$116.86
$58.43
$129.84
$64.92
$123.35
January 1, 2017
$117.39
$58.70
$130.43
$65.22
$123.91
 
     
    Direct Component of the Price
    Medicare Ineligible Price, Medicare Part D Eligible Price
    (-300 Bed Peer Group)
    Effective Date of Prices
    Direct Price
    (a)
    50% of Direct Price (b)
    Direct
    -300 Bed
    Price (c)
    50% of Direct -300 Bed Price (d)
    Total Direct Component of Price for -300 Bed Peer Group
    (b)+(d)
    January 1, 2012
    $105.79
    $52.90
    $99.30
    $49.65
    $102.54
    January 1, 2013
    $111.82
    $55.91
    $104.95
    $52.48
    $108.38
    January 1, 2014
    $116.58
    $58.29
    $109.43
    $54.72
    $113.00
    January 1, 2015
    $117.94
    $58.97
    $110.70
    $55.35
    $114.32
    January 1, 2016
    $118.48
    $59.24
    $111.21
    $55.61
    $114.85
    January 1, 2017
    $119.02
    $59.51
    $111.71
    $55.86
    $115.37
    Direct Component of the Price
    Medicare Part B Eligible Price, Medicare Part B and Part D Eligible Price
    (-300 Bed Peer Group)
    Effective Date of Prices
    Direct Price
    (a)
    50% of Direct Price (b)
    Direct
    -300 Bed
    Price (c)
    50% of Direct -300 Bed Price (d)
    Total Direct Component of Price for -300 Bed Peer Group (b)+(d)
    January 1, 2012
    $104.34
    $52.17
    $97.90
    $48.95
    $101.12
    January 1, 2013
    $110.28
    $55.14
    $103.47
    $51.74
    $106.88
    January 1, 2014
    $114.98
    $57.49
    $107.88
    $53.94
    $111.43
    January 1, 2015
    $116.33
    $58.17
    $109.14
    $54.57
    $112.73
    January 1, 2016
    $116.86
    $58.43
    $109.64
    $54.82
    $113.25
    January 1, 2017
    $117.39
    $58.70
    $110.14
    $55.07
    $113.76

     

    (2) As used in this subdivision, Medicare Ineligible Price shall mean the price applicable to Medicaid patients that are not Medicare eligible, Medicare Part B Eligible Price shall mean the price applicable to Medicaid patients that are Medicare Part B eligible, Medicare Part D Eligible Price shall mean the price applicable to Medicaid patients that are Medicare Part D eligible and Medicare Part B and Part D Eligible Price shall mean the price applicable to Medicaid patients that are Medicare Part B and Part D Eligible.

    (3) Subsequent revisions to the peer group prices set forth in paragraph (1) of this subdivision shall be published on the New York State Department of Health website at:

    http://www.health.ny.gov

     

    (f) The allowable costs percent reduction for the direct component shall be as follows:

     

    Effective Date
    Allowable Cost Percent Reduction
    January 1, 2012
    19.545660%
    January 1, 2013
    14.963800%
    January 1, 2014
    11.339480%
    January 1, 2015
    10.305120%
    January 1, 2016
    9.893250%
    January 1, 2017
    9.485290%

     

    Subsequent revisions to the allowable costs percent reduction shall be published on the New York State Department of Health website at:

    http://www.health.ny.gov/

    (g) Allowable costs for the direct component of the rate shall include costs reported in the following functional cost centers on the facility's 2007 cost report (RHCF-4), or extracted from a hospital-based facility’s 2007 cost report (RHCF-2) and the institutional cost report of its related hospital, from available certified cost reports as determined by the Commissioner, after first deducting costs attributable to specialty units, and the hospital by applying appropriate trace back percentages; and capital costs:

    (1) nursing administration (013);

    (2) activities program (014);

    (3) social services (021);

    (4) transportation (022);

    (5) physical therapy (039) (including associated overhead);

    (6) occupational therapy (040) (including associated overhead);

    (7) speech/hearing therapy (041) (Speech therapy portion only including associated overhead);

    (8) central service supply (043);

    (9) residential health care facility (051); and

    (10) pharmacy (042)(excluding costs allocated to non-comparables).

    (h) The direct component of the price shall be adjusted by a wage equalization factor (WEF). The WEF adjustment shall be calculated using cost and statistical data reported in each facility's 2009 cost report ((RHCF-4), or extracted from a hospital-based facility's 2009 cost report (RHCF-2) and the institutional cost report of its related hospital as applicable), from available certified cost reports as determined by the Commissioner, subject to applicable trace back percentages. The WEF adjustment shall consist of 50% of a Facility Specific Direct WEF and 50% of a Regional Direct WEF.

    (i) The Facility Specific Direct WEF shall be calculated as follows:

    1÷ (( Facility Specific Wage Ratio÷ Wage Index) + Facility Specific Non-Wage Ratio)

    (1) The Facility Specific Wage Ratio shall be calculated by dividing facility-specific total salaries and fringes related to direct cost centers for nursing administration (013), activities program (014), social services (021), transportation (022), physical therapy (039), occupational therapy (040), speech/hearing therapy (041), pharmacy (042), central service supply (043), and residential health care facility (051) by total direct operating expenses from such cost centers.

    (2) The Wage Index shall be calculated by dividing facility specific labor costs per hour by labor costs per hour for RNs, LPNs, aides and orderlies, therapists and therapist aides for all facilities from cost centers physical therapy (039), occupational therapy (040), speech/hearing therapy (041) and residential health care facility (051).

    (3) The Facility Specific Non-Wage Ratio shall be calculated by subtracting from 1 the Facility Specific Wage Ratio.

    (j) A Regional Direct WEF shall be calculated for each of the following 16 regions. The county geographic boundaries shall be the sole factor considered in determining which WEF region a facility is located in.

    (1) Albany Region, consisting of the counties of Albany, Columbia, Fulton, Greene, Montgomery, Rensselaer, Saratoga, Schenectady and Schoharie.

    (2) Binghamton Region, consisting of the counties of Broome and Tioga.

    (3) Central Rural Region, consisting of the counties of Cayuga, Cortland, Seneca, Tompkins and Yates.

    (4) Elmira Region, consisting of the counties of Chemung, Schuyler and Steuben.

    (5) Erie Region, consisting of the counties of Cattaraugus, Chautaugua, Erie, Niagara and Orleans.

    (6) Glens Falls Region, consisting of the counties of Essex, Warren and Washington.

    (7) Long Island Region, consisting of the counties of Nassau and Suffolk.

    (8) New York City Region, consisting of the counties of Bronx, Kings, New York, Queens and Richmond.

    (9) Northern Rural Region, consisting of the counties of Clinton, Franklin, Hamilton and St. Lawrence.

    (10) Orange Region, consisting of the counties of Chenango, Delaware, Orange, Otsego, Sullivan and Ulster.

    (11) Poughkeepsie Region, consisting of the counties of Dutchess and Putnam.

    (12) Rochester Region, consisting of the counties of Livingston, Monroe, Ontario and Wayne.

    (13) Syracuse Region, consisting of the counties of Madison and Onondaga.

    (14) Utica Region, consisting of the counties of Herkimer, Jefferson, Lewis, Oneida and Oswego.

    (15) Westchester Region, consisting of the counties of Rockland and Westchester.

    (16) Western Rural Region, consisting of the counties of Allegany, Genesee and Wyoming.

    (k) The Regional Direct WEF shall be calculated for each of the 16 regions as follows:

    1÷((Regional Wage Ratio÷Regional Wage Index)+ Regional Non-Wage Ratio)

    (1) The Regional Wage Ratio shall be calculated by dividing total salaries and fringes related to direct costs in the Region from cost centers for nursing administration (013), Activities Program (014), social services (021), transportation (022), physical therapy (039), occupational therapy (040), speech/hearing therapy(041), pharmacy (42), central service supply (043), and residential health care facility (051) by total direct operating expenses in the Region from such cost centers.

    (2) The Regional Wage Index shall be calculated by dividing labor costs per hour in the region by labor costs per hour for RNs, LPNs, aides and orderlies, therapists and therapist aides for all facilities from cost centers physical therapy (039), occupational therapy (040), speech/hearing therapy (041) and residential health care facility (051).

    (3) The Regional Non-Wage Ratio shall be calculated by subtracting from 1 the Regional Wage Ratio.

    (l) The Direct WEF adjustment to the direct component of the price for facilities for which 2009 cost report data is unavailable or insufficient to calculate the WEF as described in this section shall be equal to 100% of the applicable Regional WEF.

    (m) The direct component of the price shall be subject to a case mix adjustment in accordance with the following:

    (1) The application of the relative Resource Utilization Groups System (RUGS-III) as published by the Centers for Medicare and Medicaid Services and revised to reflect New York State wage and fringe benefits, and based on Medicaid only patient data.

    (2) New York State wages shall be used to determine the weight of each RUG. The cost for each RUG shall be calculated using the relative resources for registered nurses, licensed practical nurses, aides, therapists, and therapy aides and the 1995-97 federal time study. The minutes from the federal time study shall be multiplied by the New York average dollar per hour to determine the fiscal resources need to care for that patient type. This amount shall be multiplied by the number of patients in that RUG. RUG weights shall be assigned based on the distance from the Statewide average. The RUGS III weights shall be increased by the following amounts for the following categories of residents:

    (i) thirty minutes of certified nurse aide time for the impaired cognition A category;

    (ii) forty minutes of certified nurse aide time for the impaired cognition B category; and

    (iii) twenty-five minutes of certified nurse aide time for the reduced physical functions B category.

    (3) The case mix adjustment for the direct component of the price effective January 1, 2012 shall be calculated by dividing the Medicaid only case mix calculated using data for January 2011 by the all-payer case mix for the base year 2007.

    (4) The all payer case mix for base year 2007 shall be a blend of:

    (i) 50% of the case mix for all facilities, and

    (ii) 50% of the case mix for either:

    (a) free-standing facilities with certified bed capacities of 300 beds or more and all hospital-based facilities or

    (b) all free-standing facilities with certified bed capacities of less than 300 beds.

    (5) the Medicaid only case mix shall mean the case mix for patients where Medicaid is the primary payer.

    (6) Subsequent case mix adjustments to the direct component of the price for rate periods effective after January 1, 2012 shall be made in July and January of each calendar year and shall use Medicaid-only case mix data applicable to the previous case mix period.

    (7) Case mix adjustments to the direct component of the price for facilities for which facility specific case mix data is unavailable or insufficient shall be equal to the base year case mix of the peer group applicable to such facility.

    (8) The adjustments and related patient classifications for each facility shall be subject to audit review by the Office of the Medicaid Inspector General.

    (9) The operator of a proprietary facility, an officer of a voluntary facility, or the public official responsible for the operation of a public facility shall submit to the Department a written certification, in a form as determined by the Department, attesting that all of the "minimum data set" ("MDS") data reported by the facility for each census roster submitted to the Department is complete and accurate.

    (10) In the event the MDS data reported by a facility results in a percentage change in the facility's case mix index of more than five percent, then the impact of the payment of the Medicaid rate adjustment attributable to such a change in the reported case mix may be limited to reflect no more than a five percent change in such reported data, pending a prepayment audit of such reported MDS data, provided, however, that nothing in this paragraph shall prevent or restrict post-payment audits of such data as otherwise provided for in this subdivision.

    (n) The indirect component of the price shall consist of a blended rate to be determined as follows:

    (1) 50% indirect price which shall be based upon allowable operating costs and statistical data for the indirect component of the price as reported in each facility's cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days; and

    (2) 50% of either:

    (i) The indirect HBF +300 bed facility price which shall be based upon allowable operating costs and statistical data for the indirect component of the price as reported by each hospital-based facility and each free-standing facility with certified bed capacity of 300 beds or more in its cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days; or

    (ii) The indirect -300 bed facility price which shall be based upon allowable operating costs and statistical data for the indirect component of the price as reported by each freestanding facility with certified bed capacity of less than 300 beds in its cost report for the 2007 calendar year, reduced by the allowable costs percent reduction, and divided by total 2007 patient days

     

    (o)(1) The indirect component of the price for each peer group shall be as follows:

     

    Indirect Component of the Price (HBF +300 Bed Peer Group)
    Effective Date of Prices
    Indirect Price
    (a)
    50% of Indirect Price
    (b)
    Indirect HBF +300 Bed Price
    (c)
    50% of Indirect HBF +300 Bed Price
    (d)
    Total Indirect Component of Price for HBF +300 Bed Peer Group
    (b)+(d)
    January 1, 2012
    $53.15
    $26.58
    $61.54
    $30.77
    $57.35
    January 1, 2013
    $56.18
    $28.09
    $65.04
    $32.52
    $60.61
    January 1, 2014
    $58.57
    $29.29
    $67.82
    $33.91
    $63.19
    January 1, 2015
    $59.26
    $29.63
    $68.61
    $34.31
    $63.93
    January 1, 2016
    $59.53
    $29.77
    $68.92
    $34.46
    $64.23
    January 1, 2017
    $59.80
    $29.90
    $69.23
    $34.62
    $64.52
    Indirect Component of the Price
    (-300 Bed Peer Group)
    Effective Date of Prices
    Indirect Price
    (a)
    50% of Indirect Price (b)
    Indirect -300 Bed Price
    (c)
    50% of Indirect -300 Bed Price
    (d)
    Total Indirect Component of Price for -300 Bed Peer Group (b)+(d)
    January 1, 2012
    $53.15
    $26.58
    $48.49
    $24.25
    $50.82
    January 1, 2013
    $56.18
    $28.09
    $51.25
    $25.63
    $53.71
    January 1, 2014
    $58.57
    $29.29
    $53.44
    $26.72
    $56.00
    January 1, 2015
    $59.26
    $29.63
    $54.06
    $27.03
    $56.66
    January 1, 2016
    $59.53
    $29.77
    $54.31
    $27.16
    $56.92
    January 1, 2017
    $59.80
    $29.90
    $54.55
    $27.28
    $57.18

     

    (2) Subsequent revisions to the prices set forth in paragraph (1) of this subdivision shall be published on the New York State Department of Health website at:

    http://www.health.ny.gov

    (p) The allowable costs percent reduction for the indirect component shall be as follows:

     

    Effective Date
    Allowable Cost Percent Reduction
    January 1, 2012
    19.545660%
    January 1, 2013
    14.963800%
    January 1, 2014
    11.339480%
    January 1, 2015
    10.305120%
    January 1, 2016
    9.893250%
    January 1, 2017
    9.485290%

     

    Subsequent revisions to the allowable costs percent reduction shall be published on the New York State Department of Health website at:

    http://www.health.ny.gov/

    (q) Allowable costs for the indirect component of the rate shall include costs reported in the following functional cost centers on the facility's 2007 cost report (RHCF-4), or extracted from a hospital-based facility's 2007 cost report (RHCF-2) and the institutional cost report of its related hospital, from available certified cost reports as determined by the Commissioner, after first deducting costs attributable to specialty units, and the hospital by applying appropriate trace back percentages; and capital costs:

    (1) fiscal services (004);

    (2) administrative services (005);

    (3) plant operations and maintenance (006) (with the exception of utilities and real estate and occupancy taxes);

    (4) grounds (007);

    (5) security (008);

    (6) laundry and linen (009);

    (7) housekeeping (010);

    (8) patient food services (011);

    (9) cafeteria (012);

    (10) non-physician education (015);

    (11) medical education (016);

    (12) housing (018); and

    (13) medical records (019).

    (r) The indirect component of the price shall be adjusted by a Wage Equalization Factor (WEF). The WEF adjustment shall be calculated using cost and statistical data reported in each facility's 2009 cost report ((RHCF-4), or extracted from a hospital-based facility's 2009 costs report (RHCF-2) and the institutional cost report of its related hospital as applicable from available certified cost reports as determined by the Commissioner, subject to applicable trace back percentages. The WEF adjustment shall consist of 50% of a Facility Specific Indirect WEF and 50% of a Regional Indirect WEF.

    (s) The Facility Specific Indirect WEF shall be calculated as follows:

    1÷(( Facility Specific Wage Ratio÷Wage Index)+ Facility Specific Non-Wage Ratio)

    (1) The Facility Specific Wage Ratio shall be calculated by dividing facility-specific total salaries and fringes related to indirect cost centers for fiscal services (004), administrative services (005), plant operation and maintenance (006), grounds (007), security (008), laundry and linen (009), housekeeping (010), patient food service (011), cafeteria (012), non-physician education (015), medical education (016), housing (018), and medical records (019), by total indirect operating expenses for such cost centers.

    (2) The Wage Index shall be calculated by dividing facility specific labor costs per hour by labor costs per hour for RNs, LPNs, aides and orderlies, therapists and therapist aides for all facilities from cost centers physical therapy (039), occupational therapy (040), speech/hearing (041) and residential health care facility (051).

    (3) The Facility Specific Non-Wage Ratio shall be calculated by subtracting from 1 the Facility Specific Wage Ratio.

    (t) A Regional Indirect WEF shall be calculated for each of the following 16 regions. The county geographic boundaries shall be the sole factor considered in determining which WEF region a facility is located in.

    (1) Albany Region, consisting of the counties of Albany, Columbia, Fulton, Greene, Montgomery, Rensselaer, Saratoga, Schenectady and Schoharie.

    (2) Binghamton Region, consisting of the counties of Broome and Tioga.

    (3) Central Rural Region, consisting of the counties of Cayuga, Cortland, Seneca, Tompkins and Yates.

    (4) Elmira Region, consisting of the counties of Chemung, Schuyler and Steuben.

    (5) Erie Region, consisting of the counties of Cattaraugus, Chautaugua, Erie, Niagara and Orleans.

    (6) Glens Falls Region, consisting of the counties of Essex, Warren and Washington.

    (7) Long Island Region, consisting of the counties of Nassau and Suffolk.

    (8) New York City Region, consisting of the counties of Bronx, Kings, New York, Queens and Richmond.

    (9) Northern Rural Region, consisting of the counties of Clinton, Franklin, Hamilton and St. Lawrence.

    (10) Orange Region, consisting of the counties of Chenango, Delaware, Orange, Otsego, Sullivan and Ulster.

    (11) Poughkeepsie Region, consisting of the counties of Dutchess and Putnam.

    (12) Rochester Region, consisting of the counties of Livingston, Monroe, Ontario and Wayne.

    (13) Syracuse Region, consisting of the counties of Madison and Onondaga.

    (14) Utica Region, consisting of the counties of Herkimer, Jefferson, Lewis, Oneida and Oswego.

    (15) Westchester Region, consisting of the counties of Rockland and Westchester.

    (16) Western Rural Region, consisting of the counties of Allegany, Genesee and Wyoming.

    (u) The Regional Indirect WEF shall be calculated for each of the 16 regions, calculated as follows:

    1÷((Regional Wage Ratio÷Region Wage Index)+ Regional Non-Wage Ratio)

    (1) The Regional Indirect Wage Ratio shall be calculated by dividing total salaries and fringes related to indirect cost centers in each Region from cost centers for fiscal services (004), administrative services (005), plant operation and maintenance (006), grounds (007), security (008), laundry and linen (009), housekeeping (010), patient food service (011), cafeteria (012), non-physician education (015), medical education (016), housing (018), and medical records (019) for such indirect cost centers, by total indirect operating expenses in the Region for such cost centers.

    (2) The Regional Wage Index shall be calculated by dividing labor costs per hour in the Region by labor costs per hour for RNs, LPNs, aides and orderlies, therapists and therapist aides for all facilities from cost centers physical therapy (039), occupational therapy (040), speech/hearing therapy (041) and residential health care facility (051).

    (3) The Regional Non-Wage Ratio shall be calculated by subtracting from 1 the Regional Wage Ratio.

    (v) The Indirect WEF adjustment to the indirect component of the price for facilities for which 2009 cost report data is unavailable or insufficient to calculate the WEF as described above will be equal to 100% of the applicable regional WEF.

    (w) The non- comparable component of the price shall be calculated using allowable operating costs and statistical data as reported in each facility's cost report for the 2007 calendar year, or from otherwise available certified cost reports as determined by the Commissioner, divided by total 2007 patient days, or divided by patient days derived from otherwise available certified cost reports as determined by the Commissioner.

    (x) Allowable costs for the non-comparable component of the price shall include costs reported in the following functional cost centers on the facility's annual cost report (RHCF-4), or extracted from a hospital-based facility's annual costs report (RHCF-2) and the institutional cost report of its related hospital, or from otherwise available certified cost reports as determined by the Commissioner, after first deducting costs attributable to specialty units, and the hospital by applying appropriate trace back percentages; and capital costs:

    (1) Laboratory services (031);

    (2) ECG (032);

    (3) EEG (033);

    (4) Radiology (034);

    (5) Inhalation therapy (035);

    (6) Podiatry (036);

    (7) Dental (037);

    (8) Psychiatric (038);

    (9) Speech and hearing therapy (041) (hearing therapy only, including associated overhead);

    (10) Medical directors office (017);

    (11) Medical staff services (044);

    (12) Utilization review (020);

    (13) Other ancillary services (045, 046, 047);

    (14) Costs of utilities associated with plant operations and maintenance; and

    (15) Pharmacy costs pertaining to administrative overhead and costs of non-prescription drugs and supplies.

    (y) The non-comparable component of the price for facilities for which 2007 cost report data is unavailable or insufficient to calculate the non-comparable component as described in this section shall initially receive a noncomparable rate which is calculated using the most recently available certified cost report, as determined by the Commissioner, and if no such report is available, the regional average shall be utilized until such time as a certified cost report is available.

    (z) Per diem adjustments for certain patients. If applicable, and as updated pursuant to case mix adjustments made pursuant to paragraph (m) of this section, the operating component of the facility's price shall be adjusted to reflect the following:

    (1) A per diem add-on in the amount of $8 for each patient that, (i) qualifies under both the RUG-III impaired cognition and the behavioral problems categories, or (ii) has been diagnosed with Alzheimer's disease or dementia, is classified in the reduced physical functions A, B, or C or in behavioral problems A or B categories, and has an activities of daily living index score of ten or less.

    (2) A per diem add-on in the amount of $17 for each patient whose body mass index is greater than thirty-five.

    (3) A per diem add-on in the amount of $36 for each patient requiring extended care for traumatic brain injury.

    (4) Effective for services provided on and after June 1, 2012, rates of payment for residential health care facilities which have received approval by the Commissioner of Health to provide services to more than 25 patients whose medical condition is HIV Infection Symptomatic, and the facility is not eligible for separate and distinct payment rates for AIDS facilities or discrete AIDS units, shall be adjusted by a per diem adjustment that shall not be in excess of the difference between such facility's 2010 allowable operating cost per day, as determined by the Commissioner, and the weighted average non-capital component of the rate in effect on and after January 1, 2012, and as subsequently updated by case mix adjustments made in July and January of each calendar year as described in paragraph (m) of this section.

    (aa) For the calendar year 2012, the operating component of the price of each facility that fails to submit to the Department data or reports on quality measures, as required and defined by regulation, shall be subject to a per diem reduction calculated by multiplying 50 million dollars by each facility's share of Medicaid days. Facilities determined by the Department to be subject to this adjustment may request an expedited administrative hearing with regard to such adjustment, provided, however, that such adjustment shall not be held in abeyance pending the completion of such a hearing.

    (ab) Per diem transition adjustments. Over the five year period beginning January 1, 2012 and ending December 31, 2016, facilities shall be eligible for per diem transition rate adjustment, to be calculated as follows:

    (1)(i) In each year for each eligible facility computations shall be made by the Department pursuant to subparagraphs (ii) and (iii) of this paragraph and per diem rate adjustments shall be made for each year such that the difference between such computations for each year is no greater than the percentage, as identified in subparagraph (iv) of this paragraph, of the total Medicaid revenue received from the facility's July 7, 2011 non-capital rate as communicated to facilities by the Department in the letter dated November 9, 2011, and deemed not subject to subsequent reconciliation or adjustment, provided, however, that those facilities which are, subsequent to November 9, 2011, issued a revised non-capital rate for rate periods including July 7, 2011, reflecting a new base year that is subsequent to 2002, shall have such revised non-capital rate as in effect on July 7, 2011 utilized for the purpose of computing transition adjustments pursuant to this subdivision.

    (ii) A facility's Medicaid revenue, calculated by summing the direct component, indirect component, non-comparable components of the price in effect for each eligible facility on January 1, 2012, and multiplying such total by the facility's 2010 Medicaid days or the most recently available Medicaid days as of October 24, 2011 as determined by the Commissioner.

    (iii) A facility's Medicaid revenue calculated by multiplying the facility's July 7, 2011 rate (as determined in accordance with the provisions of subparagraph (i) of this paragraph) by the facility's 2010 Medicaid days or the most recently available Medicaid days as of October 24, 2011 as determined by the Commissioner and deemed not subject to subsequent reconciliation or adjustment.

    (iv) In year one the percentage shall be 1.75%, in year two it shall be 2.5%, in year three it shall be 5.0%, in year four it shall be 7.5% and in year five it shall be 10.0%. In year 6, the prices calculated in this section shall not be subject to per diem transition rate adjustments.

    (v) Facilities which do not have a July 7, 2011 rate as described above shall not be eligible for the per diem transition adjustment described herein.

    (ac) Other Provisions:

    (1) The appointment of a receiver or the establishment of a new operator or renovation of an existing facility on or after January 1, 2012 shall not result in a revision to the non-capital components of the price.

    (2) For rate computation purposes, "patient days" shall include "reserved bed days", defined as the unit of measure denoting an overnight stay away from the facility for which the patient, or the patient's third-party payor, provides per diem reimbursement when the patient's absence is due to hospitalization or therapeutic leave consistent with a plan of care ordered by such patient's treating health care professional or due to other leaves of absences.

    (3) The base year used to calculate the direct and indirect price components, the base year used to calculate the direct and indirect wage equalization factor, and the Resource Utilization Groups System used to calculate case mix and described herein shall be periodically updated as determined by the Commissioner.

    (4)(i) Subject to the availability of federal financial participation, for services provided on and after July 1, 2012, to patients 21 years of age and older, Medicaid payments for reserved bed days, as defined in paragraph (2) of this subdivision, which are related to a patient's hospitalization shall be reduced from 95% to 50% of the Medicaid rate otherwise payable to the facility with regard to such days of care.

    (ii) Subject to the availability of federal financial participation, for services provided on and after July 1, 2012, to patients 21 years old or older, Medicaid payments for reserved bed days, as defined in paragraph (2) of this subdivision, which do not involve the patient's hospitalization and which are (a) related to a patient’s therapeutic leave of absence for visits to a health care professional that is expected to improve the patient's physical condition or quality of life and that is consistent with a plan of care ordered by such patient’s treating health care professional, or (b) are other leaves of absences, shall be made at 95% of the Medicaid rate otherwise payable to the facility with regard to such days of care.

    (iii) Medicaid payments for reserved bed days which are otherwise in accordance with the provisions of this paragraph shall be available with regard to each Medicaid patient for any twelve month period for up to a combined aggregate of fourteen days for hospitalizations and other therapeutic leaves of absences for visits to a health care professional that are expected to improve the patient's physical condition or quality of life and that are consistent with a plan of care ordered by the patient’s treating health care professional, and for up to an aggregate of ten days for other leaves of absence, provided, however, that these limitations shall not apply to patients who are less than of 21 years of age.

    (iv) Subject to the availability of federal financial participation, in the event the commissioner determines, in consultation with the director of the budget, that the reduction in payments for reserved bed days implemented by the provisions of subparagraph (i) of this paragraph shall achieve projected aggregate Medicaid savings, as determined by the commissioner, of less than forty million dollars for the state fiscal year beginning April first, two thousand twelve, and each state fiscal year thereafter, the commissioner shall establish a prospective per diem rate adjustment, subject to subsequent reconciliation and adjustment, for all nursing homes, other than nursing homes providing services primarily to children under the age of twenty-one, sufficient to achieve such forty million dollars in savings for each such state fiscal year.

    (ad) (1) Effective January 1, 2012, the non-capital components of the rate for specialty facilities shall be the rates in effect for such facilities on January 1, 2009, as adjusted for inflation and rate appeals, in accordance with applicable statutes. Such rates of payment in effect January 1, 2009 for AIDS facilities or discrete AIDS units with facilities shall be reduced by the AIDS occupancy factor, as described in section 12 of part D of chapter 58 of the laws of 2009.

    (2) The non-capital components of rates for new specialty facilities with initial rates issued for periods beginning after January 1, 2009, shall be in accordance with the following:

    (i) For specialty facilities with an initial rate issued for periods beginning after January 1, 2009 but before April 1, 2009, the non-capital components of their rate effective for periods on and after January 1, 2012 shall be the rate in effect on the date the facility commenced operation.

    (ii) For specialty facilities with an initial rate issued for periods beginning after March 31, 2009, but before July 8, 2011, the non-capital components of their rate effective for periods on and after January 1, 2012 shall be the rate in effect on July 7, 2011.

    (iii) For specialty facilities with an initial rate issued for periods beginning after July 7, 2011, the non-capital components of their rate effective for periods on and after January 1, 2012 shall be based on budgeted costs, as submitted by the facility and approved by the Department and as issued by the Department effective on the facility's first day of operation, provided, however, that such specialty facilities shall file certified cost reports reflecting such specialty facility's first twelve months of operation at an occupancy level of 90% or more. The Department shall thereafter issue such facilities rates with non-capital components reflecting such cost reports and such rates shall be effective retroactive to the first day of such twelve month cost report. Nothing in this subparagraph shall be understood as exempting specialty facilities which have not yet achieved 90% occupancy from the generally applicable requirement to file annual calendar year cost reports.

    (iv) Effective 4/1/2016 a neurodegenerative specialty rate shall be established for Huntington’s disease and amyotrophic lateral sclerosis. The rate shall be based on budgeted cost as submitted by the facility and approved by the department and as issued by the department effective on the facility’s first day of operation, provided, however, that such specialty facilities shall file certified cost reports reflecting such specialty facility’s first twelve months of operation at an occupancy level of 90% or more. The department shall thereafter issue such facilities rates with non-capital components reflecting such cost reports and such rates shall be effective retroactive to the first day of such twelve month cost report. Nothing in this subparagraph shall be understood as exempting specialty facilities which have not yet achieved 90% occupancy from the generally applicable requirement to file annual calendar year cost reports. 

    (3) Effective for rate periods on and after January 1, 2012, there will be no case mix adjustments to rates for specialty facilities.

    (ae) Administrative rate appeals from rates issued pursuant to this section shall be subject to otherwise applicable regulatory provisions of this Subpart and to applicable statutory provisions, including, but not limited to, Public Health Law sections 2808(11) and 2808(17).

    Effective Date: 
    Wednesday, November 2, 2016
    Doc Status: 
    Complete
    Statutory Authority: 
    Public Health Law, Section 2808(2-c)

    Section 86-2.41 - Sprinkler systems

    86-2.41 Sprinkler systems

    (a) Subject to the availability of federal financial participation, the capital cost components of the rates of eligible residential health care facilities for periods on and after the effective date of this regulation shall be adjusted in accordance with the following:

    (1) For the purposes of this section, eligible facilities are those facilities which the commissioner determines are financially distressed in terms of their being unable to finance, at terms acceptable to the commissioner, the installation of automatic sprinkler systems, in conformity with the provisions of federal regulations set forth in 42 CFR 483.70(a)(8). In making such determinations of eligibility the commissioner shall consider information obtained from a facility's cost report, other more recent financial information to be provided by the facility, and such other information as may be required by the commissioner, including, but not limited to:

    (i) operating profits and losses;

    (ii) eligibility for funding pursuant to subdivision twenty-one of section 2808 of the Public Health Law;

    (iii) unrestricted fund balances;

    (iv) documentation demonstrating the inability of the facility to obtain credit, at terms acceptable to the commissioner, without the reimbursement treatment accorded pursuant to this section;

    (v) working capital;

    (vi) days of cash expense on hand;

    (vii) days of revenue in accounts receivable;

    (viii) transfers and withdrawals;

    (ix) information related to the health and safety of a facility's residents;

    (x) other financial information as may be required from the facility by the commissioner; and

    (xi) the filing of a Notice pursuant to Subdivision 1-a of Section 2802 of the Public Health Law, or the receipt of required CON approvals, as appropriate.

    (2) The capital cost component of the Medicaid rates of each eligible facility shall be adjusted in an amount, as determined by the commissioner, to reflect the costs of the annual debt service related to the financing of equipment and other capital improvements directly related to the financing of an automatic sprinkler system that will be in compliance with applicable federal regulations.

    (3) As a condition for receipt of funding pursuant to this section, each eligible facility shall submit to the commissioner the costs of the project, the proposed terms of the financing, including interest rate and term of the financing, and a schedule setting forth by month the estimated debt service payable over the life of the financing. Such schedule, along with such other information as may be required by the commissioner, shall be provided to the commissioner for review and approval at least sixty days prior to the due date of such first debt service payment, or such shorter period as the commissioner may permit.

    (4) As a condition for receipt of funding pursuant to this section, Medicaid revenues attributable to the rate adjustments authorized by this section and any other additional facility revenues needed to cover scheduled debt service payments relating to the financing of an automatic sprinkler system that is in compliance with federal regulation as described in this section, shall be deposited into a separate account maintained by the facility and the deposits in such account shall be used solely for the purpose of satisfying such debt service payments.

    Effective Date: 
    Wednesday, January 2, 2013
    Doc Status: 
    Complete

    Section 86-2.42 - Residential health care facility quality pool

    86-2.42. Residential health care facility quality pool.

    (a) For the calendar year 2013 and thereafter, the Commissioner shall establish a residential health care facility quality pool for the purpose of making quality incentive payments to facilities meeting the criteria set forth in this section.  This program shall be referred to as the Nursing Home Quality Pool (NHQP).  The amount of the NHQP shall be $50 million or as determined by the Commissioner.  The financial awards to facilities shall be determined by their performances in the Nursing Home Quality Initiative (NHQI). The measures on which facilities will be evaluated in the NHQI are described below.

    (1) The NHQI shall contain measurement components comprised of quality measures, compliance measures, efficiency measures, and satisfaction measures, if and when satisfaction data becomes available.  Each measure shall be awarded points based on the facility’s performance in the measure.  The points from each measure shall be summed to create an overall score.  Nursing homes shall be categorized into quintile placements based on the distribution of the overall scores.

    (b) From the NHQI, the Commissioner shall exclude:

    (1) Non-Medicaid facilities, Special Focus Facilities as designated by the Centers for Medicare and Medicaid Services (CMS), Continuing Care Retirement Communities, Transitional Care Units, specialty facilities, and specialty units within facilities. Specialty facilities and specialty units shall include AIDS facilities or discrete AIDS units within facilities, facilities or discrete units within facilities for residents receiving care in a long-term inpatient rehabilitation program for traumatic brain injured persons, facilities or discrete units within facilities that provide specialized programs for residents requiring behavioral interventions, facilities or discrete units within facilities for long-term ventilator dependent residents, and facilities or discrete units within facilities that provide services solely to children.

    (2) A facility that is excluded from the NHQI shall not be subject to the Medicaid rate reduction or the fund redistribution methodology of the NHQP.

    (c) Each facility that is not excluded from the NHQI shall be subject to a Medicaid rate reduction to fund the NHQP.  The Medicaid rate reduction shall be calculated as follows:

    (1) The Medicaid revenue for each facility shall be calculated by multiplying the facility’s promulgated Medicaid rate as of January 1 of the payment year by the facility’s total Medicaid patient days, as reported in the facility’s cost report from the measurement year on which the NHQI is based.  The facility’s Medicaid revenue shall be divided by the sum of the Medicaid revenues from all facilities in the NHQI.  The result shall be multiplied by the pool amount, and divided by each facility’s Medicaid patient days as described above.  If a facility failed to submit a cost report for the measurement year on which the NHQI is based, the number of Medicaid patient days from the most recent cost report shall be used. 

