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Title: Section 86-4.14 - Ceilings on payments

Effective Date


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.


VOLUME A-2 (Title 10)