Kansas NF Rate Setting 2018 Update
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1 Kansas NF Rate Setting 2018 Update Prepared