    (d) The pool amount shall be redistributed to facilities as follows:

    (1) Facilities shall be categorized into quintile placements based on the distribution of the overall scores in the NHQI.  The pool money shall be redistributed to facilities based on their quintile placements.  Facilities in the top three quintiles shall receive distributions, with facilities in the first quintile receiving a proportion larger than facilities in the second and third quintiles, and facilities in the second quintile receiving a proportion larger than facilities in the third quintile.  To determine the proportions awarded to facilities in the first, second, and third quintiles, the total Medicaid revenue for facilities in such quintiles shall be multiplied by award factors of 3, 2.25, and 1.5, or as determined by the Commissioner, respectively. Facilities in the fourth and fifth quintiles shall not receive a redistribution.  Additionally, if a facility receives a health inspection survey deficiency of a letter J, K, or L between July 1 of the measurement year and June 30 of the payment year, the facility shall not be eligible to receive a redistribution, regardless of its quintile placement.  Payments shall be paid as per diem adjustments for the payment year.  The payment formula for facilities in the top three quintiles is shown in the table below.

     

    Distribution of NHQP Payments

    Facilities Grouped by Quintile

    A

    Facility’s Medicaid Revenue Multiplied by Award Factor

    B

    Share of Pool Allocated to Facility

    C

    Facility Per Diem Payment

    Quintile 1

    Each facility’s Medicaid patient days from the measurement year multiplied by the Medicaid Rate as of January 1 of the payment year= Total Medicaid Revenue, multiplied by an award factor of 3, or an award factor as determined by the Commissioner 

    Each facility’s column A Divided by Sum of Total Medicaid Revenue for all facilities, Multiplied by the pool amount

    Each facility’s column B divided by the facility’s Medicaid patient days from the measurement year

    Quintile 2

    Each facility’s Medicaid patient days from the measurement year multiplied by the Medicaid Rate as of January 1 of the payment year= Total Medicaid Revenue, multiplied by an award factor of 2.25, or an award factor as determined by the Commissioner 

    Each facility’s column A Divided by Sum of Total Medicaid Revenue for all facilities, Multiplied by the pool amount

    Each facility’s column B divided by the facility’s Medicaid patient days from the measurement year

    Quintile 3

    Each facility’s Medicaid patient days from the measurement year multiplied by the Medicaid Rate as of January 1 of the payment year= Total Medicaid Revenue, multiplied by an award factor of 1.5, or an award factor as determined by the Commissioner 

    Each facility’s column A Divided by Sum of Total Medicaid Revenue for all facilities, Multiplied by the pool amount

    Each facility’s column B divided by the facility’s Medicaid patient days from the measurement year

    Total

    Sum of Total Medicaid Revenue for all facilities

    Sum of column B = pool amount

    --

     

    Effective Date: 
    Wednesday, January 3, 2018
    Statutory Authority: 
    Public Health Law, Section 2808(2-c)(d) and Section 95 of Part H of Chapter 59 of the Laws of 2011

    SubPart 86-3 - Health Maintenance Organizations

    Effective Date: 
    Wednesday, January 13, 1993
    Doc Status: 
    Complete
    Statutory Authority: 
    Public Health Law, Sections 2807(2)(h)-(k), 2807-c(2-a), 4403

    Section 86-3.1 - Definitions

    Section 86-3.1 Definitions.

    As used in this Subpart, health maintenance organization or HMO means any entity or entities providing a comprehensive prepaid health service plan(s) certified under article 44 of the Public Health Law. IX-C rate refers to individual hospital rates promulgated by IX-C hospital service plans pursuant to formulae certified by the Commissioner of Health. For the purposes of this Subpart, this shall currently mean the rate established for Blue Cross plans under Subpart 86-1, which constitute the only certified rates at this time. In the event that rates are certified by the commissioner for another IX-C plan in any area in which an HMO is situated, the IX-C rate shall mean the rate approved for the Blue Cross plan in that area.
     

    Doc Status: 
    Complete

    Section 86-3.2 - Applicability of Subpart

    86-3.2 Applicability of Subpart.

    The purpose of this Subpart is to implement the legislative requirement that the Commissioner of Health approve rates to be paid by article 44 HMO's to hospitals for inpatient services.
     

    Doc Status: 
    Complete

    Section 86-3.3 - Rates for hospital services

    86-3.3 Rates for hospital services. Hospitals certified under article 28 of the Public Health Law may not deny admission solely on grounds of HMO membership. This section applies to the general prepaid membership of an HMO; Medicare and Medicaid reimbursement for such services shall be as described in subdivision (h) of this section. Reimbursement to be paid by HMO's to hospitals for these services shall be determined as follows:

    (a) Hospitals certified under article 28 of the Public Health Law shall be reimbursed for the inpatient care of HMO members at a rate which does not exceed the DRG case based rates of payment, adjusted for non-covered services determined pursuant to section 86-1.51(a) of this Title , or equivalent mechanism for the local area if rates are not being used. Hereafter, these rates shall be called DRG case based rates. No supplementary charges may be made by a hospital except as specified in subdivision (c) or (d) of this section.

    (b) When there is more than one DRG case based rate in effect at a rvice hospital, the rate covering the most comprehensive range of services utilized by HMO patients shall be the HMO rate, unless the difference between the comprehensive rate and a less inclusive rate is due to categories of services not utilized in care of HMO inpatients, in which case the less inclusive rate shall be utilized.

    (c) When the HMO inpatient utilizes physician or ancillary services whose allowable costs are not included in the DRG case based rate being utilized, for example, anesthesiologist services if not included in the DRG case based rate, reimbursement for such services shall be negotiated by the HMO and the hospital or provider.

    (d) In cases of nonmedically ordered patient comfort or amenity services not covered by the DRG case based rate, a hospital may bill an HMO member or HMO plan according to local practice or agreement with the HMO.

    (e) Health maintenance organizations, except those affected by outpatient rate provisions certified pursuant to hospital reimbursement formulas submitted under Subpart 86-1 of this Part, shall submit proposed outpatient reimbursement formulas which are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities. In order to enable the full exchange of information between health maintenance organizations and hospitals, as may be necessary for submission and consideration of the proposed outpatient reimbursement formulas as required hereunder and to minimize potential litigation resulting from approval hereunder of any reimbursement formula and rates submitted without benefit of such full information from hospitals, each such health maintenance organization or a group of health maintenance organizations may confer with a hospital, group or association of hospitals, prior as well as subsequent to submission of its proposed reimbursement formula and rates, concerning the reimbursement formula and rates to be submitted for consideration and approval hereunder. Concerning any such conference with any group or association of hospitals, the State Commissioner of Health require from any such health maintenance organizations such report, by way of summary minutes or otherwise, as may be reasonably necessary to the discharge of the responsibilities of the commissioner under this subdivision. However, nothing in this subdivision shall prohibit an individual HMO and an individual hospital from mutually agreeing to any other manner of payment for outpatient services, provided the commissioner first approves such alternate method of payment.

    (f) Notwithstanding the provisions of sections 86-1.51 and hospital for inpatient services provided to subscribers of health maintenance organizations which in the aggregate are less than what the hospital would have otherwise received under the provisions of this Subpart and Subpart 86-1, unless the health maintenance organization demonstrates that lower payments are justified because the arrangement will result in lower hospital costs and the payments approximate cost. Notwithstanding any inconsistent provision of this section, for the period January 1, 1988 through December 31, 1990, negotiated agreements between health maintenance organizations and general hospitals which were approved by the commissioner in accordance with the provisions of Chapter 906 of the laws of 1985 and which were in effect on June 1, 1987 may continue.

    (g) Nothing in this Subpart shall prohibit article 44 HMO's from contracting with article 43 hospital service plans for hospital reimbursement and/or other services, subject to the requirements of the Superintendent of Insurance.

    (h) Notwithstanding any inconsistent provisions of this section, health maintenance organizations operating in accordance with the provisions of article 43 of the insurance law or article 44 of the Public Helath Law, having enrollees eligible for inpatient general hospital payments as beneficiaries of title XVIII of the federal social security act (Medicare) shall reimburse general hospitals for inpatient services for these enrollees in accordance with the provisions contained in title XVIII of the federal social security act (Medicare). Hospitals shall receive Medicaid rates of payments for the care of HMO/Medicaid clients.

    Effective Date: 
    Sunday, January 1, 1989
    Doc Status: 
    Complete

    Section 86-3.4 - Administrative procedures

    86-3.4 Administrative procedures. Implementation of these regulations shall be based on the following:

    (a) No written agreement between hospital and HMO is required to initiate and continue this reimbursement methodology.

    (b) Upon request by the HMO, a hospital shall furnish documentation of the certified IX-C rate(s) in effect at the hospital, or other approved IX-C reimbursement if per diem is not in use.

    (c) Upon receipt of inpatient statements itemizing charges and stating total IX-C reimbursement due to the hospital, the HMO may reimburse the hospital directly. The HMO shall pay such obligations within 30 days of receipt of the statement(s), unless other arrangements are approved by the hospital.

    (d) HMO's and hospitals shall mutually furnish administrative and medical data as is customarily required when third parties are involved in the process of hospital admission, discharge and reimbursement.

    (e) The HMO is responsible for paying retroactive adjustments to IX-C Medicaid and Medicare rates on the basis of the number of patient days of care utilized when the reimbursement method is the 86-3 IX-C access rate.
     

    Doc Status: 
    Complete

    Section 86-3.5 - Health maintenance organization differential

    86-3.5 Health maintenance organization differential.

    (a) Pursuant to section 2807-c(2-a) of the Public Health Law, health maintenance organizations certified under Article 44 of the Public Health Law or Article 43 of the Insurance Law shall pay a nine percent differential on their rates of payment for general hospital inpatient services (hereinafter referred to as the HMO factor) into a statewide health maintenance organization pool, unless the HMO factor is eliminated or reduced in accordance with Public Health Law section 2807-c(2-a). Payment of the HMO factor shall not be required for subscribers who are eligible for medical assistance pursuant to the social services law, and/or participants in regional pilot projects established pursuant to Chapter 703 of the Laws of 1988.

    (b)(1) Commencing on August 15, 1992 and on a monthly basis thereafter, each health maintenance organization shall pay the HMO factor, established or adjusted in accordance with section 2807-c(2-a) of the Public Health Law, into a statewide health maintenance organization pool for each patient discharged on or after July 1, 1992. Funds accumulated in the statewide health maintenance organization pool, including income from invested funds, shall be transferred and credited to the general fund.

    (2) Payments to the statewide health maintenance organization pool and reports required pursuant to paragraph (5) shall be due on or before the 15th day following the end of each month. Health maintenance organizations shall submit estimated amounts due for patients discharged in a calendar month in accordance with this section unless payment of actual amounts due for such calendar month has been made within such 15 day time period. If a health maintenance organization fails to submit actual or estimated payment in accordance with this subdivision, the health maintenance organization shall be subject to interest and penalties in accordance with section 2807-c(2-a)(c)(ii) of the Public Health Law.

    (3) Estimated amounts due for patients discharged in each calendar month shall be determined by multiplying the applicable HMO factor established by section 2807-c(2-a) of the Public Health Law by the sum of actual claims paid, and claims reported to the HMO but not paid, and estimated incurred but not reported claims. The monthly payment shall also include a prior period adjustment that reconciles actual inpatient claims experience compared to prior period estimates of amounts due, consistent with methodologies used in preparation of the HMO's certified financial statements.

    (4) Each HMO required to make payments shall make a final reconciliation and adjustment for each differential payment period. For the year 1992, the differential payment period shall be for the period July 1 through December 31. For years subsequent to 1992, the differential payment period shall be a calendar year period, except that the differential payment period shall be the six month period ending June 30 if the HMO has qualified for a complete elimination of the differential effective July 1 of that year. The final reconciliation for any differential payment period shall be based on the audited inpatient claims experience of the HMO and certified by a certified public accountant. The final reconciliation shall be completed no earlier than three months following the end of the period, and shall be due four months after the end of the period.

    (5) HMOs shall file reports in such form and manner as designated by the Department of Health. Such reports shall indicate the amounts paid based on the discharges in each calendar month and shall separately indicate actual claims paid, claims reported but not paid and claims incurred but not reported, as well as indicate the adjustments made due to reconciliation of prior period estimated claims experience. If an HMO fails to submit the differential payment, the Department of Health for purposes of determining interest and penalties in accordance with section 2807-c(2-a)(c)(ii) of the Public Health Law shall estimate the amounts due pursuant to this section based on the average inpatient monthly claims expense contained in the most recent HMO financial reports submitted to the New York State Insurance Department or the Department of Health.
     

    Effective Date: 
    Wednesday, January 13, 1993
    Doc Status: 
    Complete

    SubPart 86-4 - Free-standing Ambulatory Care Facilities

    Effective Date: 
    Wednesday, June 14, 2017
    Doc Status: 
    Complete
    Statutory Authority: 
    Public Health Law, Sections 2803(2), 2807

    Section 86-4.1 - Definitions

    Section 86-4.1 Definitions. As used in this Subpart:

    (a) Facility shall mean all free-standing ambulatory care facilities, diagnostic and/or treatment centers and clinics that are subject to article 28 of the Public Health Law, provided that such facility has been established by the Public Health Council and possesses a valid operating certificate issued by the Commissioner of Health. Rates of reimbursement for hospital-based facilities shall be governed by Subpart 86-1 of this Part.

    (b) Free-standing ambulatory care facility, diagnostic and/or treatment center and clinic shall mean a medical facility with one or more organized health services not part of an inpatient hospital facility or vocational rehabilitation center, which is primarily engaged in providing services to out-of-hospital or ambulatory patients by or under the supervision of a physician or dentist, for the prevention, diagnosis or treatment of human disease, pain, injury, deformity or physical condition.

    (c) Commissioner shall mean the New York State Commissioner of Health.

    (d) Department shall mean the New York State Department of Health.

    (e) Bureau shall mean the Bureau of Ambulatory Care Reimbursement in the department.

    (f) Article 43 corporation shall mean a corporation organized and operating pursuant to article 43 of the Insurance Law.
     

    Doc Status: 
    Complete

    Section 86-4.2 - Facility rates

    86-4.2 Facility rates.

    (a) Computation of rates of payment for facility services by government agencies and article 43 corporations shall be governed by the provisions of this Subpart.

    (b) Each article 43 corporation shall submit a proposed reimbursement formula not inconsistent with the rules set forth in this Subpart, for approval by the commissioner, no later than 90 days prior to the effective date of rates of payment unless otherwise specified by the commissioner. In order to facilitate the exchange of information necessary for development of the reimbursement formula and rates, each article 43 corporation may confer with any facility, group or association of facilities prior as well as subsequent to submission of its proposed reimbursement formula and rates. The commissioner may require a report of any such contacts, when it is reasonably necessary to the discharge of his or her responsibilities under this Subpart.
     

    Doc Status: 
    Complete

    Section 86-4.3 - Recording and reporting of financial and statistical data

    86-4.3 Recording and reporting of financial and statistical data.

    (a) Effective for all fiscal years beginning on or after January 1, 1975 treatment centers and/or diagnostic centers shall use the accrual basis of accounting except where an alternate basis is mandated by law. For fiscal years beginning on or after January 1, 1986 treatment centers and/or diagnostic centers shall submit to the New York State Department of Health a certified Ambulatory Health Care Facility-1 form (AHCF-1) no later than April 30th of each year or a later due date if specified in the annual report form transmittal.

    (1) Investments, other than donations, shall be reported on the balance sheet of the AHCF-1 at cost. However, the notes to the financial statements shall describe the assets and indicate the quoted market value and cost for each category of investment.

    (2) Fixed assets, other than donations, shall be reported on the balance sheet of the AHCF-1 at cost.

    (b) Each facility shall complete and file with the department and/or its agent annual financial and statistical report forms supplied by the department and/or his agent. Each facility shall also file a copy of the audited financial statements for the facility, covering the same period as the annual report. Information contained in such filings shall be used by the department to establish rates of payment.

    (c) Facilities shall submit to the commissioner separate financial and statistical data for each service and procedure for which rates are established.

    (d) Effective on and after January 1, 1995, all diagnostic and/or treatment centers including satellite clinics covered under the same licensure and excluding diagnostic and/or treatment centers operated by New York City or by the New York City Health and Hospitals Corporation shall maintain all books and records utilized for cost reporting and reimbursement purposes on a calendar-year basis.

    (e) Financial and statistical report forms shall be completed in accordance with generally accepted accounting principles as applied to medical facilities, unless the report instructions authorize specific variation from such principles.

    (f) The financial and statistical reports required by this Subpart shall be submitted to the department and/or its agent no later than 120 days after the close of the fiscal year or a later due date if specified in the annual report form transmittal. A single thirty (30) day extension of time for filing reports may be granted by the commissioner only if a request for extension is received prior to the due date of the report and only if the facility justifies that the reports cannot be filed by the due date for reasons beyond the control of the facility.

    (g) Reserved.

    (h) In the event a facility fails to file the required financial and statistical reports on or before the due date or extended due date, or fails to comply with the provisions of section 86-4.4 of this Subpart, the commissioner shall reduce the facility's current rate paid by state governmental agencies by two percent beginning the first day of the calendar month following the original due date of the required reports and continuing until the last day of the month in which the required reports are filed.
     

    Effective Date: 
    Friday, July 26, 1996
    Doc Status: 
    Complete

    Section 86-4.4 - Certification of reports

    86-4.4 Certification of reports.

    (a) All financial and statistical reports shall be certified by an independent licensed public accountant or an independent certified public accountant on forms prescribed and provided by the Department. A copy of the audited financial statements shall accompany the financial and statistical reports. Where the required financial and statistical report data are incorporated into the audited financial statements of a larger entity, the independent licensed public accountant or the independent certified public accountant shall provide the information necessary to reconcile the cost report presentation to the financial statements in detail. An accountant shall not be independent if: (1) any family relationship, including a relationship by marriage, exists between any accountant, member or employee of the accounting firm and the owner, operator or administrator of the facility; (2) any business relationship other than one related to accounting services exists between any accountant, member, or employee of the accounting firm and the owner, operator or administrator of the facility; (3) any accountant, member, or employee of the accounting firm is responsible for the books and records of the facility; or (4) any accountant, member, or employee of the accounting firm is a member of the board of directors, officer or employee of the facility.

    (b) The requirements of subdivision (a) of this section shall not apply to facilities operated by units of government of the State of New York whose total operating costs are less than $100,000.

    (c) All financial and statistical reports shall be certified by the operator of a proprietary facility, an officer of a voluntary facility or the public official responsible for the operation of a public facility, on forms prescribed and provided by the department.
     

    Effective Date: 
    Wednesday, July 31, 1991
    Doc Status: 
    Complete

    Section 86-4.5 - Correction and supplementation of reports

    86-4.5 Correction and supplementation of reports.

    (a) In the event that any information or data which a facility has submitted to the department for use in establishing rates is found by the facility to be incorrect or incomplete for any reason, the facility shall submit corrected and complete information or data to the Department within 30 days of such finding and prior to certification of the rate.

    (b) If the financial and statistical reports required by this Subpart are determined by the department or its agent to be incomplete or incorrect, the facility shall provide additional or corrected data within 30 days from the date of receipt of notice of the determination. Should the facility fail to file corrected or additional data within that period or by a later date specified by the Commissioner, the provisions of subdivision (h) of section 86-4.3 of this Subpart shall apply.

    (c) All corrected or completed data or information must meet the certification requirements of section 86-4.4 of this Subpart.

    (d) Specific additional data related to the rate setting process may be requested by the commissioner. The commissioner shall supply each facility with a preliminary listing of the data that will be required prior to the start of each rate period. Such data shall be submitted by the facility within 30 days from the date of receipt of a request for such information or by a later date specified by the Commissioner. Failure to submit the additional data shall result in the application of the provisions of subdivision (h) of section 86-4.3, unless the facility documents that the requested data does not exist or cannot reasonably be produced.
     

    Effective Date: 
    Thursday, February 25, 1993
    Doc Status: 
    Complete

    Section 86-4.6 - Audits

    86-4.6 Audits.

    (a) All fiscal and statistical records and reports shall be subject to audit, which must commence no later than six years from the date of filing or the date when due, whichever is later. There shall be no limitation in situations involving possible fraud or where the facility or its agent prevents the Department of Health or the Department of Social Services from performing an audit. Notification by either department to the facility of the department's intent to audit shall toll the six-year period.

    (b) All underlying books, records and documentation which form the basis for fiscal and statistical reports filed by the facility with the department, shall be kept and maintained by the facility for not less than six years from the date of filing or the date upon which the fiscal and statistical records were to be filed, whichever date is later. Any rate of payment certified or approved by the commissioner prior to audit shall represent a provisional rate until an audit is performed and completed, at which time such rate or adjusted rate shall represent the audit rate.

    (c) Rate revisions resulting from audits shall be retroactive to the audited rate period or periods. Any resulting overpayments or underpayments shall be corrected by retroactive adjustment of the provisional rate paid, based upon the period audited.

    (d) The commissioner may promulgate rate revisions based upon audits completed by the department or other State agencies. Unless otherwise indicated, such audits shall not be considered final and shall not preclude conduct of a complete audit by the Department of Health, Department of Social Services or their agents.
     

    Effective Date: 
    Wednesday, March 11, 1992
    Doc Status: 
    Complete

    Section 86-4.7 - Title XVIII (Medicare) certification

    86-4.7 Title XVIII (Medicare) certification. Any facility eligible for Title XVIII (Medicare) certification providing services to patients insured under Title XIX which is not, or ceases to be, a Title XVIII provider of care shall have its current reimbursement rate reduced by 10 percent. This rate reduction may remain in effect until the first day of the month following certification of such a provider by the Title XVIII program. Such rate reductions shall be in addition to any revision of rates based on audit exceptions.

    Effective Date: 
    Wednesday, July 31, 1991
    Doc Status: 
    Complete

    Section 86-4.8 Reserved

    Effective Date: 
    Tuesday, February 19, 1980

    Section 86-4.9 - Units of service

    86-4.9 Units of service. (a) The unit of service used to establish rates of payment shall be the threshold visit, except for dialysis, abortion, sterilization services and free-standing ambulatory surgery, for which rates of payment shall be established for each procedure. For methadone maintenance treatment services, the rate of payment shall be established on a fixed weekly basis per recipient.
    (b) A threshold visit, including all part-time clinic visits, shall occur each time a patient crosses the threshold of a facility to receive medical care without regard to the number of services provided during that visit. Only one threshold visit per patient per day shall be allowable for reimbursement purposes, except for transfusion services to hemophiliacs, in which case each transfusion visit shall constitute an allowable threshold visit.
    (c) The following shall not constitute threshold visits within the meaning of subdivisions (a) and (b) of this section:

    (1) visits solely for the purpose of receiving ordered ambulatory services;

    (2) visits solely for the purpose of receiving pharmacy services;

    (3) visits solely for the purpose of receiving nutrition services;

    (4) visits solely for the purpose of receiving respiratory therapy;

    (5) visits solely for the purpose of receiving recreation therapy;

    (6) visits solely for the purpose of receiving medical social services, except for clinical social worker psychotherapy services as defined in subdivision (g) of this section;

    (7) visits solely for the purpose of receiving group services, except for clinical group psychotherapy services in accordance with the provisions of subdivision (h) of this section;

    (8) offsite services, defined as medical services provided by a facility's clinic staff at locations other than those operated by and under the licensure of the facility, or visits related to the provision of such offsite services, except in accordance with the provisions of subdivision (i) of this section.
    (d) A procedure shall include the total service, including the initial visit, preparatory visits, the actual procedure and follow-up visits related to the procedure. All visits related to a procedure, regardless of number, shall be part of one procedure and shall not be reported as a threshold visit.
    (e) Rates for separate components of a procedure may be established when patients are unable to utilize all of the services covered by a procedure rate. No separate component rates shall be established unless the facility includes in its annual financial and statistical reports the statistical and cost apportionments necessary to determine the component rates.
    (f) Ordered ambulatory services may be covered and reimbursed on a fee-for-service basis in accordance with the State medical fee schedule. Ordered ambulatory services are specific services provided to nonregistered clinic patients at the facility, upon the order and referral of a physician, physician's assistant, dentist or podiatrist who is not employed by or under contract with the clinic, to test, diagnose or treat the patient. Ordered ambulatory services include laboratory services, diagnostic radiology services, pharmacy services, ultrasound services, rehabilitation therapy, diagnostic services and psychological evaluation services.
    (g) For purposes of this section clinical social worker psychotherapy services are defined as individual psychotherapy services provided in a Federally Qualified Health Center, by a licensed clinical social worker or by a licensed master social worker who is working in a clinic under qualifying supervision in pursuit of licensed clinical social worker status by the New York State Education Department.

    (h) Clinical group psychotherapy services provided in a Federally Qualified Health Center (FQHC), are defined as services performed by a clinician qualified as in subdivision (g) of this section, or by a licensed psychiatrist or psychologist to groups of patients ranging in size from two to eight patients. Clinical group psychotherapy shall not include case management services. Reimbursement for these services shall be made on the basis of a FQHC group rate which will be calculated by the Department for this specific purpose, payable for each individual up to the limits set forth herein, using elements of the Resource Based Relative Value System (RBRVS) promulgated by the Centers For Medicare And Medicaid Services (CMS), and approved by the State Division of Budget.

    (i) Federally Qualified Health Centers will be reimbursed for the provision of offsite primary care services to existing FQHC patients in need of professional services available at the FQHC, but, due to the individual's medical condition, is unable to receive the services on the premises of the center.

    (1) FQHC offsite services must:

    (i) consist of services normally rendered at the FQHC site.

    (ii) be rendered to an FQHC patient with a pre-existing relationship with the FQHC (i.e., the patient was previously registered as a patient with the FQHC) in order to allow the FQHC to render continuous care when their patient is too ill to receive on-site services, and only to patients expected to recover and return to become an on-site patient again. Off-site services may not be billed for patients whose health status is expected to permanently preclude return to on-site status.

    (iii) be rendered only for the duration of the limiting illness, with the intent that the patient return to regular treatment as an on-site patient as soon as their medical condition allows.

    (iv) be an individual medical service rendered to an FQHC patient by a physician, physician assistant, midwife or nurse practitioner.

    (v) not be rendered in a nursing facility or long term care facility, to any patient expected to remain a patient in that facility or at that level of care.

    (vi) not be billed in conjunction with any other professional fee for that service, or on the same day as a threshold visit.

    (2) Reimbursement for these services shall be made on the basis of an FQHC offsite professional rate, which will be calculated by the Department using elements of the Resource Based Relative Value System (RBRVS) promulgated by the Centers For Medicare And Medicaid Services (CMS) and approved by the State Division of Budget.

    Effective Date: 
    Wednesday, March 25, 2009
    Doc Status: 
    Complete

    Section 86-4.10 - Minimum utilization standards

    86-4.10 Minimum utilization standards.

    (a) For the purpose of determining the number of threshold visits to be used in the computation of basic rates, the commissioner shall establish minimum utilization standards as provided in this section. Such standards shall be based upon an assessment of visits per full-time equivalent for health care personnel. A full-time equivalent (FTE) shall be based upon a 35-40 hour week.

    (b) For the comprehensive primary care facilities, threshold visits shall be imputed at:

    (1) 3,500 visits per year per FTE for the services of physicians and physician specialists;

    (2) 3,000 visits per year per FTE for the services of dentists;

    (3) 2,100 visits per year per FTE for the services of other health care providers such as physician's assistants, licensed midwives, nurse practitioners and dental hygienists;

    (4) 2,100 visits per year per FTE for the services of therapists, such as speech, occupational and physical therapists;

    (5) 1,500 visits per year per FTE for the services of mental health counselors.

    Effective Date: 
    Wednesday, January 23, 2002
    Doc Status: 
    Complete

    Section 86-4.11 - Computation of basic rate for facilities other than licensed free-standing ambulatory surgery centers

    86-4.11 Computation of basic rate for facilities other than licensed free-standing ambulatory surgery centers.

    (a) Rates of payment for facilities other than licensed free-standing ambulatory surgery centers shall be established on a prospective basis and shall be computed on the basis of allowable fiscal and statistical data submitted by the facility for the fiscal year ended at least 15 months prior to the year for which rates are being set. Unless otherwise specified in this Subpart, the computed rates shall be all-inclusive, taking into consideration total allowable costs and total billable patient visits or procedures.

    (b) Rates will be determined by applying ceiling limitations to allowable operating costs, applying the trend factor to the result, adding reimbursable capital costs, and dividing the sum by the total number of visits or procedures. In the case of proprietary facilities, a return on investment shall be added to reimbursable costs.

    (c) Certification by the commissioner of reimbursement rates of payment by governmental agencies for the period April 1, 1993 through March 31, 1994 shall be extended six months, through September 30, 1994, by applying the applicable trend factors. Rates of payment shall then be for the fiscal-year period October 1st through September 30th. Approval by the commissioner of reimbursement rates for article 43 corporations shall be for the periods specified in the reimbursement formula approved by the Commissioner of Health.
     

    Effective Date: 
    Wednesday, July 13, 1994
    Doc Status: 
    Complete

    Section 86-4.12 - Allowance for diagnostic and/or treatment centers providing a disproportionate share of bad debt and charity care

    86-4.12 Allowance for diagnostic and/or treatment centers providing a disproportionate share of bad debt and charity care.

    (a) Basic rates of payment by governmental agencies for voluntary non-profit or publicly sponsored diagnostic and/or treatment centers which provide a comprehensive range of primary health care services and can demonstrate losses as a result of providing a disproportionate share of bad debt and charity care shall include a bad debt and charity care allowance. In addition, a diagnostic and/or treatment center which is approved as a preferred primary care center may be eligible for a supplemental allowance. The supplemental allowance shall be based on losses associated with the delivery of bad debt and charity care incurred by a preferred primary care provider to the extent such losses exceed any losses associated with the delivery of bad debt and charity care incurred for 1993 or if later, the year immediately preceding the year in which the diagnostic and/or treatment center is first designated as a preferred primary care provider.

    (b) The provisions of this section shall apply to rates of payment for rate periods during the period July 1, 1990 through March 31, 1991; April 1, 1991 through March 31, 1992, April 1, 1992 through March 31, 1993 and April 1, 1993 through September 30, 1994 and for each fiscal year period commencing on October first thereafter for the distribution of the bad debt and charity care allowance, and to rates of payment during the period January 1, 1994 through March 31, 1994 and each fiscal year period commencing on April 1st thereafter for preferred primary care providers who are eligible to receive a receive a supplemental allowance.

    (c) Eligibility shall be limited to voluntary non-profit and publicly sponsored diagnostic and/or treatment centers for the initial distribution of the bad debt and charity care allowance and to diagnostic and/or treatment centers designated as preferred primary care providers for the supplemental allowance which meet the following criteria:

    (1) the facility must demonstrate that it is licensed to provide primary medical care, must primarily provide a comprehensive range of primary care and related support services;

    (2) the facility must be able to demonstrate on forms prescribed by the commissioner that a minimum of fifteen percent of total clinic threshold visits reported for the base year were eligible visits as defined in subdivision (e)(2) of this section;

    (3) the facility must be able to demonstrate that it has made reasonable efforts to maintain financial support from community and public funding sources;

    (4) the facility must be able to demonstrate that it has made reasonable efforts to collect payments for services from third-party insurance payors, governmental payors and self-paying patients;

    (5) the facility must receive an all-inclusive cost-based Medicaid reimbursement rate in accordance with section 86-4.11 of this Title;

    (6) the facility must have no petition for bankruptcy filed under either Chapter 7 or Chapter 11 of Title 11 of the U.S. Code. The commissioner may waive this criteria if the facility demonstrates that it is financially viable or a potentially financially viable organization with a comprehensive plan to maintain fiscal integrity.

    (d) An annual aggregate amount set forth in statute (see Public Health Law 2807(2)(f)) shall be allocated and distributed to publicly sponsored and voluntary non-profit diagnostic and/or treatment centers.

    (e) Allowances shall be established on a prospective basis and shall be computed on the basis of allowable fiscal and statistical data submitted by the facility for the fiscal year ended at least fifteen months prior to the year for which allowances are being set. The bad debt and charity care allowance shall be paid as an addition to the facility's rate of payment. The amount to be paid will be calculated by dividing each eligible facility's bad debt and charity care loss by base year Medicaid threshold visits.

    (1) Eligible losses will be calculated by applying a facility's Medicaid rate of payment for the rate period for which the allowance is being determined, to identified base year eligible visits or units of service.

    (2) An eligible visit shall be defined as the unit of service upon which Title XIX payment is based provided, however, to an individual who after a reasonable period of time appears to be unable to pay all or a portion of the payment due for the service, except for those portions of the payment due which are covered by a government agency, insurer or third- party payor, including payment made directly to the diagnostic and/or treatment center and indemnity or similar payment.

    (3) All payments received in the base year directly for eligible visits, government and entitlement revenues obtained for the purpose of subsidizing the diagnostic and/or treatment center's general operating expenses and any supplemental allowance received by a diagnostic and/or treatment center designated as a preferred primary care provider shall be offset against eligible costs to arrive at an eligible loss under this section. (4) An annual amount of loss coverage will be calculated by applying eligible losses against the following nominal loss coverage formula:

    Percent of eligible bad debt and charity care clinic visits to Percent of nominal total visits loss coverage

    up to 15% 50%

    15% to 30% 75%

    30% plus 100%

    The nominal loss coverage percentages may be increased to not more than one hundred percent for voluntary non-profit or publicly sponsored diagnostic and/or treatment centers if the sum of the nominal payments for all eligible voluntary non-profit or public diagnostic and/or treatment centers is less than the amounts allocated for non-public or public agencies.

    (5) Separate coverage ratios shall be established for voluntary non-profit and publicly sponsored diagnostic and/or treatment centers in order to make the allocation described in subdivision (d) of this section. These coverage ratios will consist of the aggregate nominal losses for voluntary non-profit and publicly sponsored diagnostic and/or treatment centers, divided into non-public and publicly sponsored disproportionate share allocations, as appropriate. These coverage ratios shall be applied to each voluntary non-profit or publicly sponsored diagnostic and/or treatment center's annual amount of bad debt and charity care loss coverage to determine the level of bad debt and charity case losses to be incorporated into each facility's Medicaid rate of payment.

    (6) The department may make periodic prospective adjustments to an eligible facility's Medicaid payment to ensure that each facility receives the full amount of the allowance for which it is eligible. In no instance shall a diagnostic and/or treatment center receive an allowance which in the aggregate exceeds the maximum amount for which it is eligible under this section. In no event shall a facility receive an allowance in an amount exceeding the facility's need for financing losses associated with the delivery of bad debt and charity care.

    (f)(1) Eligible facilities shall submit to the department a supplement to the cost report used for Title XIX (Medicaid) reimbursement. This supplement shall be provided by the department and must be returned to the department within 45 days from the date it is received by facilities for the 1990 and 1991 rate years and thereafter shall be returned to the department with the cost report used for purposes of Title XIX reimbursement. The supplement shall include but not be limited to the number of eligible visits or units of service, the costs of eligible services, patient and third-party revenues associated with the eligible services, government and entitlement revenues and Article 2 and Article 6 Local Assistance funding associated with charity care as part of its annual reporting process.

    (2) Eligible facilities shall collect and report actual threshold visits and revenues associated with the provision of bad debt and charity care services to their patient population. All reported data will be subject to audit. The allowance may be revised based upon audit findings.

    (3) Facilities shall provide assurances that they will make and shall document upon request, the reasonable efforts made to maintain financial support from community and public funding sources and to collect payments from third-party payors, governmental payors and self-pay patients.

    (4) The commissioner may retroactively reduce a facility's allowance if it is determined that actions or decisions by a facility's management have caused a significant reduction for the rate period in the delivery of comprehensive primary health care services to bad debt and charity care patients.
     

    Effective Date: 
    Wednesday, July 13, 1994
    Doc Status: 
    Complete

    Section 86-4.13 - Groupings

    86-4.13 Groupings.

    (a) For the purpose of establishing reimbursable operating costs, facilities shall be compared on the basis of the following general criteria:

    (1) similarity of services; and

    (2) regional economic factors.

