Haw. Code R. § 17-1739.2-12 - Transition of new providers and new beds into the PPS

(a) A new provider or a provider with new beds shall eventually have its basic PPS rates calculated in the same manner as other providers. The transition will begin with the first rebasing in which the new provider or provider with new beds has a base year cost report that reflects a full twelve months of operations.

(b) Unless the provider is eligible for the grandfathered direct nursing and G&A components, the G&A and direct nursing components of the provider's basic PPS rates shall be calculated in the same manner as existing providers. This calculation shall include the application of the component ceilings.

(c) For new providers or providers that added new beds, the capital component of the basic PPS rates subject to the capital component ceilings shall be determined as follows:

(1) The new provider or provider with new beds shall receive the lesser of the following two options as the capital component of its basic PPS rates:

(A) Its facility-specific capital per diem costs calculated in the same manner as existing providers (excluding the application of the capital component ceiling); or

(B) Its grandfathered capital component (excluding the application of the capital component ceiling); provided, however, that if the provider's facility-specific capital per diem amount after the application of the capital component ceiling is higher than its grandfathered capital component, then the provider shall receive the higher amount as the capital component of its basic PPS rates.

(2) In order to implement the preceding section, the department shall identify the capital component of the basic PPS rates for new providers that existed immediately prior to the implementation of the FY 98 rebasing. That amount, which is the grandfathered capital component, shall be calculated as follows:

(A) The department shall compare the new provider's projected per diem costs, which were used to establish its initial PPS rates, with its actual capital per diem costs as indicated on the base year cost report to determine whether the projected capital costs were reasonable. If the department concludes that the projections were unreasonable, then the department may adjust the grandfathered capital component accordingly;

(B) If the new provider's projected aggregate costs in all three PPS rate components exceeded one hundred twenty five percent of the sum of the statewide weighted averages, then the grandfathered capital component shall be reduced pro rata. That reduction shall be accomplished by multiplying the projected capital per diem by the

(C) capital component reduction factor; and

(D) After applying the capital component reduction factor, the new provider's initial projected capital per diem amount shall be increased by the inflation factor to remove the effects of varying fiscal year ends and to inflate the per diem to the PPS year. That amount shall be the capital component of the new provider's basic PPS rates.

(3) The department shall follow the same general procedure in calculating the portion of the capital component for new beds that was used to calculate the blended capital component for providers with new beds. That process shall include the following steps:

(A) Identifying the grandfathered capital component;

(B) If appropriate, applying the capital component reduction factor;

(C) Determining whether the facility-specific or grandfathered capital component rate is appropriate; and

(D) Using the appropriate amount to calculate a "blended" capital per diem amount for the provider.

(d) A provider that added new beds and meets the defined eligibility tests is entitled to have its direct nursing and general administrative components adjusted as defined below:

(1) In order to be eligible for the grandfathered direct nursing and G&A components, a provider must meet the following requirements:

(A) The provider must have both old and new beds ;

(B) The provider must have a full twelve months of historical costs for the new beds reflected in the base year cost report;

(C) Immediately prior to the effective date of the FY 98 rebasing, the provider must have had in effect a "blended" basic PPS rate that included the costs of both the old and new beds; and

(D) The provider's adjusted PPS rate for FY 98 (excluding the NF and OBRA 87 adjustments) is less than its total PPS rate immediately prior to the rebasing plus one-half the FY 98 inflation adjustment.

(2) A provider who meets the eligibility tests defined above shall receive the grandfathered direct nursing and G&A adjustment. As part of the calculation to determine the amount of the adjustment, one-half of the inflation adjustment for FY 98 is included. For FY 98 only, no other inflation adjustment shall be included in calculating the provider's adjusted PPS rates. Thereafter, the provider shall receive the full inflation adjustment in calculating its adjusted PPS rates.

Notes

Haw. Code R. § 17-1739.2-12

[Eff 09/01/03] (Auth: HRS § 346-59; 42 U.S.C. §1396 a) (Imp: 42 C.F.R. §447.252)