N.M. Admin. Code § 8.312.3.12 - ESTABLISHMENT OF PROSPECTIVE PER-DIEM RATES
Prospective per diem rates will be established as follows and will be the lower of the amount calculated using the following formulas, or the ceiling:
A.
Base year:
Rebasing of the prospective per diem rate will take place every three years.
Therefore, the operating years under this plan will be known as year one, year
two and year three. Because rebasing is done every three years, operating year
four will again become year one, etc. Cost incurred, reported, audited or desk
reviewed for the provider's last fiscal year which falls in the calendar year
prior to year one will be used to rebase the prospective per-diem rate.
Rebasing of costs in excess of one hundred and ten percent of the previous
year's audited cost per diem times the index (as described further on in these
regulations) will not be recognized for calculation of the base year costs. For
implementation year one (effective July 1, 1984) the base year is the
provider's last available audited cost report prior to January 1, 1984.
Rebasing will occur out of cycle for rates effective January 1, 1996, using the
provider's FYE 1994 audited cost reports. The rate period January 1, 1996,
through June 30, 1996, will be considered year one. The rate period July 1,
1996, through June 30, 1997, will be considered year two, and the rate period
July 1, 1997, through June 30, 1998, will be considered year three. The
rebasing cycle will resume for rates effective July 1, 1998, and continue as
described in the first paragraph of this section. Pursuant to budget
availability, any changes to reimbursement, including the decision to rebase
rates will be at the department's discretion.
B.
Inflation factor to recognize
economic conditions and trends during the time period covered by the provider's
prospective per diem rate:
(1) Pursuant to
budget availability and at the department's discretion, an inflation factor may
be used to recognize economic conditions and trends. A notice will be sent out
every July informing each provider that a:
(a)
MBI will or will not be authorized; and
(b) the percentage increase if the MBI is
authorized.
(2) If
utilized, the index used to determine the inflation factor will be the center
for medicare and medicaid services (CMS) market basket index (MBI) or a
percentage up to the MBI.
(3) Each
provider's operating costs will be indexed up to a common point of 12/31 for
the base year, and then indexed to a mid-year point of 12/31 for operating year
one, if applicable. For out-of-cycle rebasing occurring for rates effective
January 1, 1996, through June 30, 1996, the mid-year point for indexing in
operating year one will be 3/31.
(4) The inflation factor for the period July
1, 1996, through June 30, 1997, will be the percentage change in the (MBI) for
the previous year plus two percentage points.
C.
Incentives to reduce increases in
costs: As an incentive to reduce the increases in the costs of
operation, the department will share with the provider in accordance with the
following formula, the savings below the operating cost ceiling in effect
during the state's fiscal year.
I = [1/2(M - N)] <= $2.00
where
M = current operating cost ceiling per diem
N - allowable operating per diem rate based on the base year's cost report
I = allowable incentive per diem
D.
Calculation of the prospective
per-diem rate: The following formulas are used to determine the
prospective per diem rate:
YEAR ONE
PR = BYOC x (1 + [DELTA] MBI) + I + FC
where
PR = prospective per diem rate
BYOC = allowable base year operating costs as described in A above, and indexed as described in B above.
NHI = the change in the MBI as described in B above
I = allowable incentive per diem
FC = allowable facility costs per diem
YEARS TWO and THREE
PR = (OP+ I) x (1 + [DELTA] MBI) + FC
where
PR = prospective per-diem rate
OP= allowable operating costs per diem
I = allowable incentive per diem
NHI = the change in the MBI as described in B above
FC = allowable facility costs per diem
E.
Effective dates of prospective
rates: Rates are effective July 1 of each year for each
facility.
F.
Calculation of
rates for existing providers that do not have 1983 actuals, and for
newly constructed facilities entering the program after July 1, 1984.
(1) For existing and for newly constructed
facilities entering the program that do not have 1983 actuals, the provider's
interim prospective per-diem rate will become the sum of:
(a) the applicable facility cost ceiling;
and
(b) the operating cost
ceiling.
(2) After six
months of operation or at the provider's fiscal year end, whichever comes
later, the provider will submit a completed cost report. This will be audited
to determine the actual operating and facility cost, and retroactive settlement
will take place. The provider's prospective per-diem rate will then become the
sum of:
(a) the lower of allowable facility
costs or the applicable facility cost ceiling; and
(b) the lower of allowable operating costs or
the operating cost ceiling.
(3) Such providers will not be eligible for
incentive payments until the next operating year one, after rebasing.
G.
Changes of provider by
sale of an existing facility:
(1) When
a change of ownership occurs, the provider's prospective per-diem rate will
become the sum of:
(a) the lower of allowable
facility costs determined by using the medicare principles of reimbursement, or
the facility cost ceiling; and
(b)
the operating cost established for the previous owner/operator, or the median
of operating costs for its category, whichever is higher.
(2) Such providers will not be eligible for
incentive payments until the next operating year one, after rebasing.
H.
Changes of provider by
lease of an existing facility:
(1) When
a change of ownership occurs, the provider's prospective per-diem rate will
become the sum of:
(a) the lower of allowable
facility costs or the facility cost ceiling, as defined by this plan;
and
(b) the operating cost
established for the previous owner/operator, or the median of operating costs
for its category, whichever is higher.
(2) Such providers will not be eligible for
incentive payments until the next operating year one, after rebasing.
I.
Sale/leaseback of an
existing facility: When a sale/leaseback of an existing facility occurs,
the provider's prospective rate will remain the same as before the
transaction.
J.
Replacement
of an existing facility: When an existing facility is replaced, the
provider's prospective rate will become the sum of:
(1) the lower of allowable facility costs or
the facility cost ceiling as defined by this plan; and
(2) the operating cost plus incentive payment
paid to the provider prior to the construction of the replacement
facility.
K.
Replaced facility re-entering the medicaid program:
(1) When a facility is replaced by a
replacement facility and the replaced facility re-enters the medicaid program
either under the same ownership or under different ownership, the provider's
prospective rate will become the sum of:
(a)
the median operating cost for its category; and
(b) the lower of allowable facility costs or
the applicable facility cost ceiling.
(2) Such providers will not be eligible for
incentive payments until the next operating year one, after rebasing.
L.
Closed facility
re-entering the medicaid program:
(1)
When a facility has been closed and re-enters the medicaid program under new
ownership, it shall be considered a change of ownership and either Subsection G
or Subsection H, whichever is applicable, will apply.
(2) When a facility has been closed and
re-enters the medicaid program under the same ownership within 12 months of
closure, the provider's prospective rate will be the same as prior to the
closing.
(3) When a facility has
been closed and re-enters the medicaid program under the same ownership more
than 12 months after closure, the provider's prospective rate will be the sum
of:
(a) the median operating cost for its
category; and
(b) the lower of
allowable facility costs or the applicable facility cost ceiling.
(4) Providers of such facilities
will not be eligible for incentive payments until the next operating year one,
after rebasing.
Notes
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