    (b) Comparisons using similarity of services shall be based on the following:

    (1) Comprehensive primary medical care services shall mean those health care services organized to provide basic medical care to the general population without regard to patient category or characteristics such as health status, diagnosis, age or sex. Such primary medical care services shall be provided by staff sufficient in number and capable of delivering comprehensive primary medical care services. A facility providing comprehensive primary medical care services as its principal mission shall be categorized as a comprehensive primary medical care facility.

    (2) Limited primary medical care services shall mean those health care services organized to provide basic medical care to a population of individuals with a specific medical condition or dysfunction. Such primary medical care services focus on the medical care needs of this population that are incidental to, interrelated with or a consequence of the specific primary medical diagnosis/disease process. When limited primary medical care services are not the principal mission of a facility, the facility providing limited primary medical care services shall be categorized based on the services, as defined in this section, which it provides as its principal mission and shall not be categorized as a comprehensive primary medical care facility.

    (3) Family planning services shall mean those services organized to provide reproductive and/or gynecological related health care services to men and women of reproductive age. A facility providing family planning services as its principal mission shall be categorized as a family planning facility.

    (4) Abortion services shall mean those services related to the termination of pregnancy including services associated with verification of the pregnancy, abortion counseling services and post-procedure examinations. Sterilization procedures done as outpatient surgery shall be included in this category as well. A facility providing abortion services as its principal mission shall be categorized as an abortion facility.

    (5) Developmentally disabled services shall mean those services organized to provide ongoing/long-term rehabilitation therapy services to individuals with developmentally related physical disabilities. A facility providing developmentally disabled services as its principal mission shall be categorized as a developmentally disabled services facility.

    (6) Rehabilitation therapy services shall mean those services organized to provide episodic or short-term restorative therapy services to individuals physically disabled from causes that are predominantly other than developmentally related. A facility providing such rehabilitation therapy services as its principal mission shall be categorized as a rehabilitation therapy facility.

    (7) Speech and hearing services shall mean speech/language pathology and audiology services. A facility providing speech and hearing services as its principal mission shall be categorized as a speech and hearing facility.

    (8) Dental services shall mean those services organized to provide basic dental care to the general population. A facility providing dental services as its principal mission shall be categorized as a dental facility.

    (9) Dialysis services shall mean hemodialysis, peritoneal dialysis and home dialysis services provided to patients with chronic renal disease. A facility providing dialysis services as its principal mission shall be categorized as a dialysis facility.

    (10) Optometric services shall mean optometry and services related to eye and vision care. A facility providing optometric services as its principal mission shall be categorized as an optometric facility.

    (11) Methadone maintenance treatment services shall mean drug detoxification and drug dependency counseling and rehabilitation services which include chemical management of the patient with methadone. A facility providing methadone maintenance treatment services as its principal mission and certified by the Office of Alcohol and Substance Abuse Services shall be categorized as a methadone maintenance treatment program (MMTP) facility.

    (12) Drug free services shall mean drug dependency counseling and rehabilitation services, including incidental and interrelated medical care services, provided in a drug free environment. A facility providing drug free services as its principal mission shall be categorized as a drug free facility.

    (13) Child health services shall mean acute, episodic, preventive and well child care services, including immunizations, provided to the pediatric population. A facility providing child health services as its principal mission shall be categorized as a child health facility. (14) A county sponsored facility which does not provide comprehensive primary medical care services but provides health care services such as dental, well child care, immunizations, TB services, STD services, and prenatal and/or other reproductive related health care services shall be categorized as a county sponsored multi-service facility.

    (c) Regional economic factors shall be defined to mean significant differences in labor cost experienced by facilities that are due to their geographic location and which impact on the delivery of patient care services.

    (d) For the purpose of comparison, when there are fewer than three facilities defining a particular category of service as their principal mission, the facilities will be treated as ungrouped until such time as there are at least two other similar facilities.
     

    Effective Date: 
    Thursday, April 1, 1993
    Doc Status: 
    Complete

    Section 86-4.14 - Ceilings on payments

    86-4.14 Ceilings on payments.

    (a) Reimbursement rate ceilings for the administrative cost center, the patient transportation cost center and for comparable patient care cost centers shall be established for facilities. Comparable patient care cost centers shall include, but not be limited to, the following:

    (1) ancillary services cost center (clinical laboratory, pharmacy and diagnostic radiology services);

    (2) medical services cost center;

    (3) dental services cost center; and

    (4) therapy services cost centers.

    For a facility which provides limited primary medical care services as defined in section 86-4.13(b)(2) of this Subpart, the administrative and patient care costs incurred by the facility to provide such limited primary medical care services shall be excluded from the costs used to determine the ceilings for the facility's peer group. Reimbursement specific to limited primary medical care services will be established for the facility. The ceilings on costs related to limited primary medical care services will be determined based on the cost experience of facilities which provide limited primary medical care services.

    (b) The ceilings shall be established prior to the addition of the trend factor and after the exclusion of desk-audit disallowances and capital costs from total reported costs. The costs of facilities with costs less than 75 percent or over 125 percent of the group average will be raised or lowered to fall within the 75-percent to 125-percent limits.

    (c) Ceilings for each cost center shall be computed at 105 percent of the adjusted weighted average base year costs of the facilities in the cost center group.

    (d) For the purpose of grouping facilities to establish cost center group ceilings, comprehensive primary medical care facilities will be grouped taking into consideration geographical differences such as upstate/downstate regions and urban/rural locations; family planning facilities will be grouped taking into consideration upstate/downstate regions; all other facilities will be grouped on a statewide basis. If upstate/downstate regions and/or urban/rural locations have not already been taken into account, the ceilings for facilities grouped in accordance with Subpart 86-4.13(b) will be adjusted by wage adjustment factors to recognize differences due to regional economic factors.

    (e) The wage adjustment factor will be established by the commissioner based on examination of the salary and employee health and welfare cost experience of the facilities grouped in accordance with section 86-4.13(b) and the methodology described in section 86-1.54(j)(2). The wage adjustment factors will be updated on an annual basis upon then current and available data.

    (f) Ceilings for operating costs of ungrouped facilities shall be established at the lower of reported base-year operating costs trended to the rate period or the operating cost component of the existing published rate trended forward by a one-year trend factor.

    (g) A change in a facility's group or a revision in cost after ceilings have been established shall not cause a recalculation of ceilings for other facilities in the original or new groups, unless the change was occasioned by an error by the department.
     

    Effective Date: 
    Thursday, April 1, 1993
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    Section 86-4.15 - Calculation of trend factor

    86-4.15 Calculation of trend factor.

    (a) The commissioner shall establish trend factors to project increases in allowable operating costs during the effective period of the reimbursement rate.

    (b) To determine trend factors, the elements of facilities' costs shall be weighted based upon data for salaries, employee health and welfare expense, nonpayroll administrative and general expense, nonpayroll household and maintenance expense, and nonpayroll professional care expense. Each weight shall be adjusted by one or more price indices. Included among these indices are elements of the United States Department of Labor consumer and producer price indices and special indices developed by the commissioner for this purpose.

    (c) The projected trend factors shall be updated on an annual basis, based upon then current and available data. The commissioner shall adjust subsequent trend factors based upon such update.
     

    Effective Date: 
    Wednesday, July 31, 1991
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    Section 86-4.16 - Revisions in certified rates

    86-4.16 Revisions in certified rates.

    (a) The commissioner shall consider only those applications for prospective revisions of certified or approved rates which are in writing and which address one or more of the issues set forth in this section.

    (b) Errors, whether mathematical or clerical, made by the department or an article 43 corporation in the rate calculation process or in the development of group ceilings, and errors, whether mathematical or clerical or otherwise, in data submitted by a facility, when the revised data submitted meet the same certification requirements as the original data, may be the basis for an application for prospective revision of a certified or approved rate. Such errors may include, but shall not be limited to, the following areas related to the development of reimbursable costs:

    (1) funding of depreciation, capital costs, patient visits/procedure; and

    (2) nonallowable costs, such as revenue recoveries. Applications pursuant to this subdivision must be submitted within 120 days of receipt of the applicable title XIX or article 43 corporation program initial rate computation sheet. Any modified rate certified or approved pursuant to this paragraph shall be effective the first day of the rate period. If not commenced within 120 days of receipt of the commissioner's initial rate computation sheet, a rate appeal pursuant to this subdivision may be initiated at time of audit of the base-year cost figures upon or prior to receipt of the notice of program reimbursement. Such rate appeals shall be recognized only to the extent that they are based upon mathematical or clerical errors in cost and/or statistical data originally submitted by the facility, or revisions initiated by a third-party fiscal intermediary or, in the case of a governmental facility, by the sponsor government, or mathematical or clerical errors made by the Department of Health. Such notice of appeal must be presented in writing prior to or at the exit conference for such audits.

    (c) Documented increases in the overall operating costs of a facility resulting from the implementation of additional or expanded programs, staff or services specifically mandated for the facility by the commissioner may be the basis for an application for prospective revision of a certified or approved rate. An appeal may be submitted pursuant to this subdivision at any time throughout the rate period, or within 60 days after the end of the rate period. Any modified rate certified or approved pursuant to this subdivision shall be effective on the date additional staff not reflected in the base year is hired by the facility.

    (d) Documented increases in overall operating costs of a facility resulting from capital renovation, expansion, replacement or the inclusion of new programs, staff or services approved by the commissioner through the certificate of need (CON) process may be the basis for an application for revision of a certified rate, provided, however, that such CON approval shall not be required with regard to such applications for rate revisions which are submitted by federally qualified health centers or rural health centers which are exempt from such CON approval pursuant to section 2807-z of the Public Health Law. To receive consideration for reimbursement of such costs in the current rate year, a facility shall submit, at the time of appeal or as requested by the commissioner, detailed staffing documentation, proposed budgets and financial data, anticipated utilization expressed in terms of threshold visits and/or procedures and, where relevant, the final certified costs of construction approved by the department. An appeal may be submitted pursuant to this paragraph at any time throughout the rate period. Any modified rate certified or approved pursuant to this paragraph shall be effective on the date the new service or program is implemented or, in the case of capital renovation, expansion or replacement, on the date the project is completed and in use.

    (e) Upon receipt of actual cost data for appeals pursuant to subdivisions (c)and (d) of this section, the modified rate based on projections will be retroactively revised to reflect actually incurred costs held to operating cost ceiling limitations and utilization standards set forth in this Subpart.

    (f) Appeals pursuant to subdivision (c) or (d) of this section for subsequent rate periods must be submitted for each subsequent period within 120 days of receipt of the commissioner's initial rate computation sheet for that year.

    (g) Appeals to adjustments made as a result of audits conducted by the Department of Health may be the basis for an application for rate revision. The specific items of appeal and any material documentation necessary to support provider's position must be submitted within 30 days of the receipt of the audit.
     

    Effective Date: 
    Wednesday, February 19, 2014
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    Section 86-4.17 - Appeal process

    86-4.17 Appeal process.

    (a) An application by a facility for review of a certified or approved rate pursuant to section 86-4.16 of this Subpart shall be submitted to the bureau for staff review and shall set forth the basis for the appeal and the issues of fact. Documentation shall accompany the application, where appropriate, and the department may request such additional documentation as is necessary for determination of the issues. The affirmation or revision of the rate based upon such staff review shall be final unless, within 30 days of its receipt, a hearing before a rate review officer is requested by registered or certified mail. The request shall contain a statement of the factual issues to be resolved. The facility may submit memoranda on legal issues which it deems relevant to the appeal.

    (b) Where the rate review officer determines that there is no factual issue, the request for a hearing shall be denied and the facility shall be notified of such determination. No administrative appeal shall be available from this determination. Where the rate review officer determines that there is a factual issue, a notice of hearing shall be issued establishing the date, time and place of the hearing and setting forth the factual issues as determined by such officer. The hearing shall be held in conformity with the provisions of section 12-a of the Public Health Law and the State Administrative Procedure Act.

    (c) The recommendation of the rate review officer shall be submitted to the Commissioner of Health for final approval or disapproval and recertification of the rate where appropriate.

    (d) In reviewing appeals for revisions to certified or approved rates, the commissioner may refuse to accept or consider an appeal from a facility:

    (1) which is providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council;

    (2) which is operated by management determined by the department to be providing an unacceptable level of care in one of its facilities as determined after review by the State Hospital Review and Planning Council;

    (3) where it has been determined by the commissioner that the operation is being conducted by a person or persons not properly established in accordance with the Public Health Law; or

    (4) where a fine or penalty has been imposed on the facility and such fine or penalty has not been paid.

    (e) If an appeal or application by a facility affects only the facility's article 43 rate, the facility must appeal or make application to the article 43 corporation for a change or revision in its article 43 rate within the time periods set forth in this Subpart. If the article 43 corporation recommends that such appeal or application be granted, it shall forward such recommendation to the commissioner for determination. If the article 43 corporation denies such appeal or application, the facility may, within 30 days after receipt of the denial, appeal such determination to the commissioner. The basis upon which a facility may appeal or make application for a change or revision in its article 43 rate shall be the same as the basis for an appeal or application set forth in this Subpart.

    (f) If an appeal or application by a facility for a change or revision in its rate of reimbursement paid by government agencies and determined pursuant to this Subpart also affects the facility's approved article 43 rate, the facility shall forward a copy of its appeal or application to the article 43 corporation at the same time the facility submits the appeal or application to the commissioner. The article 43 corporation shall forward any recommendation for a determination of such appeal or application to the commissioner. Upon the commissioner's determination, the article 43 corporation shall send a copy of such determination to the facility.
     

    Effective Date: 
    Friday, July 26, 1996
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    Section 86-4.18 Reserved

    Effective Date: 
    Tuesday, February 19, 1980

    Section 86-4.19 - Rates for facilities without adequate cost experience

    86-4.19 Rates for facilities without adequate cost experience.

    (a) A facility shall be deemed to be without adequate cost experience when fiscal and statistical data necessary for setting a rate are unavailable through no fault of the operator or his or her agents, and due to circumstances beyond his or her control, or in the instance of a newly licensed facility or in the instance of a new service for which certificate of need (CON) approval has been received as required by law. The rates certified for a facility without adequate cost experience shall be determined on the basis of:

    (1) the rates established for comparable services or facilities in the geographic area;

    (2) reasonable and complete cost projections based on estimated costs and statistics contained in a proposed annual budget for the new service or newly licensed facility, reviewed for adequacy and reasonableness of the proposed operation including but not limited to utilization, as compared to standards established in Section 86-4.10 of this Subpart, staffing, and salaries;

    (3) actual allowable expenditures and statistics for prior or subsequent cost reporting periods; and/or

    (4) existing ceilings.

    (b) Rates for new services or facilities established pursuant to this section shall be retroactively adjusted using actual costs and statistics for the first full fiscal period of operation of the new facility or service.

    (c) Notwithstanding the above, rates of payment for licensed free-standing ambulatory surgery centers shall be determined pursuant to section 86-4.40 of this Subpart.

    (d) All rates of reimbursement certified pursuant to this section, exclusive of those for licensed free-standing ambulatory surgery centers, shall be subject to audit. After audit, the facility rate shall be revised based upon actual allowable costs incurred during the rate period, consistent with the provisions of this Subpart.
     

    Effective Date: 
    Wednesday, July 31, 1991
    Doc Status: 
    Complete

    Section 86-4.20 - Capital cost reimbursement

    86-4.20 Capital cost reimbursement. The capital cost of a facility for purposes of determining and certifying the capital cost component of a rate shall be determined and computed in accordance with the provisions of sections 86-4.23 through 86-4.26 of this Subpart, and shall be certified and audited as actually having been expended. Capital costs shall not be trended or held to operating cost ceilings pursuant to sections 86-4.15 and 86-4.14, respectively.

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    Section 86-4.21 - Allowable costs

    86-4.21 Allowable costs.

    (a) To be considered as allowable in determining reimbursement rates, costs must be actual, reasonable and properly chargeable to necessary patient care. Except as otherwise provided in this Part, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under the title XVIII (Medicare) program.

    (b) Allowable costs shall not include costs for services that have not been approved by the commissioner.

    (c) Allowable costs shall include a monetary value assigned to services provided under contract by religious orders and to services rendered by an owner and operator of a facility or an operator's relatives in accordance with section 86-4.27 of this Subpart.

    (d) Allowable costs may not include amounts in excess of reasonable or maximum title XVIII (Medicare) costs or in excess of customary charges to the general public. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee. Allowable costs shall not include any amount for bad debts.

    (e) Allowable costs shall not include expenses or portions of expenses reported by individual facilities which are determined by the commissioner not to be reasonably related to the efficient production of service because of either the nature or amount of the particular item.

    (f) Allowable costs shall not include costs which principally afford diversion, entertainment or amusement to facility owners, operators or employees.

    (g) Allowable costs shall not include any interest charged or penalty imposed by governmental agencies or courts, or the costs of policies obtained solely to insure against the imposition of such penalties.

    (h) Allowable costs shall not include the direct or indirect costs of advertising (except help-wanted ads), public relations and promotion. Reasonable direct and indirect costs of outreach services designed to attract patients in need of medical services shall be allowable.

    (i) Allowable costs shall not include costs or contributions or other payments to political parties, candidates or organizations.

    (j) Allowable costs shall include only that portion of the dues paid to any professional association which has been determined by the commissioner to be allocable to expenditures other than for public relations, advertising and political contributions.

    (k) Allowable costs shall not include any element of cost determined by the commissioner to have been created by the sale of a facility.

    (l) Allowable costs shall include the cost of services incurred by the facility's staff to provide offsite services to registered patients of the facility. Allowable costs shall not include the cost of offsite services provided to nonregistered patients or the cost of services provided through arrangements with other facilities. When the cost of such services cannot be established, income from such services shall be used to adjust allowable costs.

    (m) Allowable costs shall include the cost of National Health Service Corps personnel, based upon the liability incurred by the facility for the report period, not actual expenditures for the personnel during the report period.

    (n) Allowable costs shall not include the cost of ordered ambulatory services. When the cost of such services cannot be determined, income from the services may be used to adjust allowable costs.

    (o) Allowable costs may include certain costs not normally covered under Medicare (title XVIII of the Social Security Act), including but not limited to the cost of dental services, patient transportation, prescription drugs, eyeglasses, prosthetic or orthotic devices, podiatry services.

    (p) Allowable costs shall not include the costs of education services, including special classroom programs for preschool and school-age children unable to attend public schools, unless such services are medically necessary.

    (q) Allowable costs shall include the costs of recreational services rendered in accordance with a physician's plan of treatment. The costs of recreational services that provide leisure activities shall not be allowable.

    (r) Allowable costs shall not include costs related to inpatient services rendered by hospitals or services related to living accommodations in a residential treatment program.

    (s) All research costs shall be excluded from allowable costs. Research shall include those studies and projects which have as their purpose the enlargement of general knowledge and understanding, are experimental in nature and hold no prospect of immediate benefit to the facility or its patients.

    (t) The costs of educational activities for employees, less tuition paid or reimbursed by other than the facility and supporting tuition or related grants, shall be allowable, provided such activities are directly related to patient care services.

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    Section 86-4.22 - Recoveries of expense

    86-4.22 Recoveries of expense. Operating costs shall be reduced by the cost of services and activities which are not properly chargeable to patient care. In the event that the commissioner determines that it is not practical to establish the costs of such services and activities, the income derived from them may be substituted for their costs. The activities and services covered by this provision include, but are not limited to:

    (a) drugs and supplies sold to other than facility patients;

    (b) telephone and telegraph services for which a charge is made;

    (c) discount on purchases;

    (d) sale of scrap;

    (e) employee cafeterias;

    (f) vending machines;

    (g) operation of parking facilities for community convenience;

    (h) lease of office and other space to concessionaires; and

    (i) sale of silver from X-ray films.
     

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    Section 86-4.23 - Depreciation

    86-4.23 Depreciation.

    (a) Allowable depreciation shall be limited to those assets which are used for purposes of providing or supporting direct patient care. Reported depreciation based on historical cost is recognized as a proper element of cost. Useful lives for assets purchased after 1991 shall be the higher of the reported useful life or those useful lives from the Estimated Useful Lives of Depreciable Hospital Assets, 1988 edition, American Hospital Association, consistent with title XVIII provisions. Useful lives for assets purchased prior to 1991 shall be determined by use of the 1983 edition. Copies of these publications are available from the American Hospital Association, 840 North Lake Shore Drive, Chicago, IL 60611, and copies are available for inspection and copying at the offices of the Records Access Officer of the Department of Health, Corning Tower Building, Empire State Plaza, Albany, NY 12237.

    (b) In the computation of rates for voluntary facilities, depreciation shall be included on a straight-line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years' digits method.

    (1) Voluntary facilities shall fund depreciation unless the commissioner determines, upon application by the facility and after inviting written comments from interested parties, that a waiver of the requirement for funding is necessary and in the public interest. Funding shall mean the transfer of monies to the funded accounts. Board-designated funds and the accrual of liabilities to the funded depreciation accounts shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts for six months or more to be considered as valid funding transactions unless expended for the purposes for which the account was funded.

    (2) Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded.

    (3) Depreciation on major movable equipment shall be funded in the year revenue is received from the reimbursement of each expense and in the amount included in reimbursement for that year.

    (4) Such funds may be used only for capital expenditures with approval as required for the amortization of capital indebtedness.

    (c) In the computation of rates for public facilities, depreciation shall be included on a straight-line method on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years' digits method.

    (d) In the computation of reimbursement rates for proprietary facilities, depreciation shall be computed on a straight-line basis on plant and nonmovable equipment. Depreciation on movable equipment may be computed on a straight-line method or accelerated under a double declining balance or sum-of-the-years' digits method.

    (e) Facilities financed by mortgage loans pursuant to the Hospital Mortgage Loan Construction Law shall conform to the requirements of this Subpart. In lieu of depreciation and interest, on the loan-financed portion of the facilities, the commissioner shall allow level debt service on the mortgage loan, together with such required fixed charges, sinking funds and reserves as may be determined by the commissioner as necessary to assure repayment of the mortgage indebtedness.

    (f) Article 43 corporations may elect to include in their reimbursement rates depreciation computed by a method other than that used in subdivisions (b), (c) and (d) of this section, subject to approval of the commissioner.

    (g) An amount for rent will be reimbursed as capital cost in lieu of depreciation, provided the following conditions are met:

    (1) if required, the lease is reviewed and approved by the department;

    (2) the applicant has no interest, direct or indirect, beneficial or of record, in the ownership of the building or any overlease;

    (3) the rental per square foot, in the judgment of the department, is the same as or is comparable to other rentals in the building in which the facility is to be located, and the rental per square foot is comparable to the rental of similar space in other comparable buildings in the area when such comparisons can be made; and

    (4) the rent, if the lease is a sublease, is the same as or less than rent in comparable leases in the geographic area.
     

    Effective Date: 
    Wednesday, July 31, 1991
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    Section 86-4.24 - Interest

    86-4.24 Interest.

    (a) Necessary interest on both current and capital indebtedness is an allowable cost for all facilities.

    (b) To be considered an allowable cost, interest must be incurred to satisfy a financial need, and at a rate not in excess of what a prudent borrower would have to pay in the money market at the time the loan was made. The interest must be paid to a lender not related through control, ownership, affiliation or personal relationship to the borrower. Financial need for capital indebtedness relating to a specific project shall exist when all available restricted funds designated for capital acquisition of that type have been considered for equity purposes.

    (c) Interest expense shall be reduced by investment income with the exception of income from funded depreciation, qualified pension funds, trusteed malpractice insurance funds or in instances where income from gifts or grants is restricted by donors. Interest on funds borrowed from a donor-restricted fund or funded depreciation is an allowable expense. Investment income shall be defined as the aggregate net amount realized from dividends, interest, rental income, interest earned on temporary investment of withholding taxes, as well as all gains and losses. If the aggregate net amount realized is a loss, the loss is not allowable. Investment income shall reduce interest expense allowed for reimbursement as follows:

    (1) for all medical facilities, investment income shall first be used to reduce operating interest expense for that year;

    (2) any remaining amount of investment income, after application of paragraph (1), shall be used to reduce capital interest expense reimbursed that year for medical facilities; and

    (3) any remaining amount of investment income after application of paragraph (2) shall not be considered in the determination of allowable costs.

    (d) Interest on current indebtedness shall be treated and reported as an operating, administrative expense and shall be held to operating cost ceilings.

    (e) Interest on capital indebtedness shall be an allowable cost if the debt generating the interest is approved by the commissioner, and incurred for authorized purposes, and if the principal of the debt does not exceed either the amount approved by the commissioner or the cost of the authorized purposes. Capital indebtedness shall mean all debt obligations of a facility that are:

    (1) evidenced by a mortgage note or bond and secured by a mortgage on the land, building or nonmovable equipment, a note payable secured by the nonmovable equipment of a facility, or a capital lease;

    (2) incurred for the purpose of financing the acquisition, construction or renovation of land, building or nonmovable equipment; and

    (3) found by the commissioner to be reasonable, necessary and in the public interest with respect to the facility; or

    (4) incurred for the purpose of advance refunding or debt. Gains and losses resulting from the advanced refunding of debt shall be treated and reported as a deferred charge or asset. This deferred charge or asset shall be amortized on a straight-line basis over the period of the scheduled maturity date of the debt being refunded.

    (f) Interest related to refinancing indebtedness shall be considered an allowable cost only to the extent that it is payable with respect to an amount equal to the unpaid principal of the indebtedness then being refinanced. However, interest incurred on refinanced debt in excess of the previously unpaid balance of the refinanced indebtedness will be allowable upon demonstration by the operator to the commissioner that such refinancing will result in a debt service savings over the life of the indebtedness.

    (g) Where a public finance authority has established a mortgage rate of interest such that sufficient cash flows exist to retire the mortgage prior to the stated maturity, the amount of the mortgage to be forgiven, at the time of such forgiveness, shall be capitalized as a deferred asset and amortized over the remaining mortgage life, as a reduction to the facility's capital expense.

    (h) Voluntary facilities shall report mortgage obligations financed by public finance authorities for their benefit and which they are responsible to repay, as liabilities in the general fund when such mortgage obligations are incurred.
     

    Effective Date: 
    Thursday, September 10, 1992
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    Section 86-4.25 - Return on investment

    86-4.25 Return on investment.

    (a) In computing the allowable costs of a proprietary facility, there shall be included an allowance for a reasonable return on the average equity capital representing the owner's investment for the provisions of patient care. The percentage to be used in computing the allowance shall be a rate determined annually by the commissioner to be reasonably related to the then current money market.

    (b) Equity capital is the net worth of the provider adjusted for those assets and liabilities which are not related to the provision of patient care. Equity capital consists of the provider's investment in plant, property and equipment, net of depreciation and noncurrent debt related to the investment or deposited funds, and net working capital for necessary and proper operation of patient care activities.
     

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    Section 86-4.26 - Sales, leases and realty transactions

    86-4.26 Sales, leases and realty transactions.

    (a) If a facility is sold or leased or is the subject of any other realty transaction before a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall be determined in accordance with the provisions of sections 86-4.20, 86-4.23, 86-4.24 and 86-4.25 of this Subpart.

    (b) If a facility is sold or leased or is the subject of any other realty transaction after a rate for the facility has been determined and certified by the commissioner, the capital cost component of such rate shall continue with the same force and effect as if such sale, lease or other realty transaction had not occurred. This subdivision shall not be construed as limiting the powers and rights of the commissioner to change rate computations based upon previous error, deceit or any other misrepresentation or misstatement that has let the commissioner to determine and certify a rate which he would otherwise not have determined or certified. Further, this subdivision shall not be construed as limiting the powers and rights of the commissioner to reduce rates when one or more of the original property right aspects related to a facility is terminated.

    (c) If a facility enters into a sale and leaseback agreement with a nonrelated purchaser involving plant facilities or equipment prior to October 23, 1992 the incurred rental specified in the agreement shall be included in allowable costs if the following conditions are met:

    (1) the rental charges are reasonable based on consideration of rental charges of comparable equipment and market conditions in the area; the type, expected life, condition and value of the equipment rented and other provisions of the rental agreements;

    (2) adequate alternate equipment which would serve the purpose are not or were not available at lower cost; and

    (3) the leasing was based on economic and technical considerations.

    (4) If all these conditions were not met, the rental charge cannot exceed the amount which the facility would have included in reimbursable costs had it retained legal title to the equipment, such as interest, taxes, depreciation, insurance and maintenance costs.

    (5) If a facility enters into a sale and leaseback agreement with a nonrelated purchaser involving land, the incurred rental costs associated with the land are not includable in allowable costs.

    (d) An arms length lease purchase agreement with a nonrelated lessor involving plant facilities or equipment entered into on or after October 23, 1992 which meets any one of the four following conditions, establishes the lease as a virtual purchase.

    (1) The lease transfers title of the facilities or equipment to the lessee during the lease term.

    (2) The lease contains a bargain purchase option.

    (3) The lease term is at least 75 percent of the useful life of the facilities or equipment. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment.

    (4) The present value of the minimum lease payments (payments to be made during the lease term including bargain purchase option, guaranteed residual value and penalties for failure to renew) equals at least 90 percent of the fair market value of the leased property. This provision is not applicable if the lease begins in the last 25 percent of the useful life of the facilities or equipment. Present value is computed using the lessee's incremental borrowing rate, unless the interest rate implicit in the lease is known and is less than the lessee's incremental borrowing rate, in which case the interest rate implicit in the lease is used.

    (e) If a lease is established as a virtual purchase under subdivision (d) of this section, the rental charge is includable in capital-related costs to the extent that it does not exceed the amount that the provider would have included in capital-related costs if it had legal title to the asset (the cost of ownership). The cost of ownership shall be limited to depreciation and interest. Further, the amounts to be included in capital-related costs are determined as follows:

    (1) The difference between the amount of rent paid and the amount of rent allowed as capital-related costs is considered a deferred charge and is capitalized as part of the historical cost of the asset when the asset is purchased.

    (2) If an asset is returned to the owner instead of being purchased, the deferred charge may be included in capital-related costs in the year the asset is returned.

    (3) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase still exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to an amount not in excess of the cost of ownership. (4) If the term of the lease is extended for an additional period of time at a reduced lease cost and the option to purchase no longer exists, the deferred charge may be included in capital-related costs to the extent of increasing the reduced rental to a fair rental value.

    (5) If the lessee becomes the owner of the leased asset (either by operation of the lease or by other means), the amount considered as depreciation for the purpose of having computed the limitation on rental charges under subdivision (e) of this section, must be used in calculating the limitation on adjustments for the purpose of determining any gain or loss upon disposal of an asset.

    (6) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs had the provider legal title to the asset.

    (f) If a facility enters into a sale and leaseback agreement involving plant facilities or equipment on or after October 23, 1992, the amounts to be included in capital-related costs both on an annual basis and over the useful life of the asset shall not exceed the costs of ownership, which shall be limited to depreciation and interest, and shall be determined as follows:

    (1) If the annual rental or lease cost in the early years of the lease are less than the annual costs of ownership, but in the later years of the lease the annual rental or lease costs are more than the annual costs of ownership, in the years that the annual rental or lease costs are more than the annual costs of ownership, the facility may include in capital-related costs annually the actual amount of rental or lease costs, except that in any given year, the amount included in capital related costs is limited to an amount which would not cause the aggregate rental or lease costs included up to that year in capital-related costs to exceed the costs of ownership that would have been included in capital-related costs up to that year if the provider had retained legal title to the asset.

    (2) If the annual rental or lease costs in the early years of the lease exceed the annual costs of ownership, which shall be limited to depreciation and interest, but in the later years of the lease the annual rental or lease costs are less than the annual costs of ownership, the facility may carry forward amounts of rental or lease costs that were not included in capital-related costs in the early years of the lease due to the costs of ownership limitation, and include these amounts in capital-related costs in the years of the lease when the annual rental or lease costs are less than the annual costs of ownership, provided, however, in any given year the amount of actual annual rental or lease costs plus the amount carried forward to that year may not exceed the amount of the costs of ownership for that year.

    (3) In the aggregate, the amount of rental or lease costs included in capital-related costs may not exceed the amount of the costs of ownership that the provider could have included in capital-related costs if the provider had retained legal title to the asset.

    (4) If a facility enters into a sale and leaseback agreement involving land, the incurred rental for the cost of land is not includable in allowable costs.
     

    Effective Date: 
    Monday, October 25, 1993
    Doc Status: 
    Complete

    Section 86-4.27 - Compensation of operators and relatives of operators

    86-4.27 Compensation of operators and relatives of operators.

    (a) Reasonable compensation for operators or relatives of operators for required services actually performed shall be considered an allowable cost. The amount to be allowed shall be equal to the amount normally required to be paid for the same service provided by a nonrelated employee, as determined by the commissioner. Compensation shall not be included in the rate computation for any services which the operator or relative of the operator is not authorized to perform under New York State law and regulation.

    (b) In determining a reasonable level of compensation for operators or relatives of operators, the commissioner may consider the quality of care provided to patients by the facility during the year in question.
     

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    Section 86-4.28 - Related organizations

    86-4.28 Related organizations.

    (a) A related organization shall be defined as any entity which controls the facility or which the facility controls, either directly or indirectly, or an organization or institution whose actions or policies the facility has the power, directly or indirectly, to significantly influence or direct, or a special purpose organization or where an association of material interest exists in an entity which supplies goods and/or services to the facility, or any entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption. A special purpose organization shall be defined as an organization which is established to conduct certain of the facility's patient-care-related or non-patient-care-related activities. The special purpose organization shall be considered to be related if:

    (1) the facility controls the special purpose organization through contracts or other legal documents that allow direct authority over the organization's activities, management and policies; or

    (2) the facility is, for all practical purposes, the sole beneficiary of the special organization's activities. The facility shall be considered the special purpose organization's sole beneficiary if one or more of the three following circumstances exist:

    (i) a special purpose organization has solicited funds in the name of and with the expressed or implied approval of the facility, and substantially all the funds solicited by the organization were intended by the contributor or were otherwise required to be transferred to the facility or used at its discretion or direction;

    (ii) the facility has transferred some of its resources to a special purpose organization, substantially all of whose resources are held for the benefit of the facility; or

    (iii) the facility has assigned certain of its functions (such as the operation of a dormitory) to a special purpose organization that is operating primarily for the benefit of the facility.

    (b) The costs of goods and/or services furnished to a facility by a related organization shall be included in the computation of the basic rate at the lower of the cost to the related organization or the market price of comparable goods and/or services available in the facility's region within the course of normal business operations.
     

    Effective Date: 
    Wednesday, March 11, 1992
    Doc Status: 
    Complete

    Section 86-4.29 Reserved

    Section 86-4.30 Reserved

    Section 86-4.31 - Termination of service

    86-4.31 Termination of service.

    The bureau shall be notified within 30 days of the deletion of any previously offered service or if services are withheld from patients paid for by any government agency. Such notification shall include a statement indicating the date of the deletion or withholding of the service and the cost impact of such action on the facility. Rates shall be adjusted to reflect the deletion or withholding of a service. Should the facility fail to provide timely notice to the bureau and receive overpayments, penalties and rate reduction in the manner provided in sections 86-4.3 and 86-4.6 of this Subpart shall apply.
     

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    Section 86-4.32 Reserved

    Section 86-4.33 Reserved

    Section 86-4.34 - Pilot reimbursement projects

    86-4.34 Pilot reimbursement projects.

    (a) The commissioner may waive the requirements of this Subpart to effect the development of additional knowledge and experience in different types of reimbursement mechanisms, contingent upon the approval of the United States Department of Health and Human Services where necessary.

    (b) Individual facilities or groups of facilities shall enter into such ventures with the understanding that the reimbursement received over the life of the projects shall be as defined in the experiment contract.
     

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    Section 86-4.35 - Computation of basic rates for clinic services provided to Acquired Immune Deficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HIV) sero-positive patients by freestanding ambulatory care facilities and hospital clinic outpatient

    86-4.35 Computation of basic rates for clinic services provided to Acquired Immune Deficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HIV) sero-positive patients by freestanding ambulatory care facilities and hospital clinic outpatient services.

