Sec. 10.09.10.12. Rate Calculation — Nursing Service Costs

A. The Nursing Service cost center includes all nursing expenses related to the direct provision of patient care.

B. The Department shall initially establish Nursing Service prices for the rate period January 1, 2015, through June 30, 2015, and thereafter rebase the Nursing Service prices between every 2 and 4 rate years. Prices may be rebased more frequently if the Department determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or if a significant change in provider behavior or costs has resulted in payment that is inequitable across providers. The Department shall rebase based on the following steps:

(1) The indexed costs shall be calculated as set forth in Regulation .09B(1)-(3) of this chapter;

(2) Each cost report's indexed Nursing Service costs shall be divided by the actual days of nursing care to arrive at the indexed Nursing Service cost per diem;

(3) The indexed Nursing Service cost per diem shall be normalized to the Statewide average case mix index by multiplying the indexed Nursing Service cost per diem by the facility’s normalization ratio calculated as the Statewide average case mix index divided by the cost report period case mix index rounded to four decimals which creates the Normalized Nursing Cost per diem;

(4) For each reimbursement class, each cost report's Medicaid resident days shall be used in the array of cost per diems identified in §B(3) of this regulation to calculate the Medicaid day weighted median using the method established in Regulation .09B(5) of this chapter;

(5) The final price for Nursing Service costs for each reimbursement class is calculated as the geographic regional Medicaid day weighted median Nursing Service cost multiplied by 1.0825; and

(6) For years between periods when the prices are rebased, the final price for Nursing Service costs shall be adjusted as set forth in Regulation .09D of this chapter.

C. The final Nursing Service rate for each nursing facility for each quarter is calculated as follows:

(1) Determine the Nursing Service price for the facility’s geographic region;

(2) Calculate an initial nursing facility rate by multiplying the price by the facility average Medicaid case mix index divided by the Statewide average case mix index;

(3) Calculate a Medicaid adjusted Nursing Service cost per diem by multiplying the per diem identified under §B(2) or C(5) of this regulation by the Medicaid case mix adjustment ratio calculated as the facility average Medicaid case mix index divided by the cost report period case mix index rounded to four decimals;

(4) Calculate the final Nursing Service rate as the initial nursing facility rate reduced by any positive difference between 95 percent of the initial nursing facility rate and the Medicaid adjusted Nursing Service cost per diem; and

(5) For years between periods when the prices are rebased, the indexed Nursing Service cost per diem identified under §B(2) of this regulation shall be adjusted as set forth in Regulation .09D of this chapter.

D. The reimbursement classes for the Nursing Service cost center are specified under Regulation .30C of this chapter.

E. Resident Rosters.

(1) A nursing facility shall electronically transmit MDS assessment information in a complete, accurate, and timely manner.

(2) The Department shall provide a preliminary resident roster to a nursing facility based on the facility’s transmitted MDS assessment information for a calendar quarter on the fifth day of the second month following the end of the calendar quarter, provided that the nursing facility has transmitted the MDS assessment information by the 15th day following the end of the calendar quarter.

(3) The distribution of the preliminary resident roster shall serve as notice of the MDS assessments transmitted and provide an opportunity for the nursing facility to correct and transmit any missing MDS record.

(4) The Department shall provide a final resident roster to a nursing facility based on the facility’s transmitted MDS assessment information for a calendar quarter, provided that the nursing facility has transmitted the MDS assessment information by the 25th day of the second calendar month following the end of the calendar quarter.

(5) The Department may not consider MDS assessment information for the purpose of reimbursement rate calculations for a calendar quarter that is not submitted by the 25th day of the second calendar month following the end of the calendar quarter, except as provided in §E(6) of this regulation.

(6) The Department may only grant an exception to compliance with the electronic MDS assessment transmission due dates if the delay has been caused by fire, flood, act of God, or other good cause.

(7) The Department or its designated contractor shall distribute preliminary and final resident rosters according to the following schedule:

Resident Roster Quarter	Preliminary Resident Roster Distributed	Facility’s Revised Resident Roster Transmission Due	Final Resident Roster Distributed
January 1 through March 31	May 5	May 25	June 15
April 1 through June 30	August 5	August 25	September 15
July 1 through September 30	November 5	November 25	December 15
October 1 through December 31	February 5	February 25	March 15

F. Case Mix Index Calculation.

(1) The Department shall use the resource utilization group to adjust Nursing Service costs and to determine each nursing facility’s Nursing Service rate component.

(2) The Department shall adjust a nursing facility's case mix reimbursement rates quarterly based on the change in case mix of each facility according to the following schedule:

(a) The facility average Medicaid case mix index obtained from January 1 through March 31 shall be used to adjust rates effective July 1 through September 30 of the same calendar year;

(b) The facility average Medicaid case mix index obtained from April 1 through June 30 shall be used to adjust rates effective October 1 through December 31 of the same calendar year;

(c) The facility average Medicaid case mix index obtained from July 1 through September 30 shall be used to adjust rates effective January 1 through March 31 of the following calendar year; and

(d) The facility average Medicaid case mix index obtained from October 1 through December 31 shall be used to adjust rates effective April 1 through June 30 of the following calendar year.

(3) If the Department or its contractor determines that a nursing facility has delinquent MDS resident assessments, for purposes of determining both facility CMI averages, the assessments shall be assigned the case mix index associated with the RUG group “BC1” or its successor.

(4) A delinquent MDS shall be assigned a CMI value equal to the lowest CMI in the RUG classification system, or its successor.

(5) For each resident roster quarter, the Department shall calculate a Statewide average case mix index and a Statewide average Medicaid case mix index from all final resident rosters.

(6) A Medicaid case mix index equalizer shall be used to prevent any aggregate increase or decrease in expected State fiscal year Medicaid program expenditures for the rate quarters beginning every October, January and April, as follows:

(a) The Statewide average Medicaid case mix index for the July rate quarter shall be divided by the Statewide average Medicaid case mix index for the rate quarter identified in §F(2) of this regulation to determine the Medicaid case mix index equalizer for the quarter;

(b) Each facility average Medicaid case mix index for use in the rate quarter for each nursing facility shall be multiplied by the Medicaid case mix index equalizer to result in a facility Medicaid equalized case mix index; and

(c) The facility Medicaid equalized case mix index shall be used in place of the facility Medicaid case mix index in the calculation of the initial and final Nursing Service rate in §C of this regulation for every October, January, and April rate quarter.

(7) To determine cost report period case mix index for cost reporting periods starting before the midpoint of a calendar quarter, the associated quarterly resident roster period CMIs are used. If a cost report end date is before the midpoint of a calendar quarter, the associated quarterly resident roster period CMIs are not used.

G. Assignment of Different Geographic Region.

(1) The Department may approve a provider's request to be included in a different Nursing Service cost center geographic region of this chapter upon review of sufficient documentation. Documentation shall show that the assigned geographic region is not appropriate for the provider and that economic conditions have placed the provider directly in competition with facilities in a geographic region other than the one to which the provider has been assigned by the Department. Payment of higher wages, or higher total expenditures, is not in itself sufficient to demonstrate that the provider is subject to economic conditions different from other providers in its reimbursement class.

(2) All approved waivers for geographic regions shall be effective for the following State fiscal year for the purpose of establishing the final Nursing Service rate in §C of this regulation,

(3) Nursing Service prices established in §B of this regulation shall be based on all facilities in a geographic region that do not have an approved waiver to be included in a different geographic region plus facilities with an approved waiver to receive prices in that geographic region.