Utah Admin. Code R414-504-3 - Principles of Facility Case Mix Rates and Other Payments

Current through Bulletin 2022-07, April 1, 2022

The following principles apply to the payment of freestanding and provider -based nursing facilities for services rendered to qualified Medicaid patients, as defined in Rule R414-502. This rule does not affect the system for reimbursement for intensive -skilled Medicaid patient add-on amounts.

(1) A portion of total payments to nursing facilities for qualified Medicaid patients is based on a prospective facility case mix rate. In addition, these facilities shall be paid a flat basic operating expense payment. The balance of the total payments will be paid in aggregate to facilities as required by Section R414-504-3 based on other authorized factors, including property and behaviorally complex residents, in the proportion that the facility qualifies for the factor.
(2) Each quarter, the Department shall calculate a new case mix index for each nursing facility. The case mix index is based on three months of MDS assessment data. The newly calculated case mix index is applied to a new rate at the beginning of a quarter according to the following schedule:
(a) January, February, and March MDS assessments are used for July 1 rates.
(b) April, May, and June MDS assessments are used for October 1 rates.
(c) July, August, and September MDS assessments are used for January 1 rates.
(d) October, November, and December MDS assessments are used for April 1 rates.
(3) MDS data is used in calculating each facility's case mix index and upper payment limit (UPL) gap. This information is required by the state to calculate the case mix index. MDS is submitted by each facility and, as such, each facility is responsible for the accuracy of its data. Each facility shall ensure needed sections of the MDS are completed so that a PDPM score may be calculated. The Department may exclude inaccurate or incomplete MDS data from calculations.
(a) MDS assessments for patients who are eligible for the intensive skilled add-on are excluded from the case mix calculation.
(b) The state average case mix index excludes the following:
(i) a facility with less than 20% of its total census days as Medicaid days, as reported on its FCP or FRV data report; or
(ii) a facility having less than six months of data reported under Rule R414-401.
(c) The state average case mix index is used to set the rate for the following facilities:
(i) a facility with less than 20% of its total census days as Medicaid days, as reported on its FCP or FRV data report; or
(ii) a facility having less than six months of data reported under Rule R414-401.
(5) A facility may apply for a special add-on rate for behaviorally complex residents by filing a written request with the Division of Medicaid and Health Financing. The Department may approve an add-on rate if an assessment of the acuity and needs of the patient demonstrates that the facility is not adequately reimbursed by the RUGS score for that patient. The rate is added on for the specific resident's payment and is not subsumed as part of the facility case mix rate. Utah's Bureau of Long Term Services and Supports will make the determination as to qualification for any additional payment. The Division of Medicaid and Health Financing shall determine the amount of any add-on.
(6) Property costs are paid separately from the RUGS rate.
(7) Reimbursement for nursing home rates is in accordance with Attachment 4.19-D of the Utah Medicaid State Plan, which is incorporated by reference in Section R414-1-5.
(8) A sole community provider that is financially distressed may apply for a payment adjustment above the case mix index established rate. The maximum increase will be 7.5% above the average of the most recent Medicaid daily rate for all Medicaid residents in all freestanding nursing facilities in the state. The maximum duration of this adjustment is for no more than a total of 12 months per facility in any five-year period.
(a) The application shall propose what the adjustment should be and include a financial review prepared by the facility documenting:
(i) the facility's income and expenses for the past 12 months; and
(ii) specific steps taken by the facility to reduce costs and increase occupancy.
(b) Financial support from the local municipality and county governing bodies for the continued operation of the facility in the community is a necessary prerequisite to an acceptable application. The Department, the facility, and the local governing bodies may negotiate the amount of the financial commitment from the governing bodies, but in no case may the local commitment be less than 50% of the state share required to fund the proposed adjustment. Any continuation of the adjustment beyond six months requires a local commitment of 100% of the state share for the rate increase above the base rate. The applicant shall submit letters of commitment from the applicable municipality or county, or both, committing to make an intergovernmental transfer for the amount of the local commitment.

If the governmental agency receives donations in order to provide the financial contribution, it must document that the donations are bona fide as set forth in 42 CFR 433.54.

(c) The Department may conduct its own independent financial review of the facility before making a decision whether to approve a different payment rate.
(d) If the Department determines that the facility is in imminent peril of closing, it may make an interim rate adjustment for up to 90 days.
(e) The Department's determination shall be based on maintaining access to services and maintaining economy and efficiency in the Medicaid program.
(f) If the facility desires an adjustment for more than 90 days, it must demonstrate that:
(i) the facility has taken reasonable steps to reduce costs, increase revenue, and increase occupancy;
(ii) despite reasonable steps the facility is losing money and forecast to continue losing money; and
(iii) the amount of the approved adjustment will allow the facility to meet expenses and continue to support the needs of the community it serves, without unduly enriching any party.
(g) If the Department approves an interim or other adjustment, it shall notify the facility when the adjustment is scheduled to take effect and how much contribution is required from the local governing bodies. Payment of the adjustment is contingent on the facility obtaining a fully executed binding agreement with local governing bodies to pay the contribution to the Department.
(h) The Department may withhold or deny payment of the interim or other adjustment if the facility fails to obtain the required agreement before the scheduled effective date of the adjustment.
(9) A provider may challenge the rate set pursuant to this rule using the appeal in Rule R410-14. This applies to which rate methodology is used as well as to the specifics of implementation of the methodology. A provider must exhaust administrative remedies before challenging rates in any other forum.
(10) In developing payment rates, the Department may adjust urban and non-urban rates to reflect differences in urban and non-urban labor costs. The urban labor costs reimbursement cannot exceed 106% of the non-urban labor costs. Labor costs are as reported on the most recent FCP, but do not include FCP-reported management, consulting, director, and home office fees.
(11) The Department reimburses swing beds, transitional care unit beds, and small health care facility beds that are used as nursing facility beds, using the prior calendar year statewide average of the daily nursing facility rate.
(12) Unless specified otherwise, the Department may withhold Title XIX payments from providers if:
(a) there is a shortage in a resident trust account managed by the facility;
(b) the facility fails to submit a complete and accurate FCP as required by Attachment 4.19-D, Section 332 of the Utah Medicaid State Plan;
(c) the facility fails to submit timely, accurate MDS data;
(d) the facility owes money to the Division of Medicaid and Health Financing because of an overpayment, nursing care facility assessment, civil money penalty, or other offset; or
(e) the facility fails to respond within 10 business days to a written request for information.
(13) The Department shall provide written notice before withholding payments.
(14) When the Department rescinds withholding of payments to a provider, it will, without notice, resume payments according to the regular claims payment cycle.
(a) For ongoing operations, the Department will provide notice before withholding payments. The Department and provider may negotiate a repayment schedule acceptable to the Department for monies owed to the Department listed in Subsection R414-504-3(12)(a)(iv). The repayment schedule may not exceed 180 days.
(b) When the Department rescinds withholding of payments to a facility, it will resume payments according to the regular claims payment cycle.


Utah Admin. Code R414-504-3
Amended by Utah State Bulletin Number 2017-22, effective 11/1/2017 Amended by Utah State Bulletin Number 2019-2, effective 1/1/2019 Amended by Utah State Bulletin Number 2020-02, effective 1/1/2020 Amended by Utah State Bulletin Number 2020-19, effective 10/1/2020

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