N.Y. Comp. Codes R. & Regs. Tit. 10 §§ 86-2.40

Current through Register Vol. 46, No. 45, November 2, 2024

Section 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 subdivisions (ac)(2) and (ad) of this section, 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 section 86-2.10(a)(13) of this Subpart ("HBF

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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 percent 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 percent of either:

(i) the direct price of HBF

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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 percent of Direct Price (b)	Direct HBF +300 Bed Price (c)	50 percent 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 percent of Direct Price (b)	Direct HBF +300 Bed Price (c)	50 percent 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 percent of Direct Price (b)	Direct -300 Bed Price (c)	50 percent 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 percent of Direct Price (b)	Direct -300 Bed Price (c)	50 percent 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 percent
January 1, 2013	14.963800 percent
January 1, 2014	11.339480 percent
January 1, 2015	10.305120 percent
January 1, 2016	9.893250 percent
January 1, 2017	9.485290 percent

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 percent of a facility specific direct WEF and 50 percent of a regional direct WEF.

(i) The facility specific direct WEF shall be calculated as follows:

1 / (( Facility Specific Wage Ratio/ Wage Index) Click to view image 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 one 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 percent 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) 30 minutes of certified nurse aide time for the impaired cognition A category;

(ii) 40 minutes of certified nurse aide time for the impaired cognition B category; and

(iii) 25 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 percent of the case mix for all facilities; and

(ii) 50 percent 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.

(i) For the case mix periods beginning on and after July 1, 2021, the case mix adjustment to the direct component of the price shall be made in January and July of each calendar year and shall use all Medicaid-only case mix data submitted to CMS applicable to the previous six-month period (e.g., April - September for the January case mix adjustment; October - March for the July case mix adjustment).

(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 previous 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, and/or other agents as authorized by the Department.

(9) For case mix periods beginning on and after July 1, 2021, 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 and submitted to CMS is complete and accurate.

(n) The indirect component of the price shall consist of a blended rate to be determined as follows:

(1) 50 percent 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 percent of either:

(i) the indirect HBF

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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 percent of Indirect Price (b)	Indirect HBF +300 Bed Price (c)	50 percent 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 percent of Indirect Price (b)	Indirect -300 Bed Price (c)	50 percent 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 percent
January 1, 2013	14.963800 percent
January 1, 2014	11.339480 percent
January 1, 2015	10.305120 percent
January 1, 2016	9.893250 percent
January 1, 2017	9.485290 percent

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 percent of a facility specific indirect WEF and 50 percent 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.

(3) The facility specific non-wage ratio shall be calculated by subtracting from one 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.

(3) The regional non-wage ratio shall be calculated by subtracting from one 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 percent 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 subdivision (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 10 or less.

(2) A per diem add-on in the amount of $17 for each patient whose body mass index is greater than 35.

(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 subdivision (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 percent, in year two it shall be 2.5 percent, in year three it shall be 5.0 percent, in year four it shall be 7.5 percent and in year five it shall be 10.0 percent. 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 percent to 50 percent 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 percent 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 12 month period for up to a combined aggregate of 14 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 10 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 $40 million for the State fiscal year beginning April 1, 2012, 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 21, sufficient to achieve such $40 million in savings for each such State fiscal year.

(v) Notwithstanding any other provision of this subdivision, and subject to the availability of Federal financial participation, for services provided 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 made: only with respect to patients who are receiving hospice services within the facility; at 50 percent of the Medicaid rate otherwise payable to the facility with regard to such days of care; and for up to a combined aggregate of 14 days for any 12-month period.

(vi) Notwithstanding any other provision of this subdivision, and subject to the availability of Federal financial participation, for services provided 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 leave of absence shall be made: at 95 percent of the Medicaid rate otherwise payable to the facility with regard to such days of care; and for up to a combined aggregate of 10 days for any 12-month period.

(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 12 months of operation at an occupancy level of 90 percent 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 12 month cost report. Nothing in this subparagraph shall be understood as exempting specialty facilities which have not yet achieved 90 percent 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).

N.Y. Comp. Codes R. & Regs. Tit. 10 §§ 86-2.40

Adopted, New York State Register February 19, 2014/Volume XXXVI, Issue 7, eff. 2/19/2014

Amended New York State Register November 2, 2016/Volume XXXVIII, Issue 44, eff. 11/2/2016

Amended New York State Register May 29, 2019/Volume XLI, Issue 22, eff. 5/29/2019

Amended New York State Register June 2, 2021/Volume XLIII, Issue 22, eff. 6/2/2021