    (a) For payments made pursuant to this section and pursuant to section 86-1.11(h) of this Part, for ambulatory services to AIDS patients, HIV- positive patients, and patients seeking verification of HIV infection, reimbursement shall be based upon a single payment schedule with a discrete price for each of the five clinic services set forth in subdivision (c) of this section.

    (b) To be eligible to receive reimbursement pursuant to this section, facilities must be licensed pursuant to Article 28 of the Public Health Law and certified to provide general medical services and complete a written signed agreement with the commissioner to provide these discrete services. Facilities interested in establishing such agreements must submit in writing the required documentation in a manner acceptable to the commissioner. Such agreement shall describe the Medicaid patients who will be eligible for reimbursement under this section and shall establish the documentation and services required for patient assignment to each of the five clinic services.

    (c) The five clinic services for which reimbursement shall be available according to the prices as established by this section are as follows:

    (1) HIV Counseling and Testing Visits - This visit shall mean the provision of pre-test HIV counseling in a medical setting as performed in compliance with Article 27-f of the State Public Health Law. This visit shall also include laboratory testing necessary to determining whether a person has HIV disease. This visit shall also mean the provision of post-test HIV counseling in a medical setting as performed in compliance with the confidentiality provisions of Article 27-f of the State Public Health Law for those individuals whose test results are positive. This visit is available for the purpose of informing these individuals of their test results and providing supportive counseling for those HIV zero positive persons experiencing adverse psychological responses to their serostatus.

    (2) Post-test Counseling Visit - This visit shall mean the provision of post-test HIV counseling in a medical setting as performed in compliance with the confidentiality provisions of Article 27-f of the State Public Health Law for those persons whose test results are negative. This visit is available for the purpose of informing these individuals of their results and counseling them on preventive measures.

    (3) Initial Comprehensive HIV Medical Evaluation Visit - This visit shall mean a comprehensive medical history and physical examination, and laboratory testing necessary for the evaluation of HIV disease and related conditions. The evaluation shall be complete enough to: establish the state of HIV illness, diagnose active opportunistic infections and tumors, identify appropriate prophylactic therapies to prevent future opportunistic infections, initiate indicated anti-HIV therapy, and identify significant psycho-social problems to be addressed in the care plan.

    (4) Drug and Immunotherapy Visits for HIV Infected Patients - This visit shall mean to those HIV-related treatments that require active health care supervision during the treatment visit and/or extensive amount of provider monitoring following the treatment.

    (5) Monitoring Visit for Asymptomatic HIV Disease - This visit shall mean the clinical and laboratory evaluation necessary to monitor the status of HIV disease to indicate the appropriate stage to initiate active drug treatment for HIV or prophylactic treatment for opportunistic infections.

    (d) The prices established pursuant to this section shall provide full reimbursement for the following:

    (1) physician services, nursing services, technician services, and other related professional expenses directly incurred by the licensed facility;

    (2) space occupancy and plant overhead costs;

    (3) administrative personnel, business office, data processing, recordkeeping, housekeeping, and other related facility overhead expenses;

    (4) all ancillary services including laboratory tests and diagnostic x-ray services where specified in the treatment regimes and as detailed in the agreement pursuant to subdivision (b) of this section; and

    (5) all medical supplies, immunizations, and drugs directly related to the provision of the services except for those drugs used to treat AIDS patients for which fee for service reimbursement is available under section 7.0 of the Medicaid Ordered Ambulatory Services Fee Schedule as contained in the Medicaid Management Information Systems (MMIS) Clinic Services Provider Manual (revised October, 1988). Copies of the schedule may be obtained from the New York State Department of Social Services and are available for inspection and copying at the Department of Health, Records Access Office, 22nd floor, Corning Tower Building, Governor Nelson A. Rockefeller Empire State Plaza, Albany, New York 12237-0042. (e) The price for each service shall be adjusted for regional differences in wage levels, space occupancy and facility overhead costs.

    (f) The commissioner shall establish trend factors to project increases in the base year prices during the effective period of the reimbursement rates. The trend factors shall be developed using available price indices including elements of the United States Department of Labor consumer and producer price indices and special price indices developed by the commissioner for this purpose. The projected trend factors shall be updated on an annual basis, based upon current and available data.

    (g) At the discretion of the commissioner, health services may be added or deleted from the visits contained in subdivision (c) of this section. The commissioner shall notify participating providers of such changes at least 60 days before such changes shall be effective and the agreements as outlined in subdivision (b) of this section shall be modified to encompass any such changes.

    (h) Payment for any other clinic services which are not covered pursuant to subdivision (c) of this section shall be reimbursed as follows:

    (1) for facilities with a cost-based all-inclusive clinic visit rate established pursuant to this Subpart or to Subpart 86-1, services shall be reimbursed at the all-inclusive clinic visit rate.

    (2) for facilities without a cost-based all-inclusive rate, fee-for- service reimbursement is available under the Ordered Ambulatory Services Fee Schedule as referenced in paragraph (5) of subdivision (d) of this section for medical services ordered by the patient's attending physician.

    (i) For financial reporting purposes and statistical reporting purposes, facilities which provide services pursuant to subdivision (c) of this section must comply as appropriate with the standards established for said reporting in sections 86-1.3 or 86-4.3 of this Part.
     

    Effective Date: 
    Wednesday, January 3, 1990

    Section 86-4.36 REPEALED

    Effective Date: 
    Wednesday, March 2, 2011

    Section 86-4.37 - Computation of basic rates of payment for services provided to Medicaid patients by preferred primary care providers

    86-4.37 Computation of basic rates of payment for services provided to Medicaid patients by preferred primary care providers.

    (a) For payments made pursuant to this section and pursuant to section 86-1.11(h)(4) of this Part, for ambulatory care services to Medicaid patients, reimbursement shall be based upon a uniform payment schedule with a discrete price set forth in subdivision (c) of this section.

    (b) To be eligible to receive reimbursement pursuant to this section, facilities must be licensed pursuant to Article 28 of the Public Health Law, and certified to provide general medical services, and enter into a written agreement with the commissioner to provide the discrete services described in subdivision (c) of this section. These clinic services are defined on the basis of patient characteristics and provider services. Patient characteristics include age, sex and diagnoses. Provider services include diagnostic examinations, treatments, and ancillary services including significant diagnostic technologies. Diagnostic technologies are defined as: diagnostic nuclear medicine, diagnostic radiology, diagnostic ultrasound, cardiography, cardiac fluoroscopy, echocardiography, and neurological and neuromuscular procedures.

    (c) The seventy-one clinic services for which reimbursement shall be available at prices established pursuant to this section are:

    (1) Diagnostic Investigation Exams NEC - This visit shall be for any patient for the purpose of diagnostic investigation of problems attendant to physical medicine nowhere else categorized. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures and shall include necessary laboratory tests and the use of diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section. This visit shall only occur after a complete physical and history and shall include all other laboratory and diagnostic technology ancillaries that are required to complete the diagnostic investigation, This visit is not for the sole purpose of receiving an X-ray.

    (2) Diagnostic Investigation with Nuclear Imaging - This visit shall be for patients requiring diagnostic nuclear imaging including contrast imaging in order to complete a diagnostic investigation. This visit shall only occur after a complete physical and history and shall include all other laboratory and diagnostic technology ancillaries that are required to complete the diagnostic investigation, and any other services specified in the agreement referenced in subdivision (b) of this section. This visit is not for the sole purpose of receiving diagnostic nuclear medicine.

    (3) Diagnostic Investigation with Computerized Axial Tomography Imaging - This visit shall be for patients requiring a CAT scan in order to complete a diagnostic investigation. This visit shall only occur after a complete physical and history and shall include all other laboratory and diagnostic technology ancillaries that are required to complete the diagnostic investigation, and any other services specified in the agreement referenced in subdivision (b) of this section. This visit is not for the sole purpose of receiving a CAT scan.

    (4) Diagnostic Investigation with Magnetic Resonance Imaging - This visit shall be for patients requiring a MRI in order to complete a diagnostic investigation. This visit shall only occur after a complete physical and history and shall include all other laboratory and diagnostic technology ancillaries that are required to complete the diagnostic investigation, and any other services specified in the agreement referenced in subdivision (b) of this section. This visit is not for the sole purpose of receiving an MRI.

    (5) Management Exam NEC This visit shall be for any patient for the treatment of problems attendant to physical medicine nowhere else categorized. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (6) Medication Administration - This visit shall be for the sole purpose of administering drugs, injectables or renewal of a prescription with a concomitant brief provider assessment, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (7) Pediatric Annual Well Care Exam - This visit shall be for healthy children ages three years through seventeen years. This visit shall include a physical examination, developmental appraisal, nutritional assessment, hearing and vision screening, immunizations as indicated, selected laboratory tests such as hematocrit, blood counts, lead screening, TB Tine, urinalysis, VD for teenagers, on an appropriate schedule, and other services specified in the agreement referenced in subdivision (b) of this section.

    (8) Adult Annual Well Care Exam - This visit shall be for generally healthy patients over seventeen years of age. This visit shall include an annual physical examination, health education, nutritional assessment, blood pressure, hearing and vision screening, selected ancillaries when appropriate, including standard laboratory tests, chest x-rays, mammograms, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (9) First Prenatal - Routine - This visit shall be for females with a confirmed diagnosis of a normal pregnancy for the purpose of initiating a prenatal care treatment regimen. This visit shall include a complete physical examination and history, nutritional counseling, health education, appropriate treatment measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (10) First Prenatal - Complicated - This visit shall be for females with a confirmed diagnosis of a complicated pregnancy for the purpose of initiating a prenatal care treatment regimen. This visit shall include a complete physical examination and history, nutritional counseling, health education, appropriate treatment measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (11) Prenatal Management Revisit - Complicated - This visit shall be for females with a confirmed pregnancy and complications primarily related to pregnancy. This visit shall be for the purpose of providing ongoing prenatal care including a limited physical examination, nutritional counseling, health education, appropriate treatment and diagnostic measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (12) Post Partum Management - Complicated - This visit shall be for females with a confirmed pregnancy and complications primarily related to pregnancy. This visit shall be for the purpose of providing post partum care including a limited physical examination, nutritional counseling, health education, appropriate treatment and diagnostic measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (13) Prenatal Revisit Well Care - Normal - This visit shall be for female patients with a confirmed normal pregnancy. This visit shall be for the purpose of providing ongoing routine or uncomplicated prenatal care including a limited physical examination, nutritional counseling, health education, appropriate treatment and diagnostic measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (14) Post Partum Management - Normal - This visit shall be for females of all ages for the purpose of providing postpartum care following a normal pregnancy and delivery. This visit shall be for the purpose of post partum care including a limited physical examination, nutritional counseling, health education, appropriate treatment and diagnostic measures including laboratory ancillaries and the use of key technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (15) Neonatal and Congenital Diagnostic Investigation - This visit shall be for the purpose of investigation of problems of congenital disorders and newborns with medical conditions. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries and the use of diagnostic technologies, and other services specified in the agreement referenced in subdivision (b) of this section.

    (16) Management of Neonatal and Congenital Problem - This visit shall be for the treatment of problems associated with congenital disorders and newborns with problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries, and other services specified in the agreement referenced in subdivision (b) of this section.

    (17) Pediatric Well Care Exam - This visit shall be for healthy newborns and children under three years of age. This visit shall include a physical examination, developmental checks, health education for the parents as warranted, immunizations as indicated, selected laboratory tests and screening procedures such as PKU, sickle cell, lead, TB Tine, urinalysis, hematocrit, on an appropriate schedule, and other services specified in the agreement referenced in subdivision (b) of this section.

    (18) Female Reproductive Diagnostic Investigation - This visit shall be for the purpose of investigating female reproductive problems. This visit shall include a physical examination and history with appropriate diagnostic and treatment measures including laboratory ancillaries and the use of diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (19) Management of Female Reproductive Problems - This visit shall be for the treatment of female reproductive problems. This visit shall include a physical examination and history with appropriate diagnostic and treatment measures including appropriate laboratory ancillaries, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (20) Annual Gynecological Examination - This visit shall be for an annual gynecological examination. This visit shall include a physical examination and history, health education, a full pelvic examination, pap smear, appropriate laboratory ancillaries and any other services specified in the agreement referenced in subdivision (b) of this section.

    (21) Contraceptive Well Care Exam - This visit shall be for the purpose of providing contraceptives and family planning. This exam shall include a physical examination and history, health and family planning education, appropriate laboratory ancillaries and any other services specified in the agreement referenced in subdivision (b) of this section.

    (22) Ear, Nose and Throat Diagnostic Investigation - Adult - This visit shall be for patients over seventeen years of age for the purpose of investigation of ear and nasopharynx problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (23) Ear, Nose and Throat Diagnostic Investigation - Pediatric - This visit shall be for children up to and including seventeen years of age for the purpose of investigation of ear and nasopharynx problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (24) Management of Ear, Nose and Throat Problems - Adult - This visit shall be for patients over seventeen years of age for the treatment of problems of the ear and nasopharynx. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (25) Management of Ear, Nose and Throat Problems - Pediatric - This visit shall be for children up to and including seventeen years of age for the treatment of problems of the ear and nasopharynx. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (26) Ophthalmological Services - This visit shall be for any patient for eye examinations and treatment of eye disorders. This visit shall include appropriate ophthalmological procedures as well as any laboratory ancillaries or diagnostic technologies required, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (27) Respiratory Diagnostic Investigation - Adult - This visit shall be for patients over seventeen years of age for the purpose of investigation of respiratory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (28) Respiratory Diagnostic Investigation - Pediatric - This visit shall be for children up to and including seventeen years of age for the purpose of investigation of respiratory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (29) Management of Respiratory Problems - Adult - This visit shall be for patients over seventeen years of age for the treatment of respiratory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (30) Management of Respiratory Problems - Pediatric - This visit shall be for children up to an including seventeen years of age for the treatment of respiratory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (31) Systemic Infection Diagnostic Investigation - This visit shall be for the purpose of investigation of systemic infections. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (32) Management of Systemic Infections - This visit shall be for the treatment of systemic infections. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (33) Gastrointestinal Diagnostic Investigation - This visit shall be for for the purpose of investigation of gastrointestinal problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (34) Management of Gastrointestinal Problems - Adult - This visit shall be for patients over seventeen years of age for the treatment of gastrointestinal problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (35) Management of Gastrointestinal Problems - Pediatric - This visit shall be for children up to and including seventeen years of age for the treatment of gastrointestinal problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (36) Hepatobiliary Diagnostic Investigation - This visit shall be for for the purpose of investigation of hepatobiliary problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (37) Management of Hepatobiliary Problems - This visit shall be for the treatment of hepatobiliary problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (38) Genito-Urological Diagonstic Investigation - This visit shall be for male patients for the purpose of investigation of genito-urological and reproductive problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (39) Management of Genito-Urological Problems - This visit shall be for male patients for the treatment of genito-urological problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (40) Cardiac Diagnostic Investigation - This visit shall be for the purpose of investigation of cardiac and circulatory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (41) Management of Cardiac Problems - This visit shall be for the treatment of cardiac and circulatory problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (42) Endocrinal Diagnostic Investigation - This visit shall be for the purpose of investigation of diabetes and other metabolic problems and diseases of the endocrine system and pancreas. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (43) Management of Other Endocrinal Problems - This visit shall be for the treatment of other metabolic problems and diseases of the endocrine system and pancreas, excluding diabetes. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (44) Management of Diabetes - Pediatric - This visit shall be for children up to and including seventeen years of age for the treatment of problems associated with diabetes. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (45) Management of Diabetes - Adult - This visit shall be for patients over seventeen years of age for the treatment of problems associated with diabetes. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (46) Skin and Soft Tissue Diagnostic Investigation - This visit shall be for the purpose of investigation of skin and soft tissue injuries and problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (47) Inflammatory Muscular/Skeletal Diagnostic Investigation - This visit shall be for the purpose of investigation of muscular/skeletal problems including arthritis, rheumatism and other inflammatory/degenerative diseases of the joints and bones. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (48) Other Muscular/Skeletal Diagnostic Investigation - This visit shall be for the purpose of investigation of other muscular/skeletal problems, excluding arthritis, rheumatism and other inflammatory/degenerative diseases of the joints and bones. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures, and shall include necessary laboratory tests and the use of key diagnostic technologies, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (49) Rehabilitation Therapy - This visit shall be for therapy and treatment planning for any patient with diagnosed physical disabilities requiring physical, rehabilitation or occupational services. This visit shall include the necessary laboratory ancillaries to manage the course of treatment, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (50) Management of Skin and Soft Tissue Problems - This visit shall be for the treatment of skin and soft tissue injuries and problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (51) Management of Poisoning - This visits shall be for the treatment of problems associated with poisoning. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (52) Management of Inflammatory Muscular/Skeletal Problems - This visit shall be for the treatment of muscular/skeletal problems including arthritis, rheumatism and other inflammatory/degenerative diseases of the joints and bones. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (53) Management of Other Muscular/Skeletal Problems - This visit shall be for the treatment of other muscular/skeletal problems, excluding arthritis, rheumatism and other inflammatory/degenerative diseases of the joints and bones. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (54) Oncological Diagnostic Investigation - This visit shall be for the purpose of investigation of malignancies, excluding benign tumors and malignancies of the skin. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries and the use of diagnostic technologies, and other services specified in the agreement referenced in subdivision (b) of this section.

    (55) AIDS Diagnostic Investigation - This visit shall be for the purpose of investigation of the AIDS virus. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries and the use of diagnostic technologies, and other services specified in the agreement referenced in subdivision (b) of this section.

    (56) Other Hematological Diagnostic Investigation - This visit shall be for the purpose of investigation of other myeloproliferative diseases of the blood and blood forming organs, and anemias. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries and the use of diagnostic technologies, and other services specified in the agreement referenced in subdivision (b) of this section.

    (57) Therapeutic IV Push and Chemotherapy Injection - This visit shall be for therapy and treatment planning for any patient diagnosed with an oncological/hematological problem requiring a therapeutic regime, either IV push and/or chemotherapy injection to ameliorate symptoms, or reverse or cure malignancies, excluding benign tumors and malignancies of the skin, and myeloproliferative diseases of the blood and blood forming organs. Therapies will include IV push and chemotherapy injection. This visit shall include necessary laboratory ancillaries to manage the course of treatment, and any other services specified in the agreement references in subdivision (b) of this section.

    (58) Therapeutic Infusions - This visit shall be for therapy and treatment planning for any patient diagnosed with an oncological/hematological problem requiring a therapeutic regime of infusions, including blood product transfusions to ameliorate symptoms, or reverse or cure malignancies, excluding benign tumors and malignancies of the skin, and myeloproliferative diseases of the blood and blood forming organs. Therapies will include infusions including transfusions of blood products. This visit shall include necessary laboratory ancillaries to manage the course of treatment, and any other services specified in the agreement references in subdivision (b) of this section.

    (59) Therapeutic Radio Therapy - This visit shall be for therapy and treatment planning for any patient diagnosed with an oncological/hematological problem requiring a therapeutic regime of radio therapy to ameliorate symptoms, or reverse or cure malignancies, excluding benign tumors and malignancies of the skin, and myeloproliferative diseases of the blood and blood forming organs. Therapies will include radiation therapy or hyperthermia as an adjunct to radiation therapy. This visit shall include necessary laboratory ancillaries to manage the course of treatment, and any other services specified in the agreement references in subdivision (b) of this section.

    (60) Oncological Management - This visit shall be for the management of patients currently undergoing a therapeutic regime to ameliorate symptoms, or reverse or cure malignancies, excluding benign tumors and malignancies of the skin, and myeloproliferative diseases of the blood and blood forming organs. Therapies will include IV push and chemotherapy injection, infusions including blood product transfusions, and radiation therapy or hyperthermia as an adjunct to radiation therapy, and other services specified in the agreement referenced in subdivision (b) of this section. Patients need not receive therapy every visit. When the patient does not receive therapy, the visit shall include observation of the therapy's effects and the use of laboratory ancillaries necessary for managing and assessing the course of therapy.

    (61) Management of Anemias - Pediatric - This visit shall be for children up to and including seventeen years of age for the treatment of anemias. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries, and other services specified in the agreement referenced in subdivision (b) of this section.

    (62) Management of Anemias - Adult - This visit shall be for patients over seventeen years of age for the treatment of anemias. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (63) Management of AIDS - Pediatric - This visit shall be for children up to and including seventeen years of age for the treatment of AIDS. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (64) Management of AIDS - Adult - This visit shall be for patients over seventeen years of age for the treatment of AIDS. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (65) Management of Other Hematological Problems - This visit shall be for the treatment of other myeloproliferative diseases of the blood and blood form organs. This visit shall include a physical examination and history with appropriate treatment and diagnostic laboratory tests, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (66) Neurological and Psycho/Social Diagnostic Investigation - This visit shall be for the purpose of investigation of problems related to the central nervous system, medical conditions attendant to mental illness, substance abuse, and social problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries and the use of diagnostic technologies, and other services specified in the agreement referenced in subdivision (b) of this section.

    (67) Speech and Hearing Services - Adult - This visit shall be for patients over seventeen years of age for the purpose of an audiology examinations, and speech therapy and treatment planning, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (68) Speech and Hearing Services - Pediatrics - This visit shall be for children up to and including seventeen years of age for the purpose of an audiology examinations, and speech therapy and treatment planning, and any other services specified in the agreement referenced in subdivision (b) of this section.

    (69) Neurological and Psycho/Social Management - This visits shall be for the treatment of problems associated with the central nervous system, medical problems attendant to mental illness, substance abuse, and social problems. This visit shall include a physical examination and history with appropriate treatment and diagnostic measures including laboratory ancillaries, and other services specified in the agreement referenced in subdivision (b) of this section.

    (70) Counseling - This visit shall be for the primary purpose of providing supportive counseling, extended individual and family counseling, somatotherapy and health education to patients with diagnosed mental illness or substance abuse problems and any other service specified in the agreement referenced in subdivision (b) of this section. This visit shall not be for a medical work up although ancillaries necessary to monitor and provide treatment of the patient are included.

    (71) Diagnostic Investigation of Vascular Systems - This visit shall be for patients requiring radiologic exams of cardiac vessels and other arterial and various radiologic procedures. This visit shall only occur after a complete physical and history and shall include all other laboratory and diagnostic technology ancillaries that are required to complete the diagnostic investigation, and any other services specified in the agreement referred in Subdivision (b) of this section. This visit is not for the sole purpose of receiving diagnostic radiologic procedures.

    (d) The prices established pursuant to this section shall provide full reimbursement for the following:

    (1) physician services, nursing services, therapist services, technician services, nutrition services, health education services, psychosocial services, care coordination services and other related professional expenses directly incurred by the licensed facility;

    (2) space occupancy and plant overhead costs;

    (3) all ancillary services including laboratory tests, diagnostic tests including professional interpretations, and as detailed in the agreement described in subdivision (b) of this section;

    (4) all medical supplies, immunizations, and drugs directly related to the provision of the services as detailed in the agreement pursuant to subdivision (b) of this section; and

    (5) administrative personnel, business office, data processing, recordkeeping, housekeeping, and other related facility overhead expenses.

    (e) The price for each service shall be adjusted for regional differences in wage levels to reflect differences in labor costs for personnel providing direct patient care and clinic support staff.

    (f) During the initial rate period of provider participation, reimbursement to preferred primary care providers shall be no less than that which would be received pursuant to sections 86-4.1 through 86-4.31 of this Subpart.

    (g) The commissioner shall establish trend factors to project increases in the base year prices during the effective period of the reimbursement rates. The trend factors shall be developed using available price indices including elements of the United States Department of Labor consumer and producer price indices and special price indices developed by the commissioner for this purpose. The projected trend factors shall be updated on an annual basis, based upon current and available data.

    (h) Any clinic services not covered in subdivision (c) of this section shall be reimbursed based on the provider's established cost-based all inclusive visit rate pursuant to this Subpart.

    (i) In addition to complying with the requirements for recording and reporting financial and statistical data in sections 86-4.3, 86-4.4 and 86-4.5 of this Subpart, facilities designated as preferred primary care providers shall complete surveys of patient characteristics, treatment patterns, health care organization factors, costs associated with patient care, and other factors as undertaken from time to time by the commissioner.

    (j)(1) An adjustment may be made to payments described in this section for diagnostic and treatment centers designated as preferred primary care providers to support the facility's efforts to meet the health care needs of the community. Activities for which such adjustment may be available include, but are not limited to, patient access after routine hours of operation; effective operation of patient management record systems and appointment systems; assurance of continuity of patient care with the same practitioner or team of practitioners; other essential support for the scope of practice undertaken by preferred primary care diagnostic and treatment centers; effective quality assurance, utilization management and patient care management systems; outreach, case management and community intervention consistent with the designation; and participation in comprehensive programs to provide substance and alcohol treatment services.

    (2)(i) An adjustment may also be made to increase coverage of disproportionate share of bad debt and charity care losses of preferred primary care providers which acquired capital assets through financing from public authorities.

    (ii) Such adjustment shall be based on the unrecovered capital costs associated with the disproportionate share of bad debt and charity care, which shall be calculated by applying the capital component of the facility's Medicaid rate of payment for the rate period for which the allowance is being determined, to identified eligible visits as defined in section 86-4.12.

    (k) An adjustment shall be made to payments described in this section to cover the costs of primary medical malpractice insurance sufficient to meet the requirements of Section 91.1(a) of this Title for physicians employed by preferred primary care diagnostic and treatment centers.

    Effective Date: 
    Monday, December 28, 1992
    Doc Status: 
    Complete

    Section 86-4.38 - Computation of basic rates of payment for services provided to Medicaid patients by specialty clinics

    86-4.38 Computation of basic rates of payment for services provided to Medicaid patients by specialty clinics.

    (a) Notwithstanding other provisions of this Subpart or Subpart 86-1, rates of reimbursement for specialty services, including but not limited to hemo and peritonial dialysis and outpatient rehabilitative services, shall be calculated in the manner described in section 86-4.37(a) through (h). Rates of reimbursement for methadone maintenance treatment services shall be calculated in the manner described in section 86-4.39. Rates of reimbursement for day health care services provided to patients with acquired immune deficiency syndrome (AIDS) and other human immunodeficiency virus (HIV) related illnesses by freestanding ambulatory care facilities shall be calculated in the manner described in section 86-4.41. Such payment levels will be made available to providers who document in writing and through site inspection or records review that they are, in fact, organized and providing specialty services.

    (b) The criteria for recognition as a specialty service include but are not limited to: requirement for highly specialized staff, equipment or facilities; whether the facility presently provides the services to the population in need; whether the services may be provided safely and effectively on an outpatient basis; and whether the services are structured to address extensive and complex needs for patients with chronic or infectious medical conditions.

    (c) In addition to complying with the requirements for recording and reporting financial and statistical data in sections 86-4.3, 86-4.4 and 86-4.5 of this Subpart, facilities shall complete surveys of patient characteristics, treatment patterns, health care organization factors, costs associated with patient care, and other factors as undertaken from time to time by the Commissioner.
     

    Effective Date: 
    Thursday, April 22, 1993
    Doc Status: 
    Complete

    Section 86-4.39 - Computation of basic rates for methadone maintenance treatment services provided by freestanding ambulatory care facilities and hospital outpatient clinic services.

    86-4.39 Computation of basic rates for methadone maintenance treatment services provided by freestanding ambulatory care facilities and hospital outpatient clinic services.

    (a) For payments made pursuant to this section and pursuant to section 86-1.11(h)(5) of this Part, for methadone maintenance treatment services reimbursement shall be based upon a fixed weekly payment per recipient.

    (b) To be eligible to receive reimbursement pursuant to this section, facilities must have an operating certificate issued pursuant to Part 401 of this Title, and be certified to provide outpatient methadone maintenance treatment services.

    (c) The clinic services which shall be provided to be eligible for reimbursement according to the price as established by this section includes: urinalysis drug testing, dispensing of methadone, medical supervision and arranging for appropriate laboratory tests for the initial and annual physical examinations, preparation and monitoring of treatment plans, maintenance of patient medical histories, prescribing methadone dosage, counseling as prescribed in the patients' individual treatment plan, and maintenance of records.

    (d) The weekly price established pursuant to this section shall be reimbursement for the following, as required by New York State Office of Alcoholism and Substance Abuse Services in 10 N.Y.C.R.R. Part 1040:

    (1) physician services, nursing services, therapist services, technician services, nutrition services, health education services, psychosocial services, care coordination services and other related professional expenses directly incurred by the licensed facility;

    (2) space occupancy and plant overhead costs;

    (3) all ancillary procedures directly related to the provision of services with the exception of laboratory and diagnostic tests other than urinalysis testing;

    (4) all medical supplies and drugs directly related to the provision of services; and

    (5) administrative personnel, business office, data processing recordkeeping, housekeeping,and other related facility overhead expenses.

    (e) The methadone maintenance treatment service weekly price shall be established using 1986 cost and statistical data for the factors listed in subdivision (d) of this section reported by diagnostic and treatment centers and hospital based outpatient programs. Weekly visit utilization shall be based upon the average daily census information compiled by the New York State Office of Alcoholism and Substance Abuse Services. The price shall be trended forward in accordance with subdivision (f) of this section in a manner consistent with the rate period of the facility's other basic services. After the price has been trended forward, the price shall be increased by adding the product of the estimated statewide number of urinalysis tests per week per patient multiplied by the current Medicaid reimbursement fee for urinalysis toxicology screening.

    (f) The Commissioner shall establish trend factors to project increases in the price during the effective period of the reimbursement rates. The trend factors shall be developed using available price indices including elements of the United States Department of Labor consumer and producer price indices and special price indices developed by the Commissioner for this purpose. The projected trend factors shall be updated on an annual basis, based upon current and available data.

    (g) The Commissioner, in consultation with the New York State Office of Alcoholism and Substance Abuse Services, may add or delete health services from the methadone maintenance treatment services contained in subdivision (c) of this section, if the Commissioner finds that the inclusion or deletion of such services is appropriate based upon commonly accepted medical standards, current scientific or medical literature, or the results of properly conducted medical or scientific research. The Commissioner shall notify participating providers of such changes at least 60 days before such changes shall be effective.

    (h) When such an addition or deletion is made pursuant to subdivision (g) of this section, the price established pursuant to subdivision (e) of this section shall be adjusted based upon an estimate of the costs of such added or deleted services efficiently and economically provided by general hospitals or diagnostic and treatment services.

    (i) For financial reporting purposes and statistical reporting purposes, facilities which provide services pursuant to subdivision (c) of this section must comply as appropriate with the standards established for said reporting in sections 86-1.3 or 86-4.3 of this Part.
     

    Effective Date: 
    Thursday, November 19, 1992
    Doc Status: 
    Complete

    Section 86-4.40 - Computation of case-based rates of payment for licensed free-standing ambulatory surgery centers and hospital based ambulatory surgery services

    86-4.40 Computation of case-based rates of payment for licensed free-standing ambulatory surgery centers and hospital-based ambulatory surgery services.

    (a) Medicaid reimbursement for medically necessary ambulatory surgery services provided by licensed free-standing ambulatory surgical centers and hospital-based ambulatory surgery services shall be based upon a single payment schedule with a discrete price for each of the separate groupings of surgical procedures set forth in this section.

    (b) Reimbursement for ambulatory surgery services shall be based upon the Products of Ambulatory Surgery (PAS) classification system as defined in subdivision (o) of this section. A base price shall be established for each of the payment groups defined in the PAS classification. All procedures within the same payment group shall be reimbursed at a single discrete price.

    (c) Each base price shall be adjusted by a wage equalization factor and a space occupancy factor to reflect regional differences in the price of labor and space. The wage equalization factor shall be applied to the operating room and pre-operative and post-operative nursing personnel salary components of each base price.

    (d) Prices established pursuant to subdivision (b) of this section shall provide full reimbursement for applicable:
    (1) nursing services, technician services, and other related professional expenses directly incurred by the licensed facility;
    (2) drugs, biologicals, surgical dressings, supplies, splints, appliances and equipment directly related to the provision of the surgical procedures;
    (3) diagnostic or therapeutic items and services directly related to the provision of surgical procedures;
    (4) materials for anesthesia;
    (5) prosthetic and orthotic appliances provided during or integral to an ambulatory surgery procedure;
    (6) administrative personnel, business office, data processing, recordkeeping, housekeeping and other related facility overhead expenses;
    (7) space occupancy and plant overhead costs;
    (8) costs associated with graduate medical education programs involved in the provision of ambulatory surgery services; and
    (9) costs associated with hospital-based physicians, defined as salaried physicians, excluding interns and residents, engaged in direct provision of ambulatory surgical services can be included in a facility's payment rates upon appeal to the Department of Health. Such adjustments will be limited to the current schedule of surgical fees, as set forth in section 7.0 of the Medicaid Management Information System Provider Manual, Physicians (revised January, 1985). Copies of the Physicians Manual schedules may be obtained from the Department of Social Services, and are available for inspection and copying at the Department of Health Records Access Office, as indicated in subdivision (h) of this section.
    (e) The commissioner shall establish trend factors to project increases in the base year prices during the effective period of the reimbursement rate. To determine trend factors, cost elements shall be weighted based upon data for salaries, employee health and welfare expenses, nonpayroll administrative and general expense, nonpayroll household and maintenance expense, and nonpayroll professional care expense. Each weight shall be adjusted by one or more price indices. Included among these indices are elements of the United States Department of Labor consumer and producer price indices and special indices developed by the commissioner for this purpose.
    (f) The projected trend factors shall be updated on an annual basis, based upon then current and available data. The commissioner shall adjust annually subsequent trend factors based upon such update.
    (g) Dental procedures included in subdivision (o) of this section performed at facilities for patients requiring the use of an operating room with anesthesia will continue to be paid at current cost-based rates.
    (h) Reimbursement for physician services rendered in connection with the provision of ambulatory surgical services shall be in accordance with the Medicaid fee schedule set forth in Title 18 (Social Services) of the Official Compilation of Codes, Rules and Regulations of the State of New York at section 533.4 (18 NYCRR 533.4), as amended pursuant to chapter 904 of the Laws of 1984. Copies of the current schedule of fees, as set forth in section 7.0 of the Medicaid Management Information System Provider Manual, Physicians (revised January 1985), may be obtained from the Bureau of Program, Policy and Operations of the Division of Medical Assistance of the New York State Department of Social Services, 40 North Pearl Street, Albany, NY 12243. The current physicians' fee schedule is available for inspection and copying at the Department of Health, Records Access Office, 22nd Floor, Corning Tower Building, Governor Nelson A. Rockefeller Empire State Plaza, Albany, New York 12237-0042.
    (i) Reimbursement for durable medical equipment subsequently required as a result of the provision of ambulatory surgical services shall be in accordance with section 4.2 of the Medicaid Management Information System (MMIS) Provider Manual, Durable Medical Equipment, Medical and Surgical Supplies, Prosthetic and Orthotic Appliances (revised March 1984). Copies of the current durable medical equipment schedules may be obtained from the New York State Department of Social Services, and are available for inspection and copying at the Department of Health, Records Access Office, as indicated in subdivision (h) of this section.
    (j) Reimbursement for prosthetic and orthotic appliances subsequently required as a result of and necessitated by the provision of ambulatory surgical services shall be in accordance with Part 522 of Title 18 (Social Services) of the Official Compilation of Codes Rules and Regulations (18 NYCRR Part 522). Copies of current fee schedules for prosthetic and orthotic appliances, as contained in sections 4.6, 4.3 and 4.4, respectively, of the MMIS Provider Manual referenced in subdivision (g) of this section, may be obtained from the New York State Department of Social Services, and are available for inspection and copying at the Department of Health, Records Access Office, as indicated in subdivision (h) of this section.
    (k) For any procedure which is not an ambulatory surgical procedure:
    (1) facilities with a cost-based all-inclusive Medicaid clinic rate established pursuant to this Part or Subpart 86-1, shall be reimbursed at such rate; provided, however, that the provisions of subdivisions (h) through (j) of this section shall not apply and that the cost for services referred to in these subdivisions shall be considered fully reimbursed through payment of such clinic rate; and
    (2) for facilities without a cost-based all-inclusive Medicaid clinic rate established pursuant to this Part or Subpart 86-1, facility costs shall be reimbursed in accordance with section 6.2.5 of the Medicaid Management Information System (MMIS) Clinic Provider Manual, Fees for Hospital-Based Referred Ambulatory Use of the Operating Room (revised December 1984). Copies of the schedule may be obtained from the New York State Department of Social Services, and are available for inspection and copying at the Department of Health, Records Access Office, as indicated in subdivision (h) of this section.
    (l) Where multiple procedures are performed and they appear in more than one PAS group, payment pursuant to this section shall be based upon 100 percent of the group price for the highest priced procedure and 50 percent of the applicable group price for each additional procedure furnished in the same operative session.
    (m) Reserved.
    (n) Reserved.
    (o) The following table represents the Products of Ambulatory Surgery (PAS) classification system for which reimbursement is available according to group and group price as established in this section. The Products of Ambulatory Surgery classification system, developed by the New York State Department of Health, classifies ambulatory surgery procedures based upon similarities in patient and resource use characteristics. The table includes the PAS classification and PAS name as follows:

     

     

    PAS GROUP GROUP NAME
    PAS GROUP 1 Nerve Repair
    PAS GROUP 2 Eye Therapeutic
    PAS GROUP 3 Eye Repair
    PAS GROUP 4 Lens Remove/Replace
    PAS GROUP 5 Eye Laser Therapeutic
    PAS GROUP 6 Eye Muscle Repair
    PAS GROUP 7 Ear Repair
    PAS GROUP 8 Ear Therapeutic
    PAS GROUP 9 Nasal/Paranasal Therapeutic
    PAS GROUP 10 Rhino/Septo Plasty
    PAS GROUP 11 Tonsil/Adenoid Therapeutic
    PAS GROUP 12 Nasal/Tracheal Endoscope
    PAS GROUP 13 Thoracic Diagnostic/Therapeutic
    PAS GROUP 14 Vascular Diagnostic II
    PAS GROUP 15 Vascular Repair
    PAS GROUP 16 Vascular Diagnostic/Therapeutic
    PAS GROUP 17 UpperGI Diagnostic/Therapeutic
    PAS GROUP 18 LowerGI Diagnostic/Therapeutic
    PAS GROUP 19 Rectal Diagnostic/Therapeutic
    PAS GROUP 20 Hepatic Diagnostic/Therapeutic
    PAS GROUP 21 Hepatic Endoscopy
    PAS GROUP 22 Hernia Repair
    PAS GROUP 23 Cystoscope
    PAS GROUP 24 Urological Therapeutic
    PAS GROUP 25 Lithotripsy
    PAS GROUP 26 Male Genital Diagnostic
    PAS GROUP 27 Genito-Urinary Repair
    PAS GROUP 28 Male Genital Therapeutic
    PAS GROUP 29 Laparoscopy
    PAS GROUP 30 Oviduct Diagnostic/Therapeutic
    PAS GROUP 31 Gyn Diagnostic/Therapeutic
    PAS GROUP 32 Dilation and Curettage
    PAS GROUP 33 Soft Tissue Repair
    PAS GROUP 34 Bone Therapeutic
    PAS GROUP 35 Arthroscopy
    PAS GROUP 36 Bone Repair
    PAS GROUP 37 Soft Tissue Therapy
    PAS GROUP 38 Breast Diagnostic/Therapeutic
    PAS GROUP 39 Breast Repair
    PAS GROUP 40 Skin Diagnostic/Therapeutic
    PAS GROUP 41 Skin Repair
    PAS GROUP 42 Urological Diagnostic
    PAS GROUP 43 Oral Surgery
    PAS GROUP 44 STRB
    PAS GROUP 45 Eye Implant/Therapeutic (HIV)

     

    Effective Date: 
    Tuesday, November 4, 1997
    Doc Status: 
    Complete

    Section 86-4.41 - Computation of basic rates for day health care services provided by freestanding ambulatory care facilities to patients with acquired immune deficiency syndrome (AIDS) and other human immunodeficiency (HIV) related illnesses

    86-4.41 Computation of basic rates for day health care services provided by freestanding ambulatory care facilities to patients with acquired immune deficiency syndrome (AIDS), other human immunodeficiency virus (HIV) related illnesses and other high-need populations that, regardless of their HIV status and in the discretion of the commissioner, would benefit from receiving adult day health care services.

    Effective April 1, 1994 and thereafter, reimbursement for adult day health care services that are provided to registrants with acquired immune deficiency syndrome (AIDS), other human immunodeficiency virus (HIV) related illnesses and, effective April 1, 2017, that are provided to registrants who are otherwise considered at the discretion of the commissioner to be part of a high-need population that, regardless of their HIV status, would benefit from receiving these adult day health care services shall be established pursuant to this section.

    (a) For payments made pursuant to this section for day health care services rendered to patients who have AIDS or HIV-related illness and other high-need registrants, reimbursement shall be a single price per visit, with not more than one reimbursable visit per day per patient. For 1993 an initial price shall be determined taking into consideration reasonable projections of necessary costs, and the costs and statistics contained in proposed annual budgets for this service as defined in section 759.1(d) of this Title, including, but not limited to, utilization, staffing and salaries. For subsequent rate periods the price established pursuant to this section shall be adjusted by the trend factor described in subdivision (e) of this section after considering the actual allowable expenditures and statistics for the year which ended 15 months prior to the rate period.

    (b) To be eligible to receive reimbursement pursuant to this section, a freestanding ambulatory care facility must be certified to provide general medical services and day health care services for AIDS/HIV patients and, effective April 1, 2017, to other high-need registrants.

    (c) The price established pursuant to this section shall be full reimbursement for the following:

    (1) physician services, nursing services, and other related professional expenses directly incurred by the licensed facility, including the provision of triage or sick call services;

    (2) space occupancy and plant overhead costs;

    (3) administrative personnel, business office, data processing, recordkeeping, housekeeping, food services, transportation, and other related facility overhead expenses;

    (4) all ancillary services described in section 759.8 of this Title and laboratory tests and diagnostic x-ray services appropriate to the level of primary medical care required by the patient;

    (5) all medical supplies, immunizations, and drugs directly related to the provision of services.

    (d) Components of the price may be adjusted for service capacity, urban or rural location, and for regional differences in wage levels, space occupancy, and facility overhead costs, by comparing anticipated utilization and costs with actual experiences. The downstate region shall be defined as the counties of Putnam, Rockland, Westchester, Bronx, Kings, New York, Queens, Richmond, Nassau, and Suffolk and the upstate region shall be defined as all remaining counties in the State.

    (e) The commissioner shall establish trend factors to project increases in prices for the effective period of the reimbursement rates. The trend factors shall be developed using available price indices including elements of the United States Department of Labor consumer and producer price indices and special price indices developed by the Commissioner for this purpose. The projected trend factors shall be updated on an annual basis, based upon current and available data.

    Effective Date: 
    Wednesday, June 14, 2017
    Doc Status: 
    Complete

    SubPart 86-5 - Long-term Home Health Care Programs

    Effective Date: 
    Wednesday, March 11, 1992
    Doc Status: 
    Complete
    Statutory Authority: 
    Public Health Law, Sections 3612(4), 3614

    Section 86-5.1 - Definitions

    Section 86-5.1 Definitions. As used in this Subpart:

    (a) The term long-term home health care program (LTHHCP) shall mean an organization defined in article 36 of the Public Health Law possessing a valid operating certificate or valid certificate of approval issued by the State Commissioner of Health to operate a LTHHCP.

    (b) The term AIDS Home Care Program (AHCP) shall mean a LTHHCP possessing a valid operating certificate or valid certificate of approval issued by the State Commissioner of Health to operate an AHCP.

    (c) The term related organization shall be defined as any entity which the LTHHCP is in control of or is controlled by, either directly or indirectly, or where an association of material interest exists in an entity which provides goods and/or services to the LTHHCP, or any entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption.
     

    Effective Date: 
    Monday, November 6, 1989
    Doc Status: 
    Complete

    Section 86-5.2 - Financial and statistical data required

    86-5.2 Financial and statistical data required.

    (a) Each LTHHCP shall complete and file, with the New York State Department of Health and/or its agent, annual financial and statistical report forms supplied by the department and/or its agent. LTHHCP certified for title XVIII of the Federal Social Security Act (Medicare) shall use the same fiscal year for title XIX of the Federal Social Security Act (Medicaid) as is used for title XVIII. All LTHHCP's must report their operations from January 1, 1978 forward on a calendar-year basis. For a LTHHCP also certified as an AHCP, a combined annual financial and statistical report shall be submitted for both programs.

    (b) Based on the financial report, the facility will be required to convert all allowable costs to a visit/hourly cost basis for the services it will be providing.

    (c) All required financial and statistical reports shall be submitted to the department. Such reports shall indicate the time period within which such report shall be filed.

    (d) In the event an LTHHCP fails to file the required financial and statistical reports on or before the due dates, or as the same may be extended by the department, the State Commissioner of Health shall reduce the current rate paid by state governmental agencies by two percent for a period beginning on the first day of the caledar month following the due date of the required reports and continuing until the last day of the calendar month in which the required reports are filed.

    (e) In the event that any information or data which an LTHHCP has submitted to the State Department of Health on required reports, budgets or appeals for rate revisions, intended for use in establishing rates, is inaccurate or incorrect, whether by reason of subsequent events or otherwise, such agency shall forthwith submit to the department a correction of such information or data which meets the same certification requirements as the document being corrected. Failure to do so shall subject the LTHHCP to the provisions of subdivision (d) of this section.

    (f) A cost report shall be filed in accordance with this section by each new program with budget based rates for the first six-month period during which the program has achieved 75 percent of the approved patient case load. This report shall be filed and properly certified within 120 days following the end of the six-month period covered by the report. All new programs shall follow the requirements of subdivision (a) of this section, and complete and file a report at the end of the first full calendar year after admission of its first patient. Facilities that have filed cost reports in accordance with the provisions of this subdivision shall be deemed to have adequate cost experience for the purpose of establishing a prospective cost-based rate.

    (g) If the financial and statistical reports required by this Subpart are determined to be incomplete, inaccurate or incorrect, the LTHHCP will have 30 days from date of receipt of notification to provide the corrected or additional data. Failure to file the corrected or additional data within 30 days, or within such period as extended by the Commissioner, will result in application of subdivision (d) of this section.

    (h) Each LTHHCP shall file with the New York State Department of Health a complete copy of the Department of the Treasury, Internal Revenue Service Form 990, for that facility. The Form 990 shall be submitted to the department no later than 30 days following the annual filing with the Internal Revenue Service. Failure to submit the Form 990 shall result in application of the provisions set forth in subdivision (d) of this section.
     

    Effective Date: 
    Thursday, February 25, 1993
    Doc Status: 
    Complete

    Section 86-5.3 - Patient assessment

    86-5.3 Patient assessment.

    (a) Long-term home health care program participation. The direct costs for patient assessments and reassessments to the LTHHCP shall be included in the administrative costs of the LTHHCP and shall be included in the program's conversion of its cost report to an hourly or visit cost basis. These costs shall be limited to LTHHCP staff participation in the patient assessment.

    (b) The cost of hospital/RHCF staff participating in patient assessment and discharge planning is included in the Medicaid rate of the facility and may not be added to the costs of the long-term home health care program.

    (c) The cost of staff of the local social services district may not be included in the cost of the patient assessment.

    (d) Physician participation. (1) If the patient is in a hospital/RHCF and the physician is not on the staff of that facility, reimbursement for the physician's initial assessment is included in his visit fee in accordance with the Medicaid fee schedule.

    (2) If the patient is in the community:

    (i) and the assessment takes place in a clinic, reimbursement for the initial assessment is included in the clinic rate for medical or social care provided;

    (ii) and the assessment takes place in the home, reimbursement for the initial assessment is included in the physician's home visit fee;

    (iii) and the assessment takes place in the nonfacility-related physician's office, reimbursement for the initial assessment is included in the physician's office visit fee.

    (e) Initial assessments for Medicaid patients shall be conducted only with authorization of the local social services district unless arrangements for patient admission have been made pursuant to section 3616 of the State Public Health Law.

    (f) If an assessment of the person's needs demonstrates that he/she requires services the payment for which would exceed the monthly maximum, but it can be reasonably anticipated that total expenditures for required services for such person will not exceed such maximum calculated over a one-year period, the social services official may authorize payment for such services.

    (g) If a change in the patient's level of care occurs between required patient assessment periods, the LTHHCP must formally notify the local social services district with justification for change. A new plan of care must be submitted in writing to the local social services district for their review and approval.

    (h) If the patient requires unanticipated services but not a change of level of care between assessment periods, the program may provide such services if:

    (1) the patient's budget is below the 75-percent ceiling and/or there are accrued savings and the costs of the needed services are equal to or less than 10 percent of the current budget for the services provided by the program; or

    (2) the additional services exceed the 75-percent ceiling and there is not an accrued savings, providing that the additional cost does not exceed the patient's budget by more than 10 percent. This contingency provision may only be used when it can be reasonably anticipated that total expenditures for required services for such person will not exceed such maximum calculated over a one-year period.
     

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    Section 86-5.4 - Generally accepted accounting principles

    86-5.4 Generally accepted accounting principles. The completion of the financial and statistical report forms shall be in accordance with generally accepted accounting principles as applied to the LTHHCP, unless the reporting instructions authorize specific variation in such principles.

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    Section 86-5.5 - Accountant's certification

    86-5.5 Accountant's certification. The financial and statistical reports shall be certified by an independent licensed public account or an independent certified public accountant.

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    Section 86-5.6 - Certification by operator or officer

    86-5.6 Certification by operator or officer.

    (a) The financial and statistical reports shall be certified by the operator of a proprietary medical facility, an officer of a voluntary medical facility or the public official responsible for the operation of a public medical facility.

    (b) The form of the certification required in subdivision (a) of this section shall be as prescribed in the annual fiscal and statistical report forms provided by the State Commissioner of Health.
     

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    Section 86-5.7 - Audits

    86-5.7 Audits.

    (a) All fiscal and statistical records and reports shall be subject to audit. In this respect, any rate of payment certified by the State Commissioner of Health based on the initial submission of base-year data and reports will be construed to represent a provisional rate until such audit is performed and completed, at which time such rate or adjusted rate will be construed to represent the final rate. In addition to verifying costs as reports, this audit will determine if the cost per visit or hour presented by the provider have, in fact, been those used in monthly chart billings.

    (b) Subsequent to the filing of required fiscal and statistical reports, field audits shall be conducted of the records of LTHHCP in a time and manner to be determined by the department.

    (c) The required fiscal and statistical reports shall be subject to audit for a period of six years from the date of their filing with the department. This limitation shall not apply to situations in which fraud may be involved.

    (d) Upon completion of the audit, the LTHHCP shall be afforded a closing conference. The LTHHCP may appear in person or by anyone authorized in writing to act on behalf of the LTHHCP. The LTHHCP shall be afforded an opportunity at such conference to produce additional documentation in support of any modifications requested in the audit.

    (e) The LTHHCP shall be provided with the final audit report, the rate computation sheet and any resulting revision of the rate of reimbursement, which shall be final unless, within 30 days of receipt of the final audit report, the long-term home health care program initiates a bureau review of such final audit report by notifying the Division of Health Care Financing, by registered or certified mail, detailing the specific items of the audit report with which the provider disagrees and such other material as the provider wishes to submit in its behalf, and forwarding all material documentation in support of the LTHHCP's position.

    (f) The LTHHCP shall be notified in writing of the determination of the controverted items of the final audit report, including a statement of the reasons for such adjustments and the appropriate citation to applicable law, regulation or policy. The rate as adjusted in accordance with the determination of the bureau review shall be final, except that the LTHHCP may, within 30 days of receipt of the determination of the bureau review, initiate a hearing to refute those items of the audit report adverse to the interests of the LTHHCP presenting a factual issue by serving on the commissioner, by certified or registered mail, a notice containing a statement of the legal authority and jurisdiction under which the hearing should be held, a reference to the particular sections of the statutes and rules involved, and a statement of the controverted items of the audit report and bureau determination, together with copies of any documentation relied on by the LTHHCP in support of its position.

    (1) Upon receipt of such notice, the commissioner shall:

    (i) designate a hearing officer to hear and recommend;

    (ii) establish a time and place for such hearing; and

    (iii) notify the LTHHCP of the time and place of such hearing at least 15 days prior thereto. The issues and documentation presented by the LTHHCP at such hearing shall be limited to the factual issues and documentation presented at the bureau review.

    (2) The final audit report shall be presumptive evidence of its content. The burden of proof at any such hearing shall be upon the LTHHCP to prove by substantial evidence that the items therein contained are incorrect.

    (3) The hearing shall be conducted in conformity with section 12-a of the Public Health Law and the State Administrative Procedure Act.

    (4) At the conclusion of the hearing, the LTHHCP may submit memoranda on any legal issues which it deems relevant to the proceeding. Such memoranda shall become part of the official record of hearing.

    (g) Rate revisions resulting from the procedure set forth in this section shall be made retroactive to the period or periods during which the rates based on the periods audited were established.
     

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    Section 86-5.8 - Patient visits/hourly rate

    86-5.8 Patient visits/hourly rate.

    (a) A patient visit or an hourly rate are the units of measure by which an LTHHCP may bill for services provided.

    (b) Nursing, therapeutic and related services will be billed per visit.

    (c) Home health aides, personal care aides, homemaker and housekeeper services will be billed on an hourly basis.

    (d) The hourly/visit rate will include an amount for the indirect costs of the LTHHCP as defined in section 86-5.17 of this Subpart.

    (e) No provider of an LTHHCP shall establish charges for such program in excess of the higher of those rates established pursuant to section 3614 of the Public Health Law and rules and regulations adopted pursuant to section 3612 of the Public Health Law (Medicaid) or subchapter XVIII of the Federal Social Security Act (Medicare).
     

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    Section 86-5.9 - Determining patient eligibility

    86-5.9 Determining patient eligibility.

    (a) At the time of the initial assessment, and at the time of each subsequent assessment performed for a long-term home health care program, or more often if the person's need requires it, the local social services district shall establish a monthly budget in accordance with which payment shall be authorized.

    (1) The budget shall include all of the services to be provided in accordance with the coordinated health plan of care by the long-term home health care program.

    (2) Total monthly expenditures made for a long-term home health care program for an individual who is the sole member of his/her household in the program shall not exceed a maximum of 75 percent of the average monthly rates payable for nursing home services or health-related services in an intermediate care facility in the social services district, whichever is the appropriate level for the individual. Total monthly expenditures made for a long-term home health care program for two members of the same household shall not exceed a maximum of 75 percent of the average monthly rates payable for both members of the household for nursing home services or health-related services in an intermediate care facility in the social services district, whichever is the appropriate level for each person.

    (3) When the monthly budget prepared for an individual who is the sole member of his/her household in the program is for an amount less than 75 percent of monthly rates payable for nursing home services or health-related services, a "credit" may be accrued in behalf of the individual. If a continuing assessment of the individual's needs demonstrates that he/she requires increased services, the local social services department may authorize any amount accrued during the previous 12 months over the 75-percent maximum. When the monthly budget prepared for two members of the same household is for an amount less than 75 percent of monthly rates payable for nursing home services or health-related services, "credit" may be accrued in behalf of the household. If a continuing assessment of the household's needs demonstrates that he/she/they require increased services, the local social services department may authorize any amount accrued during the previous 12 months over the 75-percent maximum.

    (4) When the monthly budget prepared for an individual or a household is for an amount less than 75 percent of monthly rates payable for nursing home services or health-related services, and the continuing assessment of the person's needs demonstrates that he/she/they require increased services in an amount less than 10 percent of the prepared monthly budget, but totaling no more than 75 percent of the monthly rates payable for nursing home services or health-related services, the long-term home health care program may provide such services without prior approval of the local department of social services.

    (5) If an assessment of the person's or household's needs demonstrates that he/she/they require services, the payment for which would exceed such monthly maximum, but it can be reasonably anticipated that total expenditures for required services for such person or household will not exceed such maximum calculated over a one-year period, the social services official may authorize payment for such services.

    (b) If a joint assessment by the local social services district and the provider of services indicates that the maximum expenditure permitted under paragraph (4) of this subdivision is not sufficient to provide long-term home health care program (LTHHCP) services to individuals with special needs, social services officials may authorize maximum monthly expenditures for such individuals, not to exceed 100 percent of the average skilled nursing or health-related facility rate established for that district (see 367-c(3-a) of the Social Services Law). In addition, if a continuing assessment of a person with special needs demonstrates that he/she requires increased services, a social services official may authorize the expenditure of any amount which has accrued under this section during the previous 12 months as a result of the expenditures for a person participating in the LTHHCP not having exceeded such maximum. If an assessment of a person with special needs demonstrates that he/she requires increased services, the payment for which would exceed such monthly maximum, the social services official may authorize payment for such services if it can reasonably be anticipated that the total expenditures for the required services for such a person will not exceed the maximum calculated over a one-year period.

    (1) As used in this subdivision, the term person with special needs means a person for whom a plan of care has been developed (see subdivision (2) of section 367-c of the Social Services Law): (i) who needs care including but not limited to respiratory therapy, tube feeding, decubitus care or insulin therapy which cannot be appropriately provided by a provider of personal care services as defined in section 505.14(d) of this Part;

    (ii) who has one or more of the following conditions: a mental disability (see section 1.03 of the Mental Hygiene Law), acquired immune deficiency syndrome, or dementias, including Alzheimer's disease.

    (2) The number of persons with special needs for whom a social services official may authorize payment for services pursuant to this paragraph is limited to 25 percent of the total number of LTHHCP clients which a social services district is authorized to serve, provided that in any district containing a city having a population of one million or more, such limit is 15 percent.

    (3) In the event that a district reaches the limitation specified in this subdivision, the social services official may, upon approval by the social services commissioner, authorize payment for services pursuant to this subdivision for additional persons with special needs.

    (4) The social services official must seek approval for authorization to serve additional persons with special needs by submitting to the State Commissioner of Social Services a written request which demonstrates that the provisions of this paragraph have

    (i) met the needs of individuals who could not otherwise be served through the LTHHCP;

    (ii) diverted clients from residential health care facility admission; or

    (iii) permitted the admission of clients on alternate care status into the LTHHCP.

    (c) The provisions of this section shall not apply to patients diagnosed with Acquired Immune Deficiency Syndrome as defined by ICD-9 codes 042, 043 and 044 if such patient is receiving services through a designated AHCP.
     

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    Section 86-5.10 - Computation of average monthly nursing home rates

    86-5.10 Computation of average monthly nursing home rates.

    (a) Computation of average monthly nursing home service (SNF) or health related services in an intermediate care facility (HRF) rates used to establish patient eligibility caps pursuant to section 86-5.9 of this Subpart shall be based on average Medicaid rates for each social services district for SNF or HRF levels of care weighted by patient days.

    (b) Average monthly rates calculated pursuant to subdivision (a) of this section shall be based on skilled nursing facility or health related facility rates in effect on January 1, 1992 trended forward to the rate year by the trend factor for the facilities in each social service district. Such trend factors shall be established pursuant to section 86-2.12 of this Part. The average monthly rates established pursuant to subdivision (a) of this section will be adjusted annually utilizing the latest January 1, 1992 rate available, including any rate adjustments made prior to the calculation of the patient eligibility caps for the following year. No other adjustments will be made to the average monthly rates established pursuant to subdivision (a) of this section.
     

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    Wednesday, December 27, 1995
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    Section 86-5.11 - Computation of individual hourly or per-visit service rate

    86-5.11 Computation of individual hourly or per-visit service rate.

    (a) Individual service rates, except for rates established pursuant to section 86-1.46(b) of this Subpart, shall be computed on the basis of allowable fiscal and statistical data submitted by the LTHHCP. The computed rates shall be all-inclusive rates, taking into consideration total allowable costs.

    (b) To the allowable basic rate based on actual LTHHCP cost, there shall be added a factor to adjust allowable costs during the effective period of the cost-based reimbursement rate. Such adjustments shall not be made to rates based on budgeted costs. This adjustment shall be determined as follows:

    (1) The elements of a long-term home health care program's cost shall be weighted based upon data for the following categories:

    (i) salaries;

    (ii) employee health and welfare expense;

    (iii) nonpayroll administrative and general expense;

    (iv) nonpayroll housekeeping and maintenance expense; and

    (v) nonpayroll professional care expense.

    (2) Each weight shall be adjusted by the appropriate price index for each category noted in paragraph (1) of this subdivision.

    (3) Geographic differentials may be established, where appropriate.
     

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    Monday, November 6, 1989
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    Section 86-5.12 - Cost guidelines for reimbursement purposes

    86-5.12 Cost guidelines for reimbursement purposes.

    (a) For the purpose of promulgating cost-based rates or rates based on budget, the department shall establish regional guidelines to be applied to the rate for each service to be provided. The cost guidelines shall be computed on a regional basis and based on the most recent annual cost data available to the department. For this purpose, LTHHCPs shall be grouped on the following basis:

    (1) Downstate: Putnam, Rockland, Westchester, Nassau, Suffolk, Kings, New York, Richmond, Queens and Bronx Counties.

    (2) Upstate: All other New York State counties.

    (b) The cost guidelines shall be established by:

    (1) calculating a group average cost;

    (2) centering the cost of any provider whose costs are not between 75 percent and 125 percent of the group average by raising or lowering the provider's cost, as appropriate, to the 75-percent and 125-percent limits;

    (3) recalculating the group average; and

    (4) multiplying the recalculated group average by 110 percent.

    (c)(1) For the purposes of review of initial rates based on budget, the cost guidelines shall be 115 percent of the recalculated group average cost.

    (2) If the rate based on cost or budget is at or below the cost guideline, such a rate shall be promulgated.

    (3) If the initial rate based on budget is in excess of the cost guideline, the department shall contact the LTHHCP prior to promulgation of the initial rate and determine if the rate is justified based on a written submission by the LTHHCP. If the department determines that the initial rate based on budget in excess of the guidelines is justified, the department shall promulgate such a rate for the applicable rate period. If the department determines that the initial rate based on budget in excess of the cost guideline is not justified, a rate set at the guideline amount shall be promulgated for the applicable rate period.

    (d)(1)(i) If the rate based on cost is in excess of the cost guideline, a rate set at the actual cost shall be promulgated. For each rate year, within 90 days of notification of the rate, the LTHHCP may submit written documentation justifying a rate in excess of the cost guideline. If a program whose cost-based rates exceed the cost guideline fails to submit written documentation justifying the rate within 90 days of notification of the rate, that program's rates which exceed the guideline shall revert to the guideline level on a retrospective basis.

    (ii) The written documentation submitted by a LTHHCP may indicate what conditions have resulted in a rate in excess of the cost guideline or describe what steps the LTHHCP shall take in pursuing a less expensive alternative way of delivering the service, or both.

    (2) If the department determines that the written documentation justifies a rate based on cost in excess of the guideline, such a rate shall remain at the actual cost amount for the applicable rate year only.

    (3) If the department determines that the written documentation does not justify a rate based on cost in excess of the guideline amount, the promulgated rate shall revert to the guideline amount on a retrospective basis.

    (4)(i) If the written documentation outlines steps to be taken by the LTHHCP in pursuing a less expensive alternative way of delivering a service, the LTHHCP shall be required to submit an application for prospective revision of a rate. The promulgated rate shall remain as it is promulgated pursuant to this subdivision until the rate is revised pursuant to the department's written approval of the LTHHCP's application for revision of the rate.

    (ii) A justification which outlines a plan of action to be taken by the LTHHCP must contain a time frame within which that plan of action shall be implemented. The LTHHCP can use such a justification only once and cannot use such a justification to justify rates in excess of the cost guideline in rate years which do not fall within the specified time frame for implementation of the plan of action.

    (5) In making determinations pursuant to this subdivision, the commissioner shall consider generally applicable factors, including but not limited to:

    (i) allowable costs;

    (ii) geographical differences in elements of cost;

    (iii) geographical differences in availability and cost of personal services;

    (iv) economic factors in the area in which the LTHHCP is located;

    (v) factors associated with program capacity, patient census, and service to special populations; and

    (vi) the need for incentives to improve services and institute economies.

    (e) The department shall establish a cap on reimbursable base year administrative and general costs equal to 30% of total reimbursable base year operational costs of a provider of services, excluding a provider of services reimbursed on an initial budget basis, and a new provider, excluding changes in ownership or changes in name, who begins operations in the year prior to the year which is used as a base year in determining rates of payment. The cap on administrative and general costs shall be applied after the application of the cost guidelines described in this section.

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    Tuesday, December 20, 1994
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    Section 86-5.13 - Adjustments to provisional rates based on errors

    86-5.13 Adjustments to provisional rates based on errors.

    (a) Errors resulting from submission of fiscal and statistical information by a LTHHCP may be corrected if brought to the attention of the State Commissioner of Health within 120 days of receipt of the commissioner's initial rate computation sheets. Errors on the part of the State Department of Health resulting from the rate computation process may be corrected if brought to the attention of the commissioner within 120 days of receipt of the commissioner's initial rate computation sheet. Subsequent errors on the part of the State Department of Health resulting from the revision of a rate may be corrected if brought to the attention of the commissioner within 30 days of receipt of the commissioner's revised rate computation sheet. In no event, however, shall a facility have less than 120 days from receipt of the initial rate computation sheets to bring errors to the attention of the commissioner.

    (b) Rate appeals pursuant to this section, if not commenced within 120 days of receipt of the commissioner's initial rate computation sheet, may be initiated at time of audit. Such rate appeals shall be recognized only to the extent that they are based upon errors in the cost and/or statistical data submitted by the LTHHCP or, in the case of a governmental facility, by the sponsor government, or errors made by the Department of Health.
     

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    Section 86-5.14 - Revisions in certified rates

    86-5.14 Revisions in certified rates.

    (a) The State Commissioner of Health may consider only those applications for revisions of certified rates which are based on:

    (1) six-month cost reports filed pursuant to subdivision (e) of section 86-5.2 of this Subpart. Such rate shall become effective on the first day of the six-month period referred to in section 86-5.2(f) of this Subpart;

    (2) errors made by the department in the rate calculation process and errors in data submitted by a medical facility which have been brought to the attention of the commissioner within the time limits prescribed in section 86-5.13 of this Subpart;

    (3) significant increases in the overall operating costs of the LTHHCP resulting from the implementation of additional programs, staff or services specifically mandated for the program by the commissioner;

    (4) requests for waivers of any provisions of this Subpart for which waivers may be granted by the commissioner as prescribed in specific sections; and

    (5) changes in the method of providing services which result in a lower overall cost for the services provided.

    (b) An application by a LTHHCP for review of a certified rate is to be submitted on forms provided by the department and shall set forth the basis for the appeal and issues of fact. Documentation shall accompany the application, where appropriate, and the department may request such additional documentation as determined necessary. An application based on error shall be submitted within the time limit set forth in section 86-5.13 of this Subpart. The commissioner shall act upon properly documented applications for rate appeals within one year of the end of the 120-day period referred to in section 86-5.13(a) of this Subpart or the receipt of the applications, whichever date is later. In the event the department requests additional documentation, the one-year time limit shall be extended for a mutually agreed upon time period for receipt of the documentation established by the commissioner in conjunction with the LTHHCP. The deadline will be set according to the nature and quantity of documentation necessary.

    (1) The affirmation or revision of the rate upon such staff review shall be final, unless within 30 days of its receipt a hearing is requested, by registered or certified mail, before a rate review officer on forms supplied by the department. The request shall contain a statement of the factual issues to be resolved. The facility may submit memoranda on legal issues which it deems relevant to the appeal.

    (2) Where the rate review officer determines that there is not factual issue, the request for a hearing shall be denied and the facility notified of such determination. No administrative appeals shall be available from this determination. The rate review officer, where he/she determines that there is factual issue, shall issue a notice of hearing establishing the date, time and place of the hearing and setting forth the factual issues as determined by the officer. The hearing shall be held in conformity with the provisions of Public Health Law, section 12-a, and the State Administrative Procedure Act.

    (3) The recommendation of the rate review officer shall be submitted to the Commissioner of Health for final approval or disapproval and recertification of the rate where appropriate.

    (c) Any modified rate certified under paragraphs (3) and (5) of subdivision (a) of this section shall be effective on the first day of the month in which the respective change is operational.

    (d) In reviewing appeals for revisions to certified rates, the commissioner may refuse to accept or consider an appeal from a LTHHCP:

    (1) providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council;

    (2) operated by the same management when it is determined by the department that this management is providing an unacceptable level of care as determined after review by the State Hospital Review and Planning Council in one of its facilities;

    (3) where it has been determined by the commissioner that the operation is being conducted by a person or persons not properly established in accordance with the Public Health Law; or

    (4) where a fine or penalty has been imposed on the facility and such fine or penalty has not been paid.

    In such instances, the provisions of subdivision (c) of this section shall not be effective until the date the appeal is accepted by the commissioner.

    (e) Any LTHHCP determined after review by the State Hospital Review and Planning Council to be providing an unacceptable level of care shall have its current reimbursement rates reduced by 10 percent as of the first day of the month following 30 days after the date of the determination. This rate reduction shall remain in effect for a one-month period or until the first day of the month following 30 days after a determination that the level of care has been approved to an acceptable level, whichever is longer. Such reductions shall be in addition to any revision of rates based on audit exceptions.

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    Section 86-5.15 - Rates for LTHHCP without adequate cost experience

    86-5.15 Rates for LTHHCP without adequate coat experience.

    (a) This subdivision shall apply where the fiscal and statistical data of the facility are unavailable through no fault of the provider or its agents, and due to circumstances beyond its control, or where there is a new facility without adequate cost experience as set forth in section 86-5.2 of this Subpart.

    (b) The rates certified for such LTHHCH's as set forth in subdivision (a) of this section shall be determined on the basis of generally applicable factors, including but not limited to the following:

    (1) cost guidelines as defined in section 86-5.12 of this Subpart; and

    (2) allowable costs as defined in section 86-5.17 of this Subpart.

    (c) All rates of reimbursement certified pursuant to this section will be subject to audit pursuant to section 86-5.7 of this Subpart.
     

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    Section 86-5.16 - Less expensive alternatives

    86-5.16 Less expensive alternatives. Reimbursement for the cost of providing services may be the lesser of the actual costs incurred or those costs which could reasonably be anticipated if such services had been provided by operation of joint central services or use of facilities or services which could have served effective alternatives or substitutes for the whole or any part of such services.

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    Section 86-5.17 - Allowable costs

    86-5.17 Allowable costs.

    (a) To be considered as allowable in determining reimbursement rates, costs shall be properly chargeable to necessary patient care. Except as otherwise provided in this Subpart, or in accordance with specific determination by the commissioner, allowable costs shall be determined by the application of the principles of reimbursement developed for determining payments under title XVIII of the Federal Social Security Act (Medicare) program.

    (b) Allowable costs shall include a monetary value assigned to services provided by religious orders and for services rendered by an owner and operator of a LTHHCP.

    (c) Allowable costs shall not include amounts in excess of reasonable or maximum title XVIII of the Federal Social Security Act (Medicare) costs or in excess of customary charges to the general public. This provision shall not apply to services furnished by public providers free of charge or at a nominal fee.

    (d) Allowable costs shall not include expenses or portions of expenses reported by individual LTHHCP which are determined by the commissioner not to be reasonably related to the efficient production of long-term home health care services because of either the nature or the amount of the particular item.

    (e) Allowable costs shall not include costs not properly related to patient care or treatment which principally afford diversion, entertainment or amusement to owners, operators or employees of LTHHCPs.

    (f) Allowable costs shall not include any interest charged related to rate determination or penalty imposed by governmental agencies or courts, and the costs of policies obtained solely to insure against the imposition of such a penalty.

    (g) Allowable costs shall not include costs of contributions or other payments to political parties, candidates or organizations.

    (h) Allowable costs shall include only that portion of the dues paid to any professional association which has been demonstrated, to the satisfaction of the commissioner, to be allocable to expenditures other than for public relations advertising or political contributions.

    (i) Allowable costs shall not include the interest paid to a lender related through control, ownership, affiliation, or personal relationship to the borrower, except in instances where the prior approval of the Commissioner of Health has been obtained.

    (j) Allowable costs shall be reduced by income earned for Medicare Part B eligible services.

    (k) Allowable costs shall include those costs allocated to the LTHHCP from a related organization to the extent that:

    (1) those costs are reasonably related to the efficient production of long-term home health care services; and

    (2) the bases of allocation of such costs are consistent with regulations applicable to the cost reporting of the related organization.
     

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    Section 86-5.18 - Recoveries of expense

    86-5.18 Recoveries of expense.

    (a) Operating costs shall be reduced by the costs of services and activities which are not properly chargeable to patient care. In the event that the Commissioner of Health determines that it is not practical to establish the costs of such services and activities, the income derived therefrom may be substituted for costs of these services and activities. Examples of activities and services covered by this provision include, but are not limited to, the following:

    (1) discount on purchases;

    (2) tuitions and other payments for educational service, and other services not directly related to LTHHCP services; and

    (3) lease of office and other space to concessionaires providing services not related to LTHHCP service.

    (b) Operating costs shall be reduced by the actual revenue received from services and activities which are provided to employees at less than cost, as a form of fringe benefit. Examples of activities and services covered by this provision include, but are not limited to, drugs and supplies sold or provided to employees.
     

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    Section 86-5.19 - Depreciation for voluntary and public LTHHCP

    86-5.19 Depreciation for voluntary and public LTHHCP.

    (a) Reported depreciation based on approved historical cost of buildings, fixed equipment and capital improvements made thereto is recognized as a proper element of cost for voluntary and public LTHHCPs. Useful lives shall be the higher of the reported useful life or those useful lives from Estimated Useful Lives of Depreciable Hospital Assets, 1983 edition. Copies of this publication are available from the American Hospital Association, 840 North Lake Shore Drive, Chicago, IL 60611, and a copy is available for inspection and copying at the offices of the records access officer of the Department of Health, Corning Tower, Empire State Plaza, Albany, NY 12237.

    (b) In the computation of the rates effective for voluntary LTHHCPs, depreciation shall be included on a straight-line method on plant and nonmovable equipment. Depreciation shall be funded unless the Commissioner of Health shall have determined, upon application by the LTHHCP, and after inviting written comments from interested parties, that the requested waiver of the requirements for funding is a matter of public interest and necessity. In instances where funding is required, such fund may be used only for capital expenditures with approval as required or for the amortization of capital indebtedness. Funding for plant and fixed equipment shall mean that the transfer of monies to the funded accounts shall occur by the end of the fiscal period in which the depreciation is recorded. Board-designated funds and the accrual of liabilities to the funded depreciation accounts (due to/from accounts) shall not be recognized as funding of depreciation. Deposits to the funded depreciation accounts must remain in such accounts to be considered as valid funding transactions unless expended for the purpose for which it was funded.

    (c) In the computation of rates for public LTHHCPs, depreciation is to be included on a straight-line method on plant and nonmovable equipment.
     

    Effective Date: 
    Wednesday, March 11, 1992
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    Section 86-5.20 - Interest for all LTHHCPs

    86-5.20 Interest for all LTHHCPs.

    (a) Necessary interest on both current and capital indebtedness is an allowable cost for all LTHHCPs.

    (b) To be considered as an allowable cost, interest shall be incurred to satisfy a financial need, and at a rate not in excess of what a prudent borrower would have had to pay in the money market at the time the loan was made. Also, the interest shall be paid to a lender not related through control, ownership, affiliation or personal relationship to the borrower except in instances where the prior approval of the Commissioner of Health has been obtained. Financial need for capital indebtedness relating to a specific project shall exist when all available restricted funds designated for capital acquisition of that type have been considered for equity purposes.

    (c) Interest expense shall be reduced by investment income, with the exception of income from funded depreciation, qualified pension funds, trusteed malpractice insurance funds or in instances where income from gifts or grants is restricted by donors. Interest on funds borrowed from a donor-restricted fund or funded depreciation is an allowable expense. Investment income shall be defined as the aggregate net amount realized from dividends, interest, rental income, interest earned on temporary investment of withholding taxes, as well as all gains and losses. If the aggregate net amount realized is a loss, the loss is not allowable. Rate year investment income shall reduce rate year interest expense allowed for reimbursement as follows:

    (1) For all LTHHCPs, investment income shall first be used to reduce operating interest expense for that year; and

    (2) any remaining amount of investment income, after application of paragraph (1), shall be used to reduce capital interest expense reimbursed that year for LTHHCP's; and

    (3) any remaining amount of investment income after application of paragraph (2) shall not be considered in the determination of allowable costs.

    (d) Interest on current indebtedness shall be treated and reported as an operating administrative expense.

    (e) Where a public finance authority has established a mortgage rate of interest such that sufficient cash flows exist to retire the mortgage prior to the stated maturity, the amount of the mortgage to be forgiven, at the time of such forgiveness, shall be capitalized as deferred asset and amortized over the remaining mortgage life, as a reduction of the facility's capital expense.

    (f) Voluntary facilities shall report mortgage obligations financed by public finance authorities for their benefit and which they are responsible to repay, as liabilities in the general fund when such mortgage obligations are incurred.
     

    Effective Date: 
    Thursday, September 10, 1992
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    Section 86-5.21 - Capital cost reimbursement for proprietary LTHHCPs

    86-5.21 Capital cost reimbursement for proprietary LTHHCPs.

    (a) Reimbursement for capital costs shall be allowable in determining rates for proprietary LTHHCPs. These costs shall be included as such costs are allocated from a related organization to the extent that:

    (1) those costs are reasonably related to the efficient production of long-term home health care services; and

    (2) the bases of allocation of such costs are consistent with regulations applicable to the cost reporting of the related organization.

    (b) Any capital expenditures associated with non-arms length leases shall be approved and certified to, if required, pursuant to Article 28 of the Public Health Law. In the computation of rates for non-arms length leases, the capital cost shall be included in allowable costs only to the extent that it does not exceed the amount which the LTHHCP would have included in allowable costs if it had legal title to the asset (the cost of ownership), such as straight-line depreciation, insurance, and interest. Accelerated depreciation on these assets may not be included in allowable costs under any circumstances.
     

    Effective Date: 
    Wednesday, March 11, 1992
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    Section 86-5.22 - Return on investment for proprietary LTHHCPs

    86-5.22 Return of investment for proprietary LTHHCPs.

    (a) In computing the allowable costs of a proprietary LTHHCP, there shall be included a reasonable return on average equity capital. The percentage to be used in computing this allowance shall be a rate determined annually by the commissioner as reasonably related to the then current money market.

    (b) The average equity capital associated with the LTHHCP shall be that amount that is allocated from a related organization to the extent that the bases of allocation of average equity capital to the LTHHCP are consistent with regulations applicable to cost reporting of the related organization.
     

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    Section 86-5.23 - Movable equipment

    86-5.23 Movable equipment.

    Necessary and reasonable expenses related to movable equipment (depreciation computed on a straight-line method or accelerated under a double declining balance on sum-of-the-years-digits method, interest on indebtedness, lease, etc. pursuant to sections 86-5.17, 86-5.19, 86-5.20 and 86-5.22 of this Subpart) are considered to be allowable costs for LTHHCPs.
     

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    Section 86-5.24 - Research

    86-5.24 Research.

    (a) All research costs shall be excluded from allowable costs in computing reimbursement rates.

    (b) Research includes those studies and projects which have as their purpose the enlargement of general knowledge and understanding, are experimental in nature and hold no prospect of immediate benefit to the program or its patients.
     

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    Section 86-5.25 - Education activities

    86-5.25 Education activities.

    The costs of educational activities, less tuition and supporting grants, shall be included in the calculation of the basic rates, provided such activities are directly related to patient care services.
     

    Effective Date: 
    Monday, November 6, 1989
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    Section 86-5.26 - Termination of services

    86-5.26 Termination of services.

    (a) The Division of Health Care Financing in the Department of Health shall be notified immediately of the deletion of any previously offered service or of the withholding of services from patients paid for by government agencies. Such notification shall include a statement indicating the date of the deletion or withholding of such service and the cost impact on the LTHHCP of such action. Any overpayments by reason of such deletion of previously offered service shall be subject to such penalties as the Commissioner of Health may impose in the amount of up to 25 percent of the overpayment for negligent incorrect completion or negligent failure to file such notification, and up to 100 percent of the overpayment for willful incorrect completion or negligent failure to file such notification. The penalties assessed under this section are separate from, and shall not be construed to be in mitigation of, damages which may be recovered pursuant to section 145-b of the Social Services Law.
     

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    Section 86-5.27 - AIDS home care programs

    86-5.27 AIDS home care programs.

    Payment for services provided by LTHHCPs certified as AHCPs shall be at rates established pursuant to this Subpart provided, however, that nursing services provided by any LTHHCP to patients diagnosed with Acquired Immune Deficiency Syndrome (AIDS) as defined by ICD-9 codes 042, 043 and 044 shall be reimbursed pursuant to section 86-1.46(b).
     

    Effective Date: 
    Monday, November 6, 1989
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    Section 86-5.28 - Related organizations.

    86-5.28 Related organizations.

    (a) A related organization shall be defined as any entity which the LTHHCP is in control of or is controlled by, either directly or indirectly, or an organization, or institution whose actions or policies the LTHHCP has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution or a special purpose organization or where an association of material interest exists in an entity which supplies goods and/or services to the LTHHCP, or an entity which is controlled directly or indirectly by the immediate family of the operator. Immediate family shall include each parent, child, spouse, brother, sister, first cousin, aunt and uncle, whether such relationship arises by reason of birth, marriage or adoption. A special purpose organization shall be defined as an organization which is established to conduct certain of the provider's patient-care-related or non-patient-care-related activities. The special purpose organization is considered to be related if:

    (1) The LTHHCP controls the special purpose organization through contracts or other legal documents that allow direct authority over the organization's activities, management and policies; or

    (2) The LTHHCP is, for all practical purposes, the sole beneficiary of the special organization's activities. The LTHHCP shall be considered the special purpose organization's sole beneficiary if one or more of the three following circumstances exist:

    (i) a special purpose organization has solicited funds in the name of and with the expressed or implied approval of the LTHHCP, and substantially all the funds solicited by the organization were intended by the contributor or were otherwise required to be transferred to the provider or used at its discretion or direction;

    (ii) the LTHHCP has transferred some of its resources to a special purpose organization, substantially all of whose resources are held for the benefit of the provider; or

    (iii) the LTHHCP has assigned certain of its functions (such as the operation of a dormitory) to a special purpose organization that is operating primarily for the benefit of the LTHHCP.

    (b) The costs of goods and/or services furnished to a LTHHCP by a related organization are includable in the computation of the basic rate at the lower of the cost to the related organization or the market price of comparable goods and/or services available in the LTHHCP's region within the course of normal business operations.

    (c) If the LTHHCP has incurred any costs in connection with a related organizaton, the final payment rate shall include the costs of such goods and/or services.
     

    Effective Date: 
    Wednesday, March 11, 1992
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    SubPart 86-6 - Hospices

    Effective Date: 
    Tuesday, January 1, 1991
    Doc Status: 
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    Statutory Authority: 
    Public Health Law, section 4010

    Section 86-6.1 - Definitions

    86-6.1 Definitions. As used in this Subpart, the following terms shall have the following meanings.

    (a) Hospice shall mean a hospice as defined in article 40 of the Public Health Law possessing a valid certificate of approval issued by the State Commissioner of Health.

    (b) A routine home care day is a day on which an individual who has elected to receive hospice care is at home and is not receiving continuous care as defined in subdivision (f) of this section.

    (c) A routine home care day for AIDS patients is a day on which an individual who has been diagnosed with Acquired Immune Deficiency Syndrome (AIDS) has elected to receive hospice care, is at home and is not receiving continuous home care as defined in subdivision (f) of this section.

    (d) A routine home care day with an escort is a day as defined in subdivision (b) of this section, when the nurse providing care requires the use of an escort for security when visiting the patient's home.

    (e) A routine home care day for AIDS patients with an escort is a routine home care day as defined in subdivision (b) of this section when the individual who has elected to receive hospice care has been diagnosed with Acquired Immune Deficiency Syndrome (AIDS) and the nurse providing care requires the use of an escort for security when visiting the patient's home.

    (f) A continuous home care day is a day on which an individual who has elected to receive hospice care is not in an inpatient facility and receives hospice care consisting predominantly of nursing care on a continuous basis at home. Home health aide or homemaker services or both may also be provided on a continuous basis. Continuous home care is only furnished during brief periods of crisis, and only as necessary to maintain the terminally ill patient at home. A period of crisis is a period in which the individual requires continuous care to achieve palliation or management of acute medical symptoms.

    (g) A continuous home care day for AIDS patients is a day as defined in subdivision (f) of this section when the patient receiving care has been diagnosed as having Acquired Immune Deficiency Syndrome (AIDS).

    (h) An inpatient respite care day is a day on which the individual who has elected hospice care receives care in an approved facility on a short-term basis for respite.

    (i) A general inpatient care day is a day on which an individual who has elected hospice care receives general inpatient care in an inpatient facility for pain control or acute or chronic symptom management which cannot be managed in other settings.

    (j) A general inpatient care day for AIDS patients is a day as defined in subdivision (i) of this section, when the patient receiving care has been diagnosed as having Acquired Immune Deficiency Syndrome (AIDS).

    (k) Supplemental financial assistance program means the program as established pursuant to section 4012-a of the Public Health Law to provide additional payments to hospices which provide care to patients with special needs, which shall include patients diagnosed with Acquired Immune Deficiency Syndrome or patients in environment situations which require the use of escort services for the delivery of routine home care in accordance with approved plans required by subdivision (b) of section 86-6.6 of this Subpart, or persons receiving care in a hospice residence.

    (l) Room and board services shall mean the provision of personal care services, including assistance in activities of daily living, socializing activities, administration of medications, maintaining the cleanliness of a resident's room and supervising and assisting in the use of durable medical equipment and prescribed therapies by a nursing facility to an individual who has elected to receive hospice care. Room and board services shall also include the services, activities and allowable costs as set forth in subdivisions (d) and (g) of section 86-2.10 of this Part.

    Effective Date: 
    Friday, May 10, 2002
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    Section 86-6.2 - Hospice rates of reimbursement

    86-6.2 Hospice rates of reimbursement. (a) Pursuant to 42 USC 1396a (a)(13)(D), rates of reimbursement for hospice shall be in amounts no lower than the amounts used under part A of title XVIII of the Social Security Act. Hospices may be eligible for supplemental rates of payment under the supplemental financial assistance program in accordance with the provisions set forth in section 86-6.6 of this Subpart.

    (1) The hospice payment rates are established to reimburse each of the following four specific categories of hospice care:

    (i) routine home care;

    (ii) continuous home care;

    (iii) inpatient respite care; and

    (iv) general inpatient care.

    (2) Payment rates under the supplemental financial assistance program are established to reimburse each of the following special need categories of hospice care:

    (i) routine home care for AIDS patients;

    (ii) routine home care with escort services;

    (iii) routine home care for AIDS patients with escort services;

    (iv) continuous home care for AIDS patients;

    (v) general inpatient care for AIDS patients;

    (vi) room and board services for persons receiving care in a hospice residence.

    (b) Except as otherwise stated, each hospice payment rate established pursuant to this Subpart is a prospectively determined per diem amount which has been adjusted consistent wit the requirements of 42 USC 1396a (a)(13)(D) to reflect regional variations in wage levels.

    (c) Per-diem payments shall be for only one of the categories of hospice care listed in either paragraph (1) or paragraph (2) of subdivision (a) of this section for any particular day, provided that payments for continuous home care days will vary depending upon the number of hours of continuous home care provided.

    (d) For continuous home care, the rates established pursuant to subdivisions (f) and (g) of this section shall be divided by 24 to yield an hourly rate. The number of hours of continuous home care provided in a given day is then multiplied by the resulting hourly rate to yield a continuous home care payment amount for that day. A minimum of 8 hours of predominantly nursing care must be furnished on a particular day to qualify for the continuous home care reimbursement rate pursuant to this section.

    (e) Beginning October 1, 1990 annual adjustments to the hospice payment rates for each category of hospice care established in this section shall be made using trend factors developed by the Commissioner of Health pursuant to section 86-6.5 of this Subpart.

    (f) The hospice reimbursement rates for the four standard categories of care for hospices located within the various New York State Standard Metropolitan Statistical Areas (SMSA) and rural areas are as follows:

    *Routine *Continuous *InpatientHome Care Home *Respite CareSMSA Area Rate Care Rate Care Rate Rate(Counties Within Area)
    (1) Albany-Schenectady-Troy,(Albany, Greene,Montgomery,Rensselaer,Saratoga andSchenectady) $70.20 $409.31 $77.64 $313.61
    (2) Binghamton(Broome, Tioga 73.43 428.14 80.40 326.97
    (3) Buffalo(Erie) 74.79 436.07 81.57 332.60
    (4) Elmira(Chemung) 77.24 450.36 83.67 342.74
    (5) Glens Falls(Warren, Washington) 69.71 406.46 77.22 311.58
    (6) Nassau-Suffolk(Nassau, Suffolk) 86.81 506.19 91.87 382.38
    (7) New York(Bronx, Kings, New York,Putnam, Queens, RichmondRockland, Westchester) 94.97 553.75 98.85 416.14
    (8) Niagara Falls(Niagara) 69.33 404.27 76.90 310.02
    (9) Orange County(Orange) 76.22 444.40 82.79 338.52
    (10) Poughkeepsie(Dutchess) 80.69 470.45 86.62 357.04
    (11) Rochester(Livingston, Monroe,Ontario, Orleans, Wayne) 77.88 454.07 84.21 345.38
    (12) Syracuse(Madison, Onondaga,Oswego) 99.66 581.12 102.87 435.57
    (13) Utica-Rome(Herkimer, Oneida) 72.52 422.82 79.62 323.19
    (14) NON-SMSA Area (Rural)Includes Counties NotCovered Above 69.20 403.51 76.79 309.48
    *Rates that appear on this schedule shall be effective January 1, 1990 through September 30, 1990. Beginning October 1, 1990 annual adjustments will be made to these rates pursuant to section 86-6.5 of this Subpart.
    (g) The reimbursement rates under the Supplemental Financial Assistance Program for the special need categories of care for hospices located within the various New York State Standard Metropolitan Statistical Areas (SMSA) and rural areas are as follows:
    *Routine*Routine *Routine Home Care *Continuous *GeneralHome Care Home Care for AIDS Home Care Inpatientfor AIDS Escort Patients for AIDS for AIDSPatients Services & Escort Patients PatientsServicesSMSA AREA(Counties Within Area)(1) Albany-Schenectady-Troy(Albany, Greene, Montgomery,Rensselaer, Saratoga, andSchenectady) 120.53 86.02 136.35 439.64 348.55
    (2) Binghamton(Broome, Tioga) 126.27 89.25 142.09 467.55 363.39
    (3) Buffalo(Erie) 128.69 90.61 144.51 479.32 369.65
    (4) Elmira(Chemung) 133.04 93.06 148.86 500.52 380.92
    (5) Glens Falls(Warren, Washington) 119.66 85.53 135.48 435.40 346.29
    (6) Nassau-Suffolk(Nassau, Suffolk) 150.06 102.63 165.88 583.32 424.98
    (7) New York(Bronx, Kings, New York,Putnam, Queens, Richmond,Rockland, Westchester) 164.56 110.79 180.38 653.85 462.50
    (8) Niagara Falls(Niagara) 118.99 85.15 134.81 432.15 344.56
    (9) Orange County(Orange) 131.23 92.04 147.05 491.68 376.23
    (10) Poughkeepsie(Dutchess) 139.18 96.51 155.00 530.37 396.81
    (11) Rochester(Livingston, Monroe,Ontario, Orleans, Wayne) 134.17 93.70 149.99 506.02 383.86
    (12) Syracuse(Madison, Onondaga,Oswego) 172.90 115.48 188.72 694.44 484.09
    (13) Utica-Rome(Herkimer, Oneida) 124.64 88.34 140.46 459.66 359.19
    (14) NON-SMSA Area (Rural)Includes Counties NotCovered Above 118.76 85.02 134.58 431.03 343.96

    *Rates that appear on this schedule shall be effective July 1, 1990 through September 30, 1990. Beginning October 1, 1990 annual adjustments will be made to these rates pursuant to section 86-6.5 of this Subpart.

    (h) Daily payment will be made to a hospice residence for Medicaid–eligible patients who have elected hospice care and reside in a hospice residence. Payment shall be made for a hospice residence patient to take into account the room and board furnished by the hospice residence and will be in an amount equal to 94% of the weighted average Medicaid rate of the nursing facilities located in the region that the hospice residence is located in, as specified in Appendix 13-A, infra, of this Title.

    (i) The hospice rates of reimbursement set forth in this section are subject to the approval of the State Director of the Budget.

    Effective Date: 
    Friday, May 10, 2002
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    Section 86-6.3 - Reimbursement for attending and consulting physician services

    86-6.3 Reimbursement for attending and consulting physician services.

    Reimbursement for attending and consulting physician services rendered to hospice patients shall be in accordance with the Medicaid fee schedule set forth in this title, as amended pursuant to chapter 904 of the Laws of 1984. The current fee schedule is set forth in section 7.0 of the Medicaid Management Information System Provider Manual, Physicians (Revised January 1985). Copies of this schedule may be obtained from the Bureau of Program, Policy and Operations of the Division of Medical Assistance of the New York State Department of Social Services, 40 North Pearl Street, Albany, NY 12243. The current physicians fee schedule is available for inspection and copying at the Department of Health Records Access Office, 10th Floor, Corning Tower Building, Nelson A. Rockefeller Empire State Plaza, Albany, NY 12237.
     

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    Section 86-6.4 - Reporting requirements

    86-6.4 Reporting requirements.

    (a) Each hospice provider shall complete and file with the New York State Department of Health and/or its agent, financial and statistical reports as deemed necessary by the Commissioner of Health on forms supplied by the department. In instances where the hospice is a component part of a larger organization, the cost and statistics related to the operation of the hospice shall be separately maintained from the operator's other activities.

    (b) Completion of such financial and statistical reporting forms shall be in accordance with generally accepted accounting principles as applied to the hospice, unless the reporting instructions authorize specific variation in such principles.
     

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    Section 86-6.5 - Trend factor

    86-6.5 Trend factor.

    (a) The commissioner shall establish trend factors to project annual increases in the costs of hospice services. Each payment rate for the categories of hospice care, as established pursuant to the provisions of section 86-6.2 of this Subpart, shall be trended each year by the trend factors developed in accordance with the provisions of this section.

    (b) The elements of certified home health agencies' costs shall be weighted based upon data for the categories listed below in developing the trend factor that will be applied to the routine and continuous home care rates. The elements of general hospitals' costs shall be weighted based upon data for the categories listed below in developing the trend factor that will be applied to the inpatient and respite care rates:

    (1) salaries;

    (2) employee health and welfare expense;

    (3) nonpayroll administrative and general expense;

    (4) nonpayroll household and maintenance expense;

    (5) nonpayroll professional care expense.

    (c) Each weight shall be adjusted by one or more price indices. Included among these indices are elements of the United States Department of Labor consumer and produce price indices and special indices developed by the commissioner for this purpose.

    (d) The projected trend factors shall be updated on an annual basis, based upon current and available data. The commissioner shall adjust subsequent trend factors based upon such update.
     

    Effective Date: 
    Thursday, June 7, 1990
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    Section 86-6.6 - Supplemental financial assistance program

    86-6.6 Supplemental financial assistance program.

    (a) The supplemental financial assistance program provides enhanced payments to patients with special needs as defined in subdivision (k) of section 86-6.1 of this Subpart using payment rates established pursuant to subdivision (g) of section 86-6.2 of this Subpart.

    (b) To receive the enhanced Medicaid payment rates as set forth in section 86-6.2(g) of this Subpart, a hospice must:

    (1) meet all certification requirements pursuant to Article 40 of the Public Health Law;

    (2) continue efforts to obtain financial support from public and community funding sources;

    (3) make a reasonable effort to collect payments for services from third party insurance payers, governmental payers and self paying patients;

    (4) establish a reasonable relationship between costs and charges, or establish charges at approximate costs; and

    (5) with respect to the enhanced payment rates for escort services, provide the commissioner with an acceptable written plan explaining how escort services will be used by each agency which may be billing the routine home care rates with escort.

    (c) The provisions set forth in this section, and sections 86-6.1(k) and 86-6.2(g) of this Subpart shall expire and be deemed to have no further force or effect on and after the date on which section 4012-a of the Public Health Law, which authorizes establishment of the supplemental financial assistance program, expires.
     

    Effective Date: 
    Wednesday, July 21, 1999
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    Section 86-6.7 - Hospice reimbursement for room and board provided to patients residing in a nursing facility

    86-6.7 Hospice reimbursement for room and board provided to patients residing in a nursing facility.

    (a) Daily payment will be made to a hospice for Medicaid-eligible patients who have elected the hospice benefit and reside in a nursing facility (see 42 USC 1396a (a)(13)(D)). Payment shall be made for a hospice patient to take into account the room and board furnished by the nursing facility and will be in an amount equal to 95% of the facility rate that would have been paid by the State to the facility in accordance with the applicable provisions of Subpart 86-2 of this Part, if the patient had not elected to receive hospice care. A hospice cannot bill for this additional amount on a day in which the patient who has elected hospice care is receiving either general inpatient or inpatient respite care. Patients covered under provisions set forth in this section must be patients who would be eligible under Medicaid for nursing facility services if he/she had not elected to receive hospice care.

    (b) To be eligible to receive Medicaid payment as set forth in subdivision (a) of this section, a hospice must have a written agreement with a nursing facility under which the hospice takes full responsibility for the professional management of the patient's hospice care, and the nursing facility agrees to provide room and board to the patient, collect any patient payment contributions, and maintain an accounting of the patient's financial contribution.
     

    Effective Date: 
    Tuesday, January 1, 1991
    Doc Status: 
    Complete

    SubPart 86-7 - Assisted Living Program

    Effective Date: 
    Monday, December 20, 1993
    Doc Status: 
    Complete
    Statutory Authority: 
    Public Health Law 3614(6) and Social Services Law 461-(l)(5)

    Section 86-7.1 - Definitions

    Section 86-7.1 Definitions. As used in this Subpart, the following words shall have following meanings:

    (a) "Assisted living program" shall mean an entity as defined in paragraph (a) of subdivision (1) of section 461-1 of the social services law.

    (b) "Services" shall mean all services for which full payment to an assisted living program is included in the rate of payment which shall consist of the following: nursing services, personal care services, home health aide services, physical therapy, occupational therapy, speech therapy, medical supplies and equipment not requiring prior approval, personal emergency response services and adult day health care in a program approved by the commissioner and which the assisted living program shall provide directly, or arrange for the provision of, through contract(s) with a social services district, a long term home health care program or a certified home health agency, or other qualified providers.

    (c) "Patient classification groups" shall mean patient categories contained in the classification system, Resources Utilization Groups-II (RUG-II), which identifies the relative resource consumption required by different types of residential health care facility (RHCF) patients as specified in Appendix 13-A of this Title.

    (d) "Regions" shall mean the sixteen regions within the State into which residential health care facilities are grouped, by county, as identified in Appendix 13-A of this Title.

    (e) "Rate of payment" shall mean the capitated per diem rate of reimbursement established pursuant to this Subpart for governmental agencies for services provided directly by an assisted living program or provided through contract(s) with eligible providers.

    (f) "Per Diem" shall mean the unit of measure denoting services rendered to one patient between the census taking hour on two successive days. In computing per diems, the day of admission shall be counted but not the day of discharge. When a patient is admitted and discharged on the same day, this period shall be counted as one per diem.

    (g) "Roll factor" shall mean the cumulative result of multiplying one year's trend (inflation) factor times one or more other year's trend factor which is used to inflate costs from a base period to a rate period.
     

    Effective Date: 
    Monday, December 20, 1993
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    Section 86-7.2 - Computation of the rate of payment

    86-7.2 Computation of the rate of payment.

    (a) For each region, a rate of payment shall be established for each of the sixteen patient classification groups. The rate of payment shall be established for the calendar year 1992. For each subsequent calendar year, the 1992 rate of payment shall be increased by a roll factor as determined pursuant to section 86-7.3.

    (b)(1) For purposes of this Subpart, the rate of payment shall be related to an average residential health care facility rate consisting of two components:

    (i) Direct component;

    (ii) Other than direct component.

    (2) Direct component of the rate of payment:

    (i) The direct component of the rate of payment shall be composed of costs incurred in providing care directly to patients as set forth in section 86-2.10(c)(1).

    (ii) The direct component for each patient classification group shall be equal to the statewide mean direct case mix neutral cost, as determined in section 86-2.10(c)(3), times the case mix index for the patient classification group divided by a regional direct input price adjustment factor for the patient classification group as identified in subparagraph (iii) of this paragraph and trended to 1992 by the applicable weighted average regional roll factor as determined pursuant to section 86-7.3. The case mix index for each patient classification group shall be as identified in Appendix 13-A of this Title, however, the case mix index for reduced physical functioning A shall be .4414 as identified in section 86-2.10(c)(3)(iii)(i).

    (iii) The Regional Direct Input Price Adjustment Factor (RDIPAF) shall adjust for differences in wage and fringe benefit costs between and among the regions caused by differences in the wage scale of each level of employee. Within each region, a RDIPAF shall be calculated for each patient classification group.

    The RDIPAF shall be based upon the following factors:

    (a) Sixteen regions within the state as identified in Appendix 13-A.

    (b) Case mix predicted staffing for registered professional nurses, licensed practical nurses and aides, orderlies and assistants for each patient classification group.

    (c) The proportion of residential health care facility salaries and fringe benefit costs for the direct care cost centers identified in section 86-2.10(c)(1) to the total costs of the direct care cost centers.

    (d) A regional average dollar per hour and proportion of regional direct salaries and fringe benefits to total direct costs as identified in clause (c) of this subparagraph based upon either 1983 or 1987 residential health care facility financial and statistical data in accordance with section 86-2.10(m)(l)(iv).

    (3) Other than direct component of the rate of payment:

    (i) The other than direct component shall be equal to the mean indirect price per day set forth in section 86-2.10(d)(4) for the freestanding, low intensity, less than 300 beds peer group divided by the regional indirect input price adjustment factor for the patient classification group as identified in subparagraph (ii) of this paragraph and trended to 1992 by the applicable weighted average regional roll factor as determined pursuant to section 86-7.3 plus a 1992 regional weighted average per diem for other than direct and indirect components of the RHCF rate as set forth in sections 86-2.10 (f), (g) and (r), computed using the first January 1, 1992 rate promulgated following the thirty day period established for correcting errors in the initial January 1, 1992 rate issued at least sixty days prior to January 1, 1992.

    (ii) The Regional Indirect Input Price Adjustment Factor (RIIPAF) shall adjust for differences in wage and fringe benefit costs between and among the wage equalization factor regions caused by differences in the wage scale of each level of employee. Within each region, a RIIPAF shall be calculated for each patient classification group. The RIIPAF shall be based upon the following factors:

    (a) Sixteen regions within the state, as identified in Appendix 13-A.

    (b) Case mix predicted staffing for registered professional nurses, licensed practical nurses and aides, orderlies and assistants for each patient classification group.

    (c) The proportion of regional RHCF salaries and fringe benefit costs for the indirect cost centers identified in section 86-2.10(d)(1) to the total costs of the indirect care cost centers.

    (d) A regional average dollar per hour and proportion of regional indirect salaries and fringe benefits to total indirect costs as identified in clause (c) of this subparagraph based upon either 1983 or 1987 residential health care facility financial and statistical data in accordance with section 86-2.10(m)(l)(iv). (c) For calendar year 1992, for each patient classification group in each region, the direct and other than direct components shall be summed and multiplied by fifty percent. For subsequent calendar years, the 1992 rate of payment shall be increased by the applicable roll factor determined pursuant to section 86-7.3(b).
     

    Effective Date: 
    Monday, December 20, 1993
    Doc Status: 
    Complete

    Section 86-7.3 - Adjustments to rate of payment

    86-7.3 Adjustments to rate of payment.

    (a) For the calendar year 1992, for each region, the direct component as identified in section 86-7.2(b)(2) and the mean indirect price per day divided by the regional indirect input price adjustment factor for the patient classification group as identified in section 86-7.2(b)(3) shall be trended to 1992 by a roll factor to project allowable cost increases for the rate period. The trend factors used in the calculation of the roll factor shall be determined in a manner consistent with the methodology set forth in section 86-2.12. A weighted average roll factor shall be calculated for each region. Relative weights shall be assigned to each trend factor group within the region and shall be based upon the aggregate operating portion of RHCF rates as defined in section 86-2.10(a)(7) using the initial July 1, 1992 RHCF rate certified by the commissioner pursuant to section 2807(3) of the Public Health Law times the 1990 RHCFs' patient days. The weighted average roll factor for each region shall be calculated by multiplying the weights for each trend factor group within each region times the respective July 1, 1992 roll factors determined pursuant to section 86-2.12 excluding prospective adjustments made pursuant to section 86-2.12(f).

    (b) For calendar years beginning January 1, 1993 and on January 1 of each subsequent year, the 1992 rate of payment as identified in section 86-7.2(c) shall be increased by a roll factor to project allowable cost increases for the rate period. The trend factor(s) used in the calculation of the roll factor shall be determined in a manner consistent with the methodology set forth in section 86-2.12. A weighted average roll factor shall be calculated for each region. The weighted average roll factor for the rate period shall be computed utilizing the weights developed from the computation in subparagraph (a) of this paragraph adjusted to reflect any changes in trend factor groups made pursuant to section 86-2.12. The regional weighted average roll factor for the rate period shall also include the prospective annual adjustments to the RHCF trend factors made pursuant to section 86-2.12(f).

    (c) The rate of payment shall not exceed customary charges to the general public.
     

    Effective Date: 
    Monday, December 20, 1993
    Doc Status: 
    Complete

    Section 86-7.4 - Federal financial participation

    86-7.4 Federal Financial Participation

    (a) This Subpart shall be effective if, and as long as, federal financial participation is available for medical assistance expenditures made pursuant to this Subpart.
     

    Effective Date: 
    Monday, December 20, 1993
    Doc Status: 
    Complete

    SubPart 86-8 - Outpatient Services: Ambulatory Patient Group

    Effective Date: 
    Tuesday, July 3, 2012
    Doc Status: 
    Complete

    Section 86-8.1 - Scope

    Section 86-8.1 Scope

    (a) This Subpart shall govern Medicaid rates of payments for ambulatory care services provided in the following categories of facilities for the following periods:

    (1) outpatient services provided by general hospitals on and after December 1, 2008;

    (2) emergency department services provided by general hospitals on and after January 1, 2009;

    (3) ambulatory surgery services provided by general hospitals on and after December 1, 2008;

    (4) ambulatory services provided by diagnostic and treatment centers on and after September 1, 2009;

    (5) ambulatory surgery services provided by free-standing ambulatory surgery centers on and after September 1, 2009; and

    (6) hospital-based mental hygiene services on and after July 1, 2010, including:

    (i) mental retardation clinics;

    (ii) mental health clinics;

    (iii) alcoholism and drug abuse clinics and outpatient rehabilitation; and

    (iv) methadone clinics.

    (b) Notwithstanding subdivision (a) of this section, the provisions of this Subpart shall not apply to the following:

    (1) facilities whose Medicaid reimbursement is governed by subdivision 8 of section 2807 of the public health law, except when the provisions of this Subpart are made applicable pursuant to paragraph (f) of such subdivision; and

    (2) payments made on behalf of persons enrolled in Medicaid managed care or in the family health plus program.

    Effective Date: 
    Saturday, January 1, 2011
    Doc Status: 
    Complete

    Section 86-8.2 - Definitions

    Section 86-8.2 Definitions

    As used in this Subpart, the following definitions shall apply:

    (a) Ambulatory Patient Group ("APG") shall mean a defined group of outpatient procedures, encounters or ancillary services, as specifically identified and published by the Department, which reflect similar patient characteristics and resource utilization and which incorporate the use of ICD-9-CM diagnosis codes and CPT-4 and HCPCS procedure codes, as defined below;

    (b) Allowed APG weight shall mean the relative resource utilization for a given APG after adjusting for consolidation, packaging, and discounting.

    (c) APG relative weight shall mean a numeric value that reflects the relative expected average resource utilization (cost) for each APG as compared to the expected average resource utilization for all other APGs. Procedure-based APG weight shall mean a numeric value that reflects the relative expected average resource utilization (cost) for a specific procedure. A procedure that has been assigned its own weight shall have its payment derived from its procedure-specific weight without regard to the weight of the APG to which the procedure groups.

    (d) Base rates shall mean the numeric value that shall be multiplied by the allowed APG weight for a given APG, or by the final APG relative weight to determine the total allowable Medicaid operating payment for a visit.

    (e) Consolidation, also known as "bundling", shall mean the process for determining if a single payment amount is appropriate in those circumstances when a patient receives multiple APG procedures during a single patient visit.

    (f) Current Procedural Terminology, fourth edition (CPT-4) is the systematic listing and coding of procedures and services provided by physicians or other related health care providers. It is a subset of the Healthcare Common Procedure Coding System (HCPCS). The CPT-4 and HCPCS are maintained by the American Medical Association and the federal Centers for Medicare and Medicaid Services and are updated annually.

    (g) Discounting shall mean the reduction in APG payment that results when additional procedures do not consolidate. Additional occurrences of the same ancillary APG within a single visit or episode will also discount.

    (h) APG Software System shall mean the New York State-specific version of the APG computer software developed and published by Minnesota Mining and Manufacturing Corporation (3M) to process CPT-4 and ICD-9 code information in order to assign patient visits to the appropriate APG category or categories and apply appropriate bundling, packaging and discounting to assign the appropriate final APG weight and associated reimbursement.

    (i) Final APG Weight shall mean the allowed APG weight for a given visit as expressed in the applicable APG software, and as adjusted by all applicable consolidation, packaging and discounting and other applicable adjustments.

    (j) International Classification of Diseases, 9th Revision (ICD-9) is a comprehensive coding system maintained by the federal Centers for Medicare and Medicaid Services in the US Department of Health and Human Services. It is maintained for the purpose of providing a standardized, universal coding system to identify and describe patient diagnoses, symptoms, complaints, conditions and/or causes of injury or illness. It is updated annually.

    (k) Packaging shall mean those circumstances in which payment for routine ancillary services or drugs shall be deemed as included in the applicable APG payment for a related significant procedure or medical visit. Medical visits also package with significant procedures, unless specifically excepted in this regulation.

    (l) The Downstate Region shall consist of the five counties comprising New York City, and the counties of Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, and Dutchess.

    (m) The Upstate Region shall consist of all counties in the State other than those counties included in the Downstate Region.

    (n) Significant procedure APG shall mean an APG incorporating a medical procedure that constitutes the primary reason for the visit in terms of time and resources expended.

    (o) Medical visit APG shall mean an APG representing a visit during which a patient received medical treatment, but did not have a significant procedure performed.

    (p) Visit shall mean a unit of service consisting of all the APG services performed for a patient that are coded on the same claim and share a common date of service.

    (1) Episode shall mean a unit of service consisting of all services on a claim, regardless of the coded dates of service. Under episode billing, an episode shall consist of all medical visits and/or procedures that are provided by a clinic to a patient on a single date of service plus any associated non-carved-out ancillaries, regardless of the date of service of those ancillaries. For emergency departments, the significant procedures and/or medical visits comprising the non-carved-out ancillary services portion of an episode need not be on a single date of services and may instead be on consecutive dates of service. Multiple episodes shall not be coded on the same claim.

    (2) The calculation of the APG payment by the APG software may be either visit-based or episode-based depending on the rate code used to access the APG software logic. References to "visits" in this Subpart shall be deemed to refer also to "episodes" for rate-setting purposes.

    (q) Peer Group shall mean a group of providers that share a common APG base rate. Peer groups may be established based on facility licensure, geographic region, types of services provided or categories of patients.

    (r) Repealed.

    (s) Ancillary services APGs shall mean those APGs designated by the Department as reflecting those tests and procedures ordered by physicians to assist in patient diagnosis and/or treatment.

    (t) Case mix index shall mean the actual or estimated average final APG weight for a defined group of APG visits.

    (u) No blend APG shall mean an APG that has its entire payment calculated under the APG reimbursement methodology without regard to the historical average operating payment per visit for the provider.

    (v) MR/DD/TBI peer group shall mean a patient-specific peer group consisting of persons appropriately designated in the Medicaid billing system with mental retardation ("MR"), developmental disabilties ("DD") or traumatic brain injuries ("TBI").

    Effective Date: 
    Wednesday, March 14, 2012
    Doc Status: 
    Complete

    Section 86-8.3 - Record keeping, reports and audits

    Section 86-8.3 Record keeping, reports and audits

    (a) General hospitals whose rates of payments are governed by this Subpart shall:

    (1) continue to maintain financial and statistical data and records in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-1 of this Part;

    (2) continue to submit to the Department all cost reports and other information in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-1 of this Part;

    (3) continue to have all books and records subject to audit in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-1 of this Part.

    (b) Diagnostic and treatment centers and free-standing ambulatory surgery centers whose rates of payments are governed by this Subpart shall:

    (1) continue to maintain financial and statistical data and records in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-4 of this Part;

    (2) continue to submit to the Department all cost reports and other information in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-4 of this Part;

    (3) continue to have all books and records subject to audit in accordance with otherwise applicable statutes and regulations, including, but not limited to, regulations as set forth in Subpart 86-4 of this Part.

    Effective Date: 
    Wednesday, December 3, 2008
    Doc Status: 
    Complete

    Section 86-8.4 - Capital reimbursement

    Section 86-8.4 Capital cost reimbursement

    A capital cost component shall be added to Medicaid payments made pursuant to this Subpart and computed in accordance with the following:

    (a) The computation of the capital cost component for payments for general hospital outpatient and emergency services shall remain subject to otherwise applicable statutory provisions as set forth in subparagraphs (i) and (ii) of paragraph (g) of subdivision 2 of section 2807 of the public health law.

    (b) The computation of the capital cost component for payments for diagnostic and treatment center services shall remain subject to otherwise applicable statutory provisions as set forth in paragraph (b) of subdivision 2 of section 2807 of the public health law.

    (c) The computation of the capital cost component for payments for ambulatory surgery services provided by hospital-based and free-standing ambulatory surgery centers shall be the result of dividing the total amount of capital cost reimbursement paid to such facilities pursuant to Section 86-4.40 of this Title for the 2005 calendar year for the Upstate Region and for the Downstate Region and then dividing each such regional total amount by the total number of claims paid pursuant to such Section 86-4.40 within each such region for the 2005 calendar year.

    Effective Date: 
    Wednesday, December 3, 2008
    Doc Status: 
    Complete

    Section 86-8.5 - Administrative rate appeals

    Section 86-8.5 Administrative rate appeals

    (a) Administrative rate appeals of rates of payment issued pursuant to this Subpart must be submitted to the Department in writing within 120 days of the date such rates are published by the Department to the facility. Such rate appeals must set forth in detail the basis for such appeal and be accompanied by any relevant documentation. Thereafter the Department shall respond to such rate appeals in writing and shall either affirm the original rates, revise such rates or request additional information. A failure to respond to the Department’s request for additional information within 30 days shall be deemed to constitute the withdrawal, with prejudice, of the facility’s rate appeal, provided, however, that the Department may extend that time period upon a request by the facility and for good cause shown. Upon its receipt of the requested additional information the Department shall issue a written determination of such rate appeal.

    (b) The Department’s written determination of a facility’s rate appeal shall be deemed final unless the facility submits a written request for further consideration of the rate appeal within 30 days of the date the Department issued such written determination, provided, however, that if such written determination advises the facility that its rate appeal is being denied on the ground that the appeal constitutes a challenge to the rate-setting methodology set forth in this subpart such denial shall be deemed to be the Department’s final administrative determination with regard to such appeal and there shall be no further administrative review available. The Department shall otherwise respond in writing to the facility’s request for further consideration and either affirm or revise its original rate appeal determination and this response by the Department shall be deemed its final administrative determination with regard to such rate appeal.

    Effective Date: 
    Wednesday, December 3, 2008
    Doc Status: 
    Complete

    Section 86-8.6 - Rates for new facilities during the transition period

    Section 86-8.6 Rates for new facilities during the transition period

    (a) General hospital outpatient clinics which commence operation after December 31, 2007 and prior to January 1, 2012, and for which rates computed pursuant to public health law section 2807(2) are not available shall have the capital cost component of their rates based on a budget as submitted by the facility and as approved by the Department and shall have the operating component of their rates computed in accordance with the following:

    (1) for the period December 1, 2008 through November 30, 2009, 75% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 25% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (2) for the period December 1, 2009 through December 31, 2010, 50% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 50% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (3) for the period January 1, 2011 through December 31, 2011, 25% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 75% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (4) for periods on and after January 1, 2012, 100% of such rates shall reflect APG rates as computed in accordance with this Subpart.

    (5) For the purposes of this subdivision, the historical 2007 regional average payment per visit shall mean the result of dividing the total facility specific Medicaid reimbursement paid for general hospital outpatient clinic claims paid in the 2007 calendar year in the applicable upstate or downstate region for all rate codes reflected in the APG rate-setting methodology except those specifically excluded pursuant to section 86-8.10 of this Subpart, divided by the total visits on claims paid under such rate codes.

    (b) Diagnostic and treatment centers which commence operation after December 31, 2007 and prior to January 1, 2012, and for which rates computed pursuant to public health law section 2807(2) are not available shall have the capital cost component of their rates based on a budget as submitted by the facility and as approved by the Department and shall have the operating cost component of their rates computed in accordance with the following:

    (1) for the period September 1, 2009 through November 30, 2009, 75% of such rates shall reflect the historical 2007 regional average peer group payment per visit as calculated by the department, and 25% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (2) for the period December 1, 2009 through December 31, 2010, 50% of such rates shall reflect the historical 2007 regional average peer group payment per visit as calculated by the department, and 50% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (3) for the period January 1, 2011 through December 31, 2011, 25% of such rates shall reflect the historical 2007 regional average peer group payment per visit as calculated by the department, and 75% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (4) for periods on and after January 1, 2012, 100% of such rates shall reflect APG rates as computed in accordance with this Subpart.

    (5) For the purposes of this subdivision, the historical 2007 regional average peer group payment per visit shall mean the result of dividing the total facility specific Medicaid reimbursement paid for diagnostic and treatment center claims for each peer group, as defined in section 86-4.13 of this Part, paid in the 2007 calendar year in the applicable upstate or downstate region for all rate codes reflected in the APG rate-setting methodology except those specifically excluded pursuant to section 86-8.10 of this Subpart, divided by the total visits on claims paid under such rate codes.

    (c) Free-standing ambulatory surgery centers which commence operation after December 31, 2007 and prior to January 1, 2012, and for which rates computed pursuant to public health law section 2807(2) are not available shall have the capital cost component of their rates computed in accordance with section 86-8.4(c) of this Subpart and shall have the operating cost component of their rates computed in accordance with the following:

    (1) for the period September 1, 2009 through November 30, 2009, 75% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 25% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (2) for the period December 1, 2009 through December 31, 2010, 50% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 50% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (3) for the period January 1, 2011 through December 31, 2011, 25% of such rates shall reflect the historical 2007 regional average payment per visit as calculated by the department, and 75% of such rates shall reflect APG rates as computed in accordance with this Subpart;

    (4) for periods on and after January 1, 2012, 100% of such rates shall reflect APG rates as computed in accordance with this Subpart.

    (5) For the purposes of this subdivision, the historical 2007 regional average payment per visit shall mean the result of dividing the total facility specific Medicaid reimbursement paid for free-standing ambulatory surgery centers claims paid in the 2007 calendar year in the applicable upstate or downstate region for all rate codes reflected in the APG rate-setting methodology except those specifically excluded pursuant to section 86-8.10 of this Subpart, divided by the total visits on claims paid under such rate codes.

    Effective Date: 
    Wednesday, June 2, 2010
    Doc Status: 
    Complete

    Section 86-8.7 - APGs and relative weights

    Section 86-8.7 APGs and relative weights

    (a) The table of APG Weights, Procedure Based Weights and units, and APG Fee Schedule Fees and units for each effective period are published on the New York State Department of Health website at: http://www.health.state.ny.us/health_care/medicaid/rates/apg/doc/apg_pay...

    Effective Date: 
    Wednesday, March 14, 2012
    Doc Status: 
    Complete

    Section 86-8.8 - Base rates

    Section 86-8.8 Base rates

    Base rates shall be developed by the Department for each category of providers set forth in subdivision (a) of section 86-8.1 of this Subpart, in accordance with the following:

    (a) Separate base rates for each category of provider shall be established based on the location of such providers in the Upstate Region or the Downstate Region and such base rates shall reflect differing regional cost factors as determined by the Department.

    (b) Additional discrete base rates may be developed by the Department for such peer groups as may be established by regulation in this Subpart. Such base rates shall include a MR/DD/TBI peer group for hospital clinics for periods commencing on and after July 1, 2010 and a MR/DD/TBI peer group for free-standing clinics which may be established for rate periods commencing on or after January 1, 2011.

    (c) Such base rates shall be established based on estimated historical per visit payment amounts, as adjusted to reflect the level of State appropriations made available for such purposes. Such adjustments shall be calculated on a per visit basis, utilizing the same historical visit volume used to calculate the estimated per visit payment amounts.

    (d) Such base rates shall be peer group specific and shall reflect the estimated case mix index for each peer group and any projected changes in provider coding patterns for each peer group.

    (e) Such base rates may be periodically adjusted to reflect changes in provider coding patterns and case mix.

    (f) For hospital clinics operating under a mental hygiene law license and instituting utilization of the APG reimbursement methodology, the applicable blend rate calculation shall be determined on a licensure-specific and provider-specific basis and shall be based on the most recent 12 month period for which accurate and complete billing information exists, as determined by the commissioner of the mental hygiene law agency having jurisdiction over that class of provider. Such clinics shall have the blend rate otherwise computed and applied on the same schedule as applies to public health law article 28 licensed hospital clinics pursuant to paragraph (a) of subdivision 2-a of section 2807 of the public health law.

    Effective Date: 
    Wednesday, January 5, 2011
    Doc Status: 
    Complete

    Section 86-8.9 - Diagnostic coding and rate computation

    Section 86-8.9 Diagnostic coding and rate computation

    (a) Facilities shall assign ICD-9 diagnostic codes and HCPCS/CPT procedure codes to each claim as appropriate and shall submit such information to the Department or the Department’s designee in accordance with written billing and reporting instructions issued by the Department. The Department shall utilize such claim coding information to assign each the applicable APG or APGs for each patient visit identified on the claim, utilizing the APG software system to determine the significant procedure APG or the medical visit APG, the applicable ancillary services APGs and the final APG weight applicable to each such visit. The APG software system shall incorporate methodologies for consolidation, packaging and discounting to be reflected in the final APG weight to be assigned to each visit on the claim.

    (b) The operating component of the payment rate for each patient shall be computed by multiplying the final APG weight for each visit, as computed in accordance with subdivision (a) of this section, by the applicable base rate, as determined in accordance with section 86-8.7 of this Subpart. A capital component shall then been added to each such payment rate in accordance with the provisions of section 86-8.4 of this Subpart.

    (c) Drugs purchased under the 340B drug benefit program and billed under the APG reimbursement methodology shall be reimbursed at a reduced rate comparable to the reduced cost of drugs purchased through the 340B drug benefit program.

    (d) In cases where the only reimbursable APGs for a visit are one or more of the following APGs, there shall be no reimbursement for capital costs included in the payment for that visit.

    94 CARDIAC REHABILITATION
    274 PHYSICAL THERAPY, GROUP
    275 SPEECH THERAPY AND EVALUATION, GROUP
    322 MEDICATION ADMINISTRATION AND OBSERVATION
    414 LEVEL I IMMUNIZATION AND ALLERGY IMMUNOTHERAPY
    415 LEVEL II IMMUNIZATION
    416 LEVEL III IMMUNIZATION
    428 PATIENT EDUCATION, INDIVIDUAL
    429 PATIENT EDUCATION, GROUP
    451 SMOKING CESSATION TREATMENT

    (e) The following APGs shall be designated as "no blend APGs" and shall have their payments calculated solely under the APG reimbursement methodology.

    94 Cardiac Rehabilitation
    310 Developmental and Neuropsychological Testing
    312 Full Day Partial Hospitalization for Mental Illness
    321 Crisis Intervention
    414 Level I Immunization and Allergy Immunotherapy
    415 Level II Immunization
    416 Level III Immunization
    426 Medication Management
    428 Patient Education, Individual
    429 Patient Education, Group
    448 After Hours Services
    451 Smoking Cessation Treatment

    Effective Date: 
    Wednesday, March 14, 2012
    Doc Status: 
    Complete

    Section 86-8.10 - Exclusions from payment

    Section 86-8.10 Exclusions from payment
    Payments for the following shall be excluded from rates set pursuant to this Subpart:

    (a) Drugs and other pharmaceutical products and implantable family planning devices for which separate and distinct outpatient billing and payment were authorized by the Department as of December 31, 2007, and as set forth by the Department in written billing instructions issued to providers subject to this Subpart, and as may be subsequently modified by the Department, HIV counseling and testing visits, post-test HIV counseling visits (positive results), HIV counseling visit (no testing), day health care service (HIV), TB/directly observed therapy -- downstate levels 1 and 2, TB/directly observed therapy -- upstate levels 1 and 2, AIDS clinic therapeutic visits in general hospital outpatient clinics, child rehabilitation services provided under rate code 2887 in general hospital outpatient clinics, and Medicaid obstetrical and maternity services (MOMS) provided under rate code 1604.

    (b) Visits solely for the purpose of receiving ordered ambulatory services.

    (c) Visits solely for the purpose of receiving pharmacy services.

    (d) Visits solely for the purpose of receiving education or training services, except with regard to services authorized pursuant to clause (A) of subparagraph (ii) of paragraph (f) of subdivision 2-a of section 2807 of the Public Health Law.

    (e) Visits solely for the purpose of receiving services from licensed social workers, except with regard to psychotherapy services provided by Federally Qualified Health Centers or Rural Health Centers subject to reimbursement pursuant to this Subpart, or as authorized pursuant to clauses (C) and (D) of subparagraph (ii) of paragraph (f) of subdivision 2-a of section 2807 of the Public Health Law.

    (f) Visits solely for the purpose of receiving group services, except with regard to clinical group psychotherapy services provided by Federally Qualified Health Centers or Rural Health Centers subject to reimbursement pursuant to this Subpart and provided, however, that reimbursement for such group services shall be determined in accordance with paragraph (h) of section 86-4.9 of this Title.

    (g) Offsite services, defined as medical services provided by a facility’s outpatient staff at locations other than those operated by and under the facility’s licensure under Article 28 of the Public Health Law, or visits related to the provision of such offsite services, except with regard to offsite services provided by Federally Qualified Health Centers or Rural Health Centers and provided, however, that reimbursement for such offsite services shall be determined in accordance with paragraph (i) of section 86-4.9 of this Title.

    (h) The following APGs shall not be eligible for reimbursement pursuant to this Subpart:

    065 RESPIRATORY THERAPY
    066 PULMONARY REHABILITATION
    117 HOME INFUSION
    190 ARTIFICIAL FERTILIZATION
    311 FULL DAY PARTIAL HOSPITALIZATION FOR SUBSTANCE ABUSE
    313 HALF DAY PARTIAL HOSPITALIZATION FOR SUBSTANCE ABUSE
    314 HALF DAY PARTIAL HOSPITALIZATION FOR MENTAL ILLNESS
    319 ACTIVITY THERAPY
    371 ORTHODONTICS
    430 CLASS I CHEMOTHERAPY DRUGS
    431 CLASS II CHEMOTHERAPY DRUGS
    432 CLASS III CHEMOTHERAPY DRUGS
    433 CLASS IV CHEMOTHERAPY DRUGS
    434 CLASS V CHEMOTHERAPY DRUGS
    441 CLASS VI CHEMOTHERAPY DRUGS
    443 CLASS VII CHEMOTHERAPY DRUGS
    452 DIABETES SUPPLIES
    453 MOTORIZED WHEELCHAIR
    454 TPN FORMULAE
    456 MOTORIZED WHEELCHAIR ACCESSORIES
    465 CLASS XIII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    999 UNASSIGNED

    (i) The following APGs shall not be eligible for reimbursement pursuant to this Subpart when they are presented as the only APGs applicable to a patient visit or when the only other APGs presented with them are one or more of the APGs listed in subdivision (h) of this section:

    281 MAGNETIC RESONANCE ANGIOGRAPHY – HEAD AND/OR NECK
    282 MAGNETIC RESONANCE ANGIOGRAPHY – CHEST
    283 MAGNETIC RESONANCE ANGIOGRAPHY – OTHER SITES
    284 MYELOGRAPHY
    285 MISCELLANEOUS RADIOLOGICAL PROCEDURES WITH CONTRAST
    286 MAMMOGRAPHY
    287 DIGESTIVE RADIOLOGY
    288 DIAGNOSTIC ULTRASOUND EXCEPT OBSTETRICAL AND VASCULAR OF LOWER EXTREMITIES
    289 VASCULAR DIAGNOSTIC ULTRASOUND OF LOWER EXTREMITIES
    290 PET SCANS
    291 BONE DENSITOMETRY
    292 MRI – ABDOMEN
    293 MRI – JOINTS
    294 MRI – BACK
    295 MRI – CHEST
    296 MRI – OTHER
    297 MRI - BRAIN
    298 CAT SCAN BACK
    299 CAT SCAN - BRAIN
    300 CAT SCAN - ABDOMEN
    301 CAT SCAN - OTHER
    302 ANGIOGRAPHY, OTHER
    303 ANGIOGRAPHY, CEREBRAL
    330 LEVEL I DIAGNOSTIC NUCLEAR MEDICINE
    331 LEVEL II DIAGNOSTIC NUCLEAR MEDICINE
    332 LEVEL III DIAGNOSTIC NUCLEAR MEDICINE
    373 LEVEL I DENTAL FILM
    374 LEVEL II DENTAL FILM
    375 DENTAL ANESTHESIA
    380 ANESTHESIA
    390 LEVEL I PATHOLOGY
    391 LEVEL II PATHOLOGY
    392 PAP SMEARS
    393 BLOOD AND TISSUE TYPING
    394 LEVEL I IMMUNOLOGY TESTS
    395 LEVEL II IMMUNOLOGY TESTS
    396 LEVEL I MICROBIOLOGY TESTS
    397 LEVEL II MICROBIOLOGY TESTS
    398 LEVEL I ENDOCRINOLOGY TESTS
    399 LEVEL II ENDOCRINOLOGY TESTS
    400 LEVEL I CHEMISTRY TESTS
    401 LEVEL II CHEMISTRY TESTS
    402 BASIC CHEMISTRY TESTS
    403 ORGAN OR DISEASE ORIENTED PANELS
    404 TOXICOLOGY TESTS
    405 THERAPEUTIC DRUG MONITORING
    406 LEVEL I CLOTTING TESTS
    407 LEVEL II CLOTTING TESTS
    408 LEVEL I HEMATOLOGY TESTS
    409 LEVEL II HEMATOLOGY TESTS
    410 URINALYSIS
    411 BLOOD AND URINE DIPSTICK TESTS
    413 CARDIOGRAM
    435 CLASS I PHARMACOTHERAPY
    436 CLASS II PHARMACOTHERAPY
    437 CLASS III PHARMACOTHERAPY
    438 CLASS IV PHARMACOTHERAPY
    439 CLASS V PHARMACOTHERAPY
    440 CLASS VI PHARMACOTHERAPY
    444 CLASS VII PHARMACOTHERAPY
    448 AFTER HOURS SERVICES
    455 IMPLANTED TISSUE OF ANY TYPE
    457 VENIPUNCTURE
    460 CLASS VIII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    461 CLASS IX COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    462 CLASS X COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    463 CLASS XI COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    464 CLASS XII COMBINED CHEMOTHERAPY AND PHARMACOTHERAPY
    470 OBSTETRICAL ULTRASOUND
    471 PLAIN FILM
    472 ULTRASOUND GUIDANCE
    473 CT GUIDANCE
    490 INCIDENTAL TO MEDICAL, SIGNIFICANT PROCEDURE OR THERAPY VISIT

    Effective Date: 
    Wednesday, March 14, 2012
    Doc Status: 
    Complete

    Section 86-8.11 - System updating and incorporation by reference

    Section 86-8.11 System updating and incorporation by reference

    (a) The following elements of the APG rate-setting system shall be updated no less frequently than annually:

    (1) the listing of reimbursable APGs subject to this Subpart and the relative weight assigned to each such APG;

    (2) the base rates;

    (3) the applicable ICD-9 codes utilized in the APG software system;

    (4) the applicable CPT-4/HCPCS codes utilized in the APG software system;

    (5) the APG software system

    (b) The Current Procedure Code, fourth edition (CPT-4) and the Healthcare Common Procedure Coding System (HCPCS), published by the American Medical Association, and the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM), published by the United States Department of Health and Human Services, as described in this Subpart, are hereby incorporated by reference, with the same force and effect as if fully set forth herein. Copies of these documents are available for public inspection and copying at the Office of Regulatory Reform, New York State Department of Health, Corning Tower, Empire State Plaza, Albany, New York 12237. Copies of the CPT-4 and HCPCS are also available from the American Medical Association, Order Department, P.O. Box 930876, Atlanta, Georgia 31193-0876. Copies of the ICD-9-CM are also available from the United States Government Printing Office, P.O. Box 371954, Pittsburgh, Pennsylvania 15250-7954.

    Effective Date: 
    Wednesday, December 3, 2008
    Doc Status: 
    Complete

    Section 86-8.12 - Payments for extended hours of operation

    Section 86-8.12 Payments for extended hours of operation

    For visits occurring on and after January 1, 2009, by hospital outpatient clinics and diagnostic and treatment centers otherwise subject to this Subpart, which are scheduled and occur on evenings, weekends and holidays as defined by the Department, a supplemental APG payment amount, as determined in accordance with section 86-8.7 of this Subpart, shall be added on to the otherwise applicable payment amount for each such visit.

    Effective Date: 
    Wednesday, December 3, 2008
    Doc Status: 
    Complete

    Section 86-8.13 - Out-of-state providers

    Section 86-8.13 Out-of-state providers

    (a) Rates for services specified in section 86-8.1(a) of this Subpart provided in outpatient facilities located outside New York state shall be as follows:

    (1) rates in effect for similar services for providers located in the downstate region of New York state shall apply with regard to services provided by out-of-state providers located in the New Jersey counties of Sussex, Passaic, Bergen, Hudson, Essex, Union, Middlesex and Monmouth, in the Pennsylvania county of Pike, and in the Connecticut counties of Fairfield and Litchfield; and

    (2) rates in effect for similar services for providers located in the upstate region of New York state shall apply with regard to all other out-of-state providers.

    (b) Notwithstanding any inconsistent provision of this section, in the event the Department determines that an out-of-state provider is providing services which are not available within New York state, the Department may negotiate payment rates and conditions with such a provider. Prior approval by the Department shall be required with regard to services provided by such providers.

    (c) For the purposes of this section the downstate region of New York state shall consist of the New York counties of Bronx, New York, Kings, Queens, Richmond, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess, and the upstate region of New York state shall consist of all other New York counties.

    Effective Date: 
    Wednesday, January 5, 2011
    Doc Status: 
    Complete

    Section 86-8.14 - Non-APG payments

    Section 86-8.14 Non-APG payments

    (a) Psychotherapy services by clinical social workers. To the extent authorized pursuant to section 2807(2-a) of the Public Health Law, payments for individual psychotherapy services provided by clinical social workers, as defined by section 86-4-9 of this Subpart, shall be established at $40.64 for encounters lasting between twenty and thirty minutes and at $62.33 for encounters lasting between forty-five and fifty minutes and at $69.93 for family therapy encounters lasting between forty-five and fifty minutes.

    (b) Wheelchair evaluation services. Payments for comprehensive wheelchair evaluations, which shall include assessments, fittings and training consisting of at least two hours of direct patient care services, shall be established at $302.

    (c) Eyeglasses dispensing. Payments for dispensing eyeglasses shall be established at $89.77, plus capital, when such service includes the cost of providing the eyeglasses and at $38.05, plus capital, when such service does not include the cost of providing the eyeglasses. The capital add-on per visit for each provider shall be the provider’s capital add-on per visit as otherwise calculated pursuant to applicable provisions of section 2807(2) of the Public Health Law.

    Effective Date: 
    Wednesday, June 2, 2010
    Doc Status: 
    Complete

    Section 86-8.15 - Closures, mergers, acquisitions, consolidations, restructurings and inpatient bed de-certifications

    86-8.15 Closures, mergers, acquisitions, consolidations, restructurings and inpatient bed de-certifications. (a) The commissioner may grant approval of a temporary adjustment to the non-capital components of rates calculated pursuant to this subpart for eligible ambulatory care facilities licensed under article 28 of the Public Health Law ("PHL").

    (b) Eligible facilities shall include:

    (1) facilities undergoing closure;

    (2) facilities impacted by the closure of other health care facilities;

    (3) facilities subject to mergers, acquisitions, consolidations or restructuring;

    (4) facilities impacted by the merger, acquisition, consolidation or restructuring of other health care facilities; or

    (5) outpatient facilities of general hospitals which have entered into an agreement with the Department to permanently decertify a specified number of staffed hospital inpatient beds, as reported to the Department.

    (c) Facilities seeking rate adjustments under this section shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

    (1) protect or enhance access to care;

    (2) protect or enhance quality of care;

    (3) improve the cost effectiveness of the delivery of health care services; or

    (4) otherwise protect or enhance the health care delivery system, as determined by the commissioner.

    (d) (1) Such written proposal shall be submitted to the commissioner at least sixty days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this section shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the facility shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the facility’s written proposal as approved by the commissioner and may also require that the facility submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the facility’s temporary rate adjustment prior to the end of the specified timeframe.

    (2) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a Request For Applications or a Request For Proposals issued by the commissioner.

    (e) Federally qualified health centers with reimbursement rates issued pursuant to PHL § 2807(8) may apply for a temporary rate adjustment pursuant to this section as an alternative rate-setting methodology in accordance with the provisions of PHL § 2807(8)(f).

    Effective Date: 
    Tuesday, July 3, 2012
    Doc Status: 
    Complete

    SubPart 86-9 - Limited Home Care Services Agencies

    Effective Date: 
    Wednesday, December 31, 2008
    Doc Status: 
    Complete

    Section 86-9.1 - Services

    Section 86-9.1 Services

    (a) Reimbursement is available under this Subpart only for the following services provided directly by limited home care services agencies, licensed by the department pursuant to section thirty-six hundred five of the Public Health Law, to eligible individuals who are residents of adult homes or enriched housing programs certified in accordance with article seven of the Social Services Law:

    (1) Level II personal care services, as defined in 18 NYCRR section 505.14(a)(6)(ii), including related nursing supervision, authorized and provided in accordance with rules and regulations of the department, but not including Level I personal care services as defined in 18 NYCRR section 505.14(a)(6)(i); and

    (2) the administration of subcutaneous and/or intramuscular injections and application of sterile dressings by a registered professional nurse, including associated nursing tasks. Reimbursement is available under this Subpart only for services provided by limited home care services agencies which are not services that must be provided to residents of adult homes or enriched housing programs pursuant to article seven of the Social Services Law and rules and regulations of the department.

    Effective Date: 
    Wednesday, December 31, 2008
    Doc Status: 
    Complete

    Section 86-9.2 - Computation of the rates of payment

    Section 86-9.2 - Computation of the rates of payment

    (a) For purposes of this Subpart, rates of payment for Level II personal care services shall be calculated for two regions: a downstate region to consist of Bronx, Kings, New York, Queens and Richmond counties and an upstate region to consist of all other counties in New York State. For purposes of this Subpart, rates of payment for registered professional nurse services shall be calculated for two regions: a downstate region to consist of Rockland, Westchester, Nassau, Suffolk, Bronx, Kings, New York, Queens and Richmond counties and an upstate region to consist of all other counties in New York State.

    (b) For each region, the unit of measure for which a limited home care services agency may bill for services rendered is a quarter hour.

    (c) For purposes of this Subpart, the rate of payment for Level II personal care services for the downstate region shall be the weighted average January 1, 1997 Level II personal care rate for the downstate region. For purposes of this Subpart, the rate of payment for Level II personal care services for the upstate region shall be the weighted average January 1, 1997 Level II personal care rate for the upstate region for direct care and training, capital, and criminal checks, plus no more than fifteen percent of such rate for administrative expenses.

    (d) For purposes of this Subpart, the rate of payment for registered professional nurse services for the downstate region for the administration of subcutaneous and/or intramuscular injections and application of sterile dressings shall be the average January 1, 1997 fee established for nursing services rendered by a registered professional nurse on a private practitioner basis for the downstate region. For purposes of this Subpart, the rate of payment for registered professional nurse services for the upstate region for the administration of subcutaneous and/or intramuscular injections and application of sterile dressings shall be the average January 1, 1997 fee established for nursing services rendered by a registered professional nurse on a private practitioner basis for the upstate region.

    Effective Date: 
    Wednesday, December 31, 2008
    Doc Status: 
    Complete

    SubPart 86-10 - Rates for Non-State Providers of Residential Habilitation in Community Residences, Including Individualized Residential Alternatives (IRAs) and for Non-State Providers of Day Habilitation

    Effective Date: 
    Wednesday, March 15, 2017
    Doc Status: 
    Complete
    Statutory Authority: 
    Social Services Law, Section 363-a and Public Health Law, Section 201(1)(v)

    Section 86-10.1 - Applicability

    86-10.1 Applicability.

    On and after November first, two thousand fourteen, rates of reimbursement for residential habilitation services provided in community residences, including IRAs, and for day habilitation services, other than those provided by the Office for People with Developmental Disabilities, shall be determined in accordance with this Subpart.

    Effective Date: 
    Wednesday, April 22, 2015
    Doc Status: 
    Complete

    Section 86-10.2 - Definitions

    86-10.2 Definitions. As used in this Subpart, the following terms shall have the following meanings:

    (a) Allowable capital costs. Capital costs that are allowable under 14 NYCRR Subpart 635-6.

    (b) Allowable operating costs. In the case of residential habilitation services, operating costs that are allowable under 14 NYCRR paragraph 635-10.4 (b)(1) and subdivision 686.13(b); in the case of day habilitation services, operating costs that are allowable under 14 NYCRR paragraph 635-10.4(b)(2).

    (c) Acuity factor. Factor developed through a regression analysis utilizing components of Developmental Disabilities Profile (DDP) scores, average residential bed size, Willowbrook class indicators and historical utilization data to predict direct care hours needed to serve individuals.

    (d) Base year. The consolidated fiscal report period from which the initial period rate will be calculated. Such period shall be January first, two thousand eleven through December thirty-first, two thousand eleven for providers reporting on a calendar year basis and July first, two thousand ten through June thirtieth, two thousand eleven for providers reporting on a fiscal year basis.

    (e) Base operating rate. Reimbursement amount calculated by dividing annual reimbursement by applicable annual units of service, both in effect on June thirtieth, two thousand fourteen.

    (f) Community residence. A facility operated as a community residence under 14 NYCRR Part 686, including an individualized residential alternative.

    (g) Day habilitation services. Day habilitation services provided under the home and community based services waiver operated by OPWDD and pursuant to 14 NYCRR Subpart 635-10.

    (h) Department of Health (DOH) Regions. Regions as defined by the Department, assigned to providers based upon the geographic location of the provider’s headquarters as reported on the consolidated fiscal report. Such regions are as follows:

    (1) Downstate: 5 boroughs of New York City, Nassau, Suffolk, Westchester;

    (2) Hudson Valley: Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster;

    (3) Upstate Metro: Albany, Erie, Fulton, Genesee, Madison, Monroe, Montgomery, Niagara, Onondaga, Orleans, Rensselaer, Saratoga, Schenectady, Warren, Washington, Wyoming;

    (4) Upstate Non-Metro: Any counties not listed in paragraphs (1), (2) or (3) of this subdivision.

    (i) Developmental Disabilities Profile (DDP-2). The document titled Developmental Disabilities Profile (DDP-2) dated 7/10 and issued by OPWDD. This document, the
    Developmental Disabilities Profile (DDP-2) User’s Guideand another document titled
    Scoring the DDPare available during business hours and by appointment at the following locations:

    (1) the Department of State, Division of Administrative Rules, One Commerce Plaza, 99 Washington Avenue, Albany NY 12231-0001

    (2) OPWDD, Attention Public Access Officer, 44 Holland Avenue, Albany, NY 12229.

    (j) Evacuation Score (E-Score). The score for a supervised community residence that is certified under Chapters 32 or 33 of the Residential Board and Care Occupancies of the NFPA 101 Life Safety Code (2000 edition) that is provided to the Department by OPWDD once a year. The E-score is described in the NFPA 101A
    Guide on Alternative Approaches to Life Safety,2001 edition. The Life Safety Code and
    Guide on Alternative Approaches to LifeSafety are available from the National Fire Protection Association, One Batterymarch Park, Quincy, MA 02169-7471; or is available during business hours and by appointment at the following locations:

    (1) the Department of State, Division of Administrative Rules, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231-0001

    (2) OPWDD, Attention Public Access Officer, 44 Holland Avenue, Albany, NY 12229.

    (k) E-Score Factor. Factor derived from analysis of Evacuation Scores to adjust staffing needs necessary to address health and safety needs.

    (l) Financing expenditures. Interest expense and fees charged for financing of costs related to the purchase/acquisition, alteration, construction, rehabilitation and/or renovation of real property.

    (m) Individual. Person receiving a residential or day habilitation service.

    (n) Initial period. July first, two thousand fourteen through June thirtieth, two thousand fifteen.

    (o) Lease/rental and ancillary payments. A provider’s annual rental payments for real property and ancillary outlays associated with the property such as utilities and maintenance.

    (p) Occupancy factor. Beginning July first, two thousand fifteen such factor will be an adjustment made prospectively at the beginning of the applicable rate year, based upon the previous years’ experience. Such adjustment shall be provider specific and shall be the lower of the provider’s actual vacancy or five percent.

    (q) Operating costs. Provider costs related to the provision of day habilitation and residential habilitation services provided in a community residence and identified in such provider’s cost reports. With the exception of Live-In Caregiver services, allowable operating costs shall not include the costs of board.

    (r) Provider - An individual, corporation, partnership or other organization to which OPWDD has issued an operating certificate to operate a community residence, and for which the NYS Department of Health has issued a Medicaid provider agreement, or an individual, corporation, partnership or other organization to which OPWDD has issued an operating certificate or approval to operate a day habilitation program, and for which the NYS Department of Health has issued a Medicaid provider agreement.

    (s) Rate sheet capacity. The number of individuals for whom a provider is certified or approved by OPWDD to provide residential habilitation.

    (t) Reimbursable cost. The final allowable costs of the rate year after all audit and/or adjustments are made.

    (u) Residential habilitation. Residential habilitation services provided in a community residence, under the home and community based services waiver operated by OPWDD and pursuant to 14 NYCRR Subpart 635-10 and 14 NYCRR 671.

    (v) Room and board. Room means hotel or shelter type expenses including all property related costs such as rental or depreciation related to the purchase of real estate and furnishings; maintenance, utilities and related administrative services. Board means three meals a day or any other full nutritional regimen.

    (w) Start-up costs. Those costs associated with the opening of a new program. Start-up costs include pre-operational rent, utilities, staffing, staff training, advertising for staff, travel, security services, furniture, equipment and supplies.

    (x) State supplement. Amount paid to a provider to cover Room and Board costs in excess of SSI and Supplemental Nutrition Assistance Program (SNAP) payments.

    (y) Target rate. The final rate in effect at the end of the transition period for each waiver service determined using the rate year final reimbursable cost for each respective provider for each respective service divided by the final total of actual units of service for all individuals, regardless of payor.

    (z) Units of service. The unit of measure for the following waiver services shall be:

    (1) Residential habilitation provided in a supervised community residence - daily

    (2) Residential habilitation provided in a supportive community residence - monthly

    (3) Day habilitation - daily

    Effective Date: 
    Wednesday, April 22, 2015
    Doc Status: 
    Complete

    Section 86-10.3 - Rates for residential habilitation services and for day habilitation services

    86-10.3 Rates for residential habilitation services and for day habilitation services.

    (a) There shall be one provider-wide rate for each provider of residential habilitation service and one provider-wide rate for each provider of day habilitation services, except that rates for residential habilitation or day habilitation services provided to individuals identified as specialized populations by OPWDD shall be determined under section 86-10.8 of this Subpart. Adjustments may be made to the rate resulting from any final audit findings or reviews.

    (b) Rates shall be computed on the basis of a full twelve month base year CFR, adjusted in accordance with the methodology as provided in this section. The rate shall include operating cost components, facility cost components and capital cost components as identified in applicable subdivisions. Such base year may be updated periodically, as determined by the Department.

    (c) Components of rates for residential habilitation provided in supervised community residences.

    (1) Operating component. The operating component shall be based on allowable operating costs identified in the consolidated fiscal reports. The operating component shall be inclusive of the following components:

    (i) Regional average direct care wage, which shall mean the quotient of base year salaried direct care dollars for each provider in a DOH region, aggregated for all such providers in such region, for all residential habilitation-supervised IRA, residential habilitation-supportive IRA, day habilitation services and intermediate care facility for the developmentally disabled services (ICF/DD), divided by base year salaried direct care hours for each provider in a DOH region, aggregated for all such providers in such region, for all residential habilitation-supervised IRA, residential habilitation-supportive IRA, day habilitation services and ICF/DD services.

    (ii) Regional average employee-related component, which shall mean the sum of vacation leave accruals and total fringe benefits for the base year for each provider in a DOH region, aggregated for all such providers in such region, such sum to be divided by base year salaried direct care dollars for each provider in a DOH region, aggregated for all such providers in such region, and then multiplied by the applicable regional average direct care wage as determined by subparagraph (i) of this paragraph.

    (iii) Regional average program support component, which shall mean the sum of transportation related-participant staff travel, participant incidentals, expensed adaptive equipment, sub-contract raw materials, participant wages-non-contract, participant wages-contract, participant fringe benefits, staff development, supplies and materials-non-household, other-OTPS, lease/rental vehicle, depreciation-vehicle, interest-vehicle, other-equipment, other than to/from transportation allocation, salaried support dollars (excluding housekeeping and maintenance staff) and salaried program administration dollars for the base year for each provider in a DOH region, aggregated by all such providers in such region. Such sum shall be divided by the total base year salaried direct care dollars of all providers in a DOH region, and then multiplied by the applicable regional average direct care wage as determined pursuant to subparagraph (i) of this paragraph.

    (iv) Regional average direct care hourly rate-excluding general and administrative, which shall mean the sum of the applicable regional average direct care wage as determined pursuant to subparagraph (i) of this paragraph, the applicable regional average employee-related component as determined pursuant to subparagraph (ii) of this paragraph, and applicable regional average program support component as determined pursuant to subparagraph (iii) of this paragraph.

    (v) Regional average general and administrative component, which shall mean the sum of the insurance-general and agency administration allocation for the base year for each provider in a DOH region, aggregated for all such providers in such region, divided by (the sum of total program/site costs and other than to/from transportation allocation, less the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, total property-provider paid, housekeeping and maintenance staff, salaried clinical dollars, and contracted clinical dollars for the base year for each provider in a DOH region, aggregated for all providers in such region). The regional average direct care hourly rate-exclusive of general and administrative costs, as determined pursuant to subparagraph (iv) of this paragraph, shall then be divided by (one minus the applicable regional average general and administrative quotient), from which the applicable regional average direct care wage hourly rate-excluding general and administrative, as computed in subparagraph (iv) of this paragraph shall be subtracted.

    (vi) Regional average direct care hourly rate, which shall mean the sum of the applicable regional average direct care wage, as determined pursuant to subparagraph (i) of this paragraph, the applicable regional average employee-related component as determined pursuant to subparagraph (ii) of this paragraph, the applicable regional average program support component as determined pursuant to subparagraph (iii) of this paragraph, and the applicable regional average general and administrative component computed in subparagraph (v) of this paragraph.

    (vii) Provider average direct care wage, which shall mean the quotient of base year salaried direct care dollars divided by the base year salaried direct care hours of a provider.

    (viii) Provider average employee-related component, which shall mean the sum of vacation leave accruals and fringe benefits for the base year for each provider, divided by base year salaried direct care dollars of a provider, such quotient to be multiplied by the provider average direct care wage as computed in subparagraph (vii) of this paragraph.

    (ix) Provider average program support component, which shall mean the sum of transportation related-participant, staff travel, participant incidentals, expensed adaptive equipment, sub-contract raw materials, participant wages-non-contract, participant wages-contract, participant fringe benefits, staff development, supplies and materials-non-household, other-OTPS, lease/rental vehicle, depreciation-vehicle, interest-vehicle, other-equipment, other than to/from transportation allocation, salaried support dollars (excluding housekeeping and maintenance staff) and salaried program administration dollars for the base year for a provider. Such sum shall be divided by the base year salaried direct care dollars of such provider and such quotient shall be multiplied by the provider average direct care wage as computed in subparagraph (vii) of this paragraph.

    (x) Provider average direct care hourly rate-excluding general and administrative, which shall mean the sum of the provider average direct care wage as determined pursuant to subparagraph (vii) of this paragraph, the provider average employee-related component as determined pursuant to subparagraph (viii) of this paragraph, and the provider average program support component as determined pursuant to subparagraph (ix) of this paragraph for each provider.

    (xi) Provider average general and administrative component, which shall mean the sum of insurance-general and agency administration allocation for the base year for a provider, such sum to be divided by (the sum of total program/site costs and other than to/from transportation allocation less the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, total property-provider paid, housekeeping and maintenance staff, salaried clinical dollars, and contracted clinical dollars for the base year for a provider). The provider average direct care hourly rate-excluding general and administrative, as computed in subparagraph (x) of this paragraph, shall then be divided by (one minus the applicable provider average general and administrative quotient), from which the provider average direct care wage hourly rate-excluding general and administrative, as computed in subparagraph (x) of this paragraph, shall be subtracted.

    (xii) Provider average direct care hourly rate, which shall mean the sum of the provider average direct care wage, as determined pursuant to subparagraph (vii) of this paragraph, the provider average employee-related component as determined pursuant to subparagraph (viii) of this paragraph, the provider average program support component as determined pursuant to subparagraph (ix) of this paragraph, and the provider average general and administrative component as determined pursuant to subparagraph (xi) of this paragraph.

    (xiii) Statewide average direct care hours per person, which shall mean the total salaried and contracted direct care hours for the base year for all providers divided by total capacity for all providers, as such capacity is determined from the rate sheets for the base year and as pro-rated for partial year sites.

    (xiv) Statewide average direct hours per provider, which shall mean the product of the statewide average direct care hours per person, as determined pursuant to subparagraph (xiii) of this paragraph, the applicable E-Score factor of a provider, the applicable provider acuity factor and the applicable provider rate sheet capacity for the base year, as pro-rated for partial year sites.

    (xv) Statewide budget neutrality adjustment factor for hours, which shall mean the quotient of the total salaried and contracted direct care hours for the base year for all providers, divided by the total of statewide average direct hours for all providers as determined pursuant to subparagraph (xiv) of this paragraph.

    (xvi) Calculated direct care hours, which shall mean the product of the statewide average direct care hours per provider, as determined pursuant to subparagraph (xiv) of this paragraph, and the statewide budget neutrality adjustment factor for hours, as determined pursuant to subparagraph (xv) of this paragraph. Such product shall then be divided by the rate sheet capacity for the base year, pro-rated for partial year sites and such quotient multiplied by rate sheet capacity for the initial period.

    (xvii) Regional average clinical hourly wage, which shall mean the quotient of base year salaried clinical dollars for each provider of a DOH region, aggregated for all such providers in such region, divided by base year salaried clinical hours for each provider of a DOH region, aggregated for all such providers in such region.

    (xviii) Provider average clinical hourly wage, which shall mean the quotient of base year salaried clinical dollars of a provider divided by base year salaried clinical hours of a provider.

    (xix) Provider salaried clinical hours, which shall mean the quotient of base year salaried clinical hours of a provider, divided by the rate sheet capacity for the base year, pro-rated for partial year sites, such quotient to be multiplied by the rate sheet capacity for the initial period for such provider.

    (xx) Regional average contracted clinical hourly wage, which shall mean the quotient of base year contracted clinical dollars of each provider in a DOH region divided by the base year contracted clinical hours for each provider in a DOH region, aggregated for all such providers in such region.

    (xxi) Provider contracted clinical hours, which shall mean the quotient of base year contracted clinical hours of a provider divided by rate sheet capacity for the base year, pro-rated for partial year sites, such quotient to be multiplied by rate sheet capacity for the initial period.

    (xxii) Provider direct care hourly rate-adjusted for wage equalization factor, which shall mean the sum of the provider average direct care hourly rate, as determined pursuant to subparagraph (xii) of this paragraph multiplied by seventy-five hundredths and the applicable regional average direct care hourly rate, as determined pursuant to subparagraph (vi) of this paragraph multiplied by twenty-five hundredths.

    (xxiii) Provider clinical hourly wage-adjusted for wage equalization factor, which shall mean the sum of the provider average clinical hourly wage, as determined pursuant to subparagraph (xviii) of this paragraph, multiplied by seventy-five hundredths and the applicable regional average clinical hourly wage, as computed in subparagraph (xvii) of this paragraph multiplied by twenty-five hundredths.

    (xxiv) Provider reimbursement for direct care hourly rate, which shall mean the product of the calculated direct care hours, as determined pursuant to subparagraph (xvi) of this paragraph, and the provider direct care hourly rate-adjusted for wage equalization factor, as computed in subparagraph (xxii) of this paragraph.

    (xxv) Provider reimbursement for clinical hourly wage, which shall mean the product of the provider salaried clinical hours, as determined pursuant to subparagraph (xix) of this paragraph and the provider clinical hourly wage-adjusted for wage equalization factor, as determined pursuant to subparagraph (xxiii) of this paragraph.

    (xxvi) Provider reimbursement for contracted clinical hourly wage, which shall mean the product of the provider contracted clinical hours, as determined pursuant to subparagraph (xxi) of this paragraph and the applicable regional average contracted clinical hourly wage, as determined pursuant to subparagraph (xx) of this paragraph.

    (xxvii) Provider operating revenue, which shall mean the sum of the provider reimbursement from direct care hourly rate, as determined pursuant to subparagraph (xxiv) of this paragraph, the provider reimbursement from clinical hourly wage, as determined pursuant to subparagraph (xxv) of this paragraph, and the provider reimbursement from contracted clinical hourly wage, as determined pursuant to subparagraph (xxvi) of this paragraph.

    (xxviii) Statewide budget neutrality adjustment factor for operating dollars, which shall mean the quotient of the operating revenue from all provider rate sheets in effect on June thirtieth, two thousand fourteen, divided by provider operating revenue for all providers, as computed in subparagraph (xxvii) of this paragraph.

    (xxix)Total provider operating revenue-adjusted, which shall mean the product of the provider operating revenue, as determined pursuant to subparagraph (xxvii) of this paragraph, and the statewide budget neutrality adjustment factor for operating dollars, as determined pursuant to subparagraph (xxviii) of this paragraph.

    The final daily operating rate shall be determined by dividing the total provider operating revenue-adjusted, as determined pursuant to subparagraph (xxix) of this paragraph, by the applicable rate sheet capacity for the initial period and such quotient to be further divided by three hundred sixty-five, or three hundred sixty-six in the case of a leap year.

    (2) Alternative operating cost component. For providers that did not submit a cost report or submitted a cost report that was incomplete for residential habilitation services for the base year, the final daily operating rate shall be a regional daily operating rate. This rate shall be the sum of:

    (i) The product of the applicable regional average direct care hourly rate, as determined pursuant to subparagraph (vi) of paragraph (1) of this subdivision, and the applicable regional average direct care hours, which shall mean the quotient of salaried and contracted direct care hours for the base year for each provider in a DOH region, aggregated for all such providers in such region, divided by the rate sheet capacities for the base year, pro-rated for partial year sites for each provider in a DOH region, aggregated for all such providers in such region divided by three hundred sixty-five, or three hundred sixty-six in the case of a leap year.

    (ii) The product shall then be added to the product of the applicable regional average clinical hourly wage, as determined pursuant to subparagraph (xvii) of paragraph (1) of this subdivision and the applicable regional average clinical hours, which shall mean the quotient of salaried and contracted clinical hours for the base year for each provider in a DOH region, aggregated for all such providers in such region, divided by the rate sheet capacities for the base year, pro-rated for partial year sites for each provider in a DOH region, aggregated for all such providers in such region divided by three hundred sixty-five, or three hundred sixty-six, in the case of a leap year.

    Such sum shall be multiplied by the statewide budget neutrality adjustment factor for operating dollars, as determined pursuant to subparagraph (xxviii) of paragraph (1) of this subdivision to determine the final regional daily operating rate.

    (3) Facility cost component. The facility cost component shall include allowable facility costs identified in the consolidated fiscal reports, and shall be inclusive of the following components:

    (i) Provider facility reimbursement, which shall mean the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, insurance-property and casualty, housekeeping and maintenance staff, and program administration property, for the base year for a provider divided by rate sheet capacity for the base year, pro-rated for partial year sites and such quotient multiplied by rate sheet capacity for the initial period.

    (ii)The final monthly State Supplement shall be calculated in accordance with paragraph (6) of this subdivision, divided by twelve.

    (4) Alternative facility cost component. For providers that did not submit a cost report or submitted a cost report that was incomplete for residential habilitation services provided in a supervised community residence for the base year, the final monthly facility rate shall be a regional monthly facility rate which shall mean the quotient of the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation, insurance-property and casualty, housekeeping and maintenance staff, and program administration property for the base year divided by the rate sheet capacity for the base year, pro-rated for partial year sites for each provider of a DOH region, aggregated for all such providers in such region. Such quotient shall be multiplied by rate sheet capacity for the initial period. The final monthly State Supplement shall be calculated in accordance with paragraph (6) of this subdivision, divided by twelve.

    (5) Capital component.

    (i) Capital costs shall be determined pursuant to 14 NYCRR Subpart 635-6.

    Note: The provisions of this paragraph do not apply to capital approved by OPWDD prior to July first, two thousand fourteen.

    (ii) Initial rate. The rate shall include the approved appraised costs of an acquisition or fair market value of a lease, and estimated costs for renovations, interest, soft costs and start-up expenses. Such costs shall be included in the rate as of the date of certification of the site, continuing until such time as actual costs are submitted to the State. Estimated costs shall be submitted in lieu of actual costs for a period no greater than two years. If actual costs are not submitted to the State within two years from the date of certification, the amount of capital costs included in the rate shall be zero for each period in which actual costs are not submitted. The Department may retroactively adjust the capital component.

    (iii) Cost verified rates. The provider shall submit to the State supporting documentation of actual costs. Actual costs shall be verified by the State reviewing the supporting documentation of such costs. A provider submitting such actual costs shall certify that the reimbursement requested reflects allowable capital costs and that such costs were actually expended by such provider. Capital costs approved on or after November first, two thousand fourteen shall be amortized over a twenty-five year period for acquisition of properties or the life of the lease for leased sites. Amortization shall begin upon certification by the provider of such costs. For community residences start-up costs may be amortized over a one-year period beginning with site certification.

    (iv) Renovations of existing provider owned residential programs shall be funded through the Residential Reserve for Replacement (RRR).

    (6) Adjustments. Rates described in this subdivision shall be subject to a reimbursement offset. Such offset shall be determined as follows:

    (i) The sum of the total provider facility reimbursement, as determined by subparagraph (i) of paragraph (3) of this subdivision, and the capital reimbursement, as determined by paragraph (5) of this subdivision.

    (ii) Supplemental security income, as determined by 14 NYCRR 671.7(b)(9)(xxii), annualized and multiplied by a provider’s initial period rate sheet capacity.

    (iii) Supplemental nutrition assistance, as determined by 14 NYCRR 671.7(b)(10)(i)(e), and multiplied by twelve, such product to be multiplied by a provider’s initial period rate sheet capacity.

    (iv) The sum of subparagraphs (ii) and (iii) of this paragraph shall be deducted from the amount determined pursuant to subparagraph (i) of this paragraph. If such amount is negative, the State Supplement will be equal to zero. If such amount is positive, a provider shall receive the state supplement amount multiplied by the statewide budget neutrality factor for state supplement as calculated below.

    (v) Statewide budget neutrality factor for state supplement, which shall mean the sum of the State Supplement from all provider rate sheets in effect on June thirtieth, two thousand fourteen less six million dollars consistent with the savings plan developed by the workgroup established pursuant to Chapter 53 of the Laws of two thousand thirteen, divided by the sum of the State Supplement for all providers, as calculated pursuant to subparagraph (iv) of this paragraph.

    If the sum of the State Supplement from all provider rate sheets in effect on June thirtieth, two thousand fourteen is lower than the sum of the state supplement for all providers as calculated pursuant to subparagraph (iv) of this paragraph then the Statewide budget neutrality factor shall be applied. If such sum is greater, then no statewide budget neutrality factor for state supplement shall be applied.

    (7) Adjustments for July first, two thousand fourteen through October thirty-first, two thousand fourteen. The Department shall calculate the amount of reimbursement each provider would have received for July first through October thirty-first, two thousand fourteen for services under the methodology described in the November first, two thousand fourteen amendments to this Subpart. The Department or OPWDD shall pay each provider the difference between such reimbursement and the amount the provider was entitled to receive under this Subpart in effect from July first to October thirty-first, two thousand fourteen.

    (d) Components of rates for residential habilitation provided in supportive community residences.

    (1) Operating component. The operating component shall be based on allowable operating costs identified in the consolidated fiscal reports, and shall be inclusive of the following components:

    (i) Regional average direct care wage, which shall mean the quotient of base year salaried direct care dollars for each provider in a DOH region, aggregated for all such providers in such region, for all residential habilitation-supervised IRA, residential habilitation-supportive IRA, day habilitation services and ICF/DD services, divided by base year salaried direct care hours for each provider in a DOH region, aggregated for all such providers in such region, for all residential habilitation-supervised IRA, residential habilitation-supportive IRA, day habilitation services and ICF/DD services.

    (ii) Regional average employee-related component, which shall mean the sum of vacation leave accruals and total fringe benefits for the base year for each provider in a DOH region, aggregated for all such providers in such region, such sum to be divided by salaried direct care dollars for the base year for each provider in a DOH region, aggregated for all such providers in such region, and then multiplied by the applicable regional average direct care wage as determined by subparagraph (i) of this paragraph.

    (iii) Regional average program support component, which shall mean the sum of transportation related-participant staff travel, participant incidentals, expensed adaptive equipment, sub-contract raw materials, participant wages-non-contract, participant wages-contract, participant fringe benefits, staff development, supplies and materials-non-household, other-OTPS, lease/rental vehicle, depreciation-vehicle, interest-vehicle, other-equipment, other than to/from transportation allocation, salaried support dollars (excluding housekeeping and maintenance staff) and salaried program administration dollars for the base year for each provider in a DOH region, aggregated by all such providers in such region. Such sum shall be divided by the total base year salaried direct care dollars for all providers in a DOH region, and then multiplied by the applicable regional average direct care wage as determined pursuant to subparagraph (i) of this paragraph.

    (iv) Regional average direct care hourly rate-excluding general and administrative, which shall mean the sum of the applicable regional average direct care wage as determined pursuant to subparagraph (i) of this paragraph, the applicable regional average employee-related component as determined pursuant to subparagraph (ii) of this paragraph, and applicable regional average program support component as determined pursuant to subparagraph (iii) of this paragraph.

    (v) Regional average general and administrative component, which shall mean the sum of the insurance-general and agency administration allocation for the base year for each provider in a DOH region, aggregated for all such providers in such region, divided by (the sum of total program/site costs and other than to/from transportation allocation, less the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, total property-provider paid, housekeeping and maintenance staff, salaried clinical dollars, and contracted clinical dollars for the base year for each provider in a DOH region, aggregated for all such providers in such region). The regional average direct care hourly rate-exclusive of general and administrative costs, as determined pursuant to subparagraph (iv) of this paragraph, shall then be divided by (one minus the applicable regional average general and administrative quotient), from which the applicable regional average direct care wage hourly rate-excluding general and administrative, as computed in subparagraph (iv) of this paragraph shall be subtracted.

    (vi) Regional average direct care hourly rate, which shall mean the sum of the applicable regional average direct care wage, as determined pursuant to subparagraph (i) of this paragraph, the applicable regional average employee-related component as determined pursuant to subparagraph (ii) of this paragraph, the applicable regional average program support component as determined pursuant to subparagraph (iii) of this paragraph, and the applicable regional average general and administrative component computed in subparagraph (v) of this paragraph.

    (vii) Provider average direct care wage, which shall mean the quotient of salaried direct care dollars divided by the salaried direct care hours of a provider.

    (viii) Provider average employee-related component, which shall mean the sum of vacation leave accruals and fringe benefits of each provider, divided by a provider’s salaried direct care dollars, such quotient to be multiplied by the provider average direct care wage as computed in subparagraph (vii) of this paragraph.

    (ix) Provider average program support component, which shall mean the sum of transportation related-participant, staff travel, participant incidentals, expensed adaptive equipment, sub-contract raw materials, participant wages-non-contract, participant wages-contract, participant fringe benefits, staff development, supplies and materials-non-household, other-OTPS, lease/rental vehicle, depreciation-vehicle, interest-vehicle, other-equipment , other than to/from transportation allocation, salaried support dollars (excluding housekeeping and maintenance staff) and salaried program administration dollars of a provider. Such sum shall be divided by the salaried direct care dollars of such provider and such quotient shall be multiplied by the provider average direct care wage as computed in subparagraph (vii) of this paragraph.

    (x) Provider average direct care hourly rate-excluding general and administrative, which shall mean the sum of the provider average direct care wage as determined pursuant to subparagraph (vii) of this paragraph, the provider average employee-related component as determined pursuant to subparagraph (viii) of this paragraph, and the provider average program support component as determined pursuant to subparagraph (ix) of this paragraph for each provider.

    (xi) Provider average general and administrative component, which shall mean the sum of insurance-general and agency administration allocation for a provider, such sum to be divided by (the sum of total program/site costs and other than to/from transportation allocation less the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, total property-provider paid, housekeeping and maintenance staff, salaried clinical dollars, and contracted clinical dollars for the base year for a provider). The provider average direct care hourly rate-excluding general and administrative, as computed in subparagraph (x) of this paragraph, shall then be divided by (one minus the applicable provider average general and administrative quotient), from which the provider average direct care wage hourly rate-excluding general and administrative, as computed in subparagraph (x) of this paragraph, shall be subtracted.

    (xii) Provider average direct care hourly rate, which shall mean the sum of the provider average direct care wage, as determined pursuant to subparagraph (vii) of this paragraph, the provider average employee-related component as determined pursuant to subparagraph (viii) of this paragraph, the provider average program support component as determined pursuant to subparagraph (ix) of this paragraph, and the provider average general and administrative component as determined pursuant to subparagraph (xi) of this paragraph.

    (xiii) Statewide average direct care hours per person, which shall mean the total base year salaried and contracted direct care hours for all providers divided by total capacity for all providers, as such capacity is determined from the rate sheets for the base year and as pro-rated for partial year sites.

    (xiv) Statewide average direct hours per provider, which shall mean the product of the statewide average direct care hours per person, as determined pursuant to subparagraph (xiii) of this paragraph, the applicable provider acuity factor and the applicable provider rate sheet capacity for the base year, as pro-rated for partial year sites.

    (xv) Statewide budget neutrality adjustment factor for hours, which shall mean the quotient of the total base year salaried and contracted direct care hours for all providers, divided by the total of statewide average direct hours for all providers, as determined pursuant to subparagraph (xiv) of this paragraph.

    (xvi) Calculated direct care hours, which shall mean the product of the statewide average direct care hours per provider, as determined pursuant to subparagraph (xiv) of this paragraph, and the statewide budget neutrality adjustment factor for hours, as determined pursuant to subparagraph (xv) of this paragraph. Such product shall then be divided by the rate sheet capacity for the base year, pro-rated for partial year sites and such quotient multiplied by rate sheet capacity for the initial period.

    (xvii) Regional average clinical hourly wage, which shall mean the quotient of base year salaried clinical dollars for each provider in a DOH region, aggregated for all such providers in such region, divided by base year salaried clinical hours for each provider in a DOH region, aggregated for all such providers in such region.

    (xviii) Provider average clinical hourly wage, which shall mean the quotient of base year salaried clinical dollars of a provider divided by base year salaried clinical hours of such provider.

    (xix) Provider salaried clinical hours, which shall mean the quotient of base year salaried clinical hours of a provider, divided by the rate sheet capacity for the base year, pro-rated for partial year sites, such quotient to be multiplied by the rate sheet capacity for the initial period for such provider.

    (xx) Regional average contracted clinical hourly wage, which shall mean the quotient of base year contracted clinical dollars of each provider in a DOH region, aggregated for all such providers in such region, divided by the base year contracted clinical hours for each provider in a DOH region, aggregated for all such providers in such region.

    (xxi) Provider contracted clinical hours, which shall mean the quotient of a provider’s contracted clinical hours for the base year divided by rate sheet capacity for the base year, pro-rated for partial year sites, such quotient to be multiplied by rate sheet capacity for the initial period.

    (xxii) Provider direct care hourly rate-adjusted for wage equalization factor, which shall mean the sum of the provider average direct care hourly rate, as determined pursuant to subparagraph (xii) of this paragraph multiplied by seventy-five hundredths and the applicable regional average direct care hourly rate, as determined pursuant to subparagraph (vi) of this paragraph multiplied by twenty-five hundredths.

    (xxiii) Provider clinical hourly wage-adjusted for wage equalization factor, which shall mean the sum of the provider average clinical hourly wage, as determined pursuant to subparagraph (xviii) of this paragraph, multiplied by seventy-five hundredths and the applicable regional average clinical hourly wage, as computed in subparagraph (xvii) of this paragraph multiplied by twenty-five hundredths.

    (xxiv) Provider reimbursement for direct care hourly rate, which shall mean the product of the calculated direct care hours, as determined pursuant to subparagraph (xvi) of this paragraph, and the provider direct care hourly rate-adjusted for wage equalization factor, as computed in subparagraph (xxii) of this paragraph.

    (xxv) Provider reimbursement for clinical hourly wage, which shall mean the product of the provider salaried clinical hours, as determined pursuant to subparagraph (xix) of this paragraph and the provider clinical hourly wage-adjusted for wage equalization factor, as determined pursuant to subparagraph (xxiii) of this paragraph.

    (xxvi) Provider reimbursement for contracted clinical hourly wage, which shall mean the product of the provider contracted clinical hours, as determined pursuant to subparagraph (xxi) of this paragraph and the applicable regional average contracted clinical hourly wage, as determined pursuant to subparagraph (xx) of this paragraph.

    (xxvii) Provider operating revenue, which shall mean the sum of the provider reimbursement from direct care hourly rate, as determined pursuant to subparagraph (xxiv) of this paragraph, the provider reimbursement from clinical hourly wage, as determined pursuant to subparagraph (xxv) of this paragraph, and the provider reimbursement from contracted clinical hourly wage, as determined pursuant to subparagraph (xxvi) of this paragraph.

    (xxviii) Statewide budget neutrality adjustment factor for operating dollars, which shall mean the quotient of the operating revenue from all provider rate sheets in effect on June thirtieth, two thousand fourteen, divided by provider operating revenue for all providers, as computed in subparagraph (xxvii) of this paragraph.

    (xxix) Total provider operating revenue-adjusted, which shall mean the product of the provider operating revenue, as determined pursuant to subparagraph (xxvii) of this paragraph, and the statewide budget neutrality adjustment factor for operating dollars, as determined pursuant to subparagraph (xxviii) of this paragraph.

    The final monthly operating rate shall be determined by dividing the total provider operating revenue-adjusted, as determined pursuant to subparagraph (xxix) of this paragraph, by the applicable rate sheet capacity for the initial period and such quotient to be further divided by twelve.

    (2) Alternative operating cost component. For providers that did not submit a cost report or submitted a cost report that was incomplete

    for residential habilitation provided in a supportive community residence for the base year, the final monthly operating rate shall be a regional monthly operating rate. This rate shall be the sum of:

    (i) The product of the applicable regional average direct care hourly rate, as determined pursuant to subparagraph (vi) of paragraph (1) of this subdivision, and the applicable regional average direct care hours, which shall mean the quotient of base year salaried and contracted direct care hours for each provider in a DOH region, aggregated for all such providers in such region, divided by the rate sheet capacities for the base year, pro-rated for partial year sites for each provider in a DOH region, aggregated for all such providers in such region divided by twelve.

    (ii) The product shall then be added to the product of the applicable regional average clinical hourly wage, as determined pursuant to subparagraph (xvii) of paragraph (1) of this subdivision and the applicable regional average clinical hours, which shall mean the quotient of salaried and contracted clinical hours for the base year for each provider in a DOH region, aggregated for all such providers in such region, divided by the rate sheet capacities for the base year, pro-rated for partial year sites for each provider in a DOH region, aggregated for all such providers in such region divided by twelve.

    Such sum shall be multiplied by the statewide budget neutrality adjustment factor for operating dollars, as determined pursuant to subparagraph (xxviii) of paragraph (1) of this subdivision to determine the final regional monthly operating rate.

    (3) Facility cost component. The facility cost component shall include allowable facility costs identified in the consolidated fiscal reports and shall be inclusive of the following components:

    (i) Provider facility reimbursement, which shall mean the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation equipment, insurance-property and casualty, housekeeping and maintenance staff, and program administration property from the base year, divided by rate sheet capacity for the base year, pro-rated for partial year sites and such sum multiplied by rate sheet capacity for the initial period.

    (ii) The final monthly State Supplement shall be calculated in accordance with paragraph (6) of this subdivision, divided by the applicable rate sheet capacity for the initial period and such quotient to be further divided by twelve.

    (4) Alternative facility cost component. For providers that did not submit a cost report or submitted a cost report that was incomplete for residential habilitation services provided in a supportive community residence for the base year, the final monthly facility rate shall be a regional monthly facility rate which shall mean the quotient of the sum of food, repairs and maintenance, utilities, expensed equipment, household supplies, telephone, lease/rental equipment, depreciation, insurance – property and casualty, housekeeping and maintenance staff, and program administration property for the base year divided by the rate sheet capacity for the base year, pro-rated for partial year sites for each provider in a DOH region, aggregated for all such providers in such region. Such quotient shall be multiplied by rate sheet capacity for the initial year. The final monthly State Supplement shall be calculated in accordance with paragraph (6) of this subdivision, divided by the applicable rate sheet capacity for the initial period and such quotient to be further divided by twelve.

    (5) Capital cost component. (i) Capital costs shall be determined under 14 NYCRR Subpart 635-6.

    Note: The provision of this paragraph do not apply to capital approved by OPWDD prior to July first, two thousand fourteen.

    (ii) Initial rate. The rate shall include the approved appraised costs of an acquisition or fair market value of a lease, and estimated costs for renovations, interest, soft costs and start-up expenses. Such costs shall be included in the rate as of the date of certification of the site, continuing until such time as actual costs are submitted to the State. Estimated costs shall be submitted in lieu of actual costs for a period no greater than two years. If actual costs are not submitted to the State within two years from the date of site certification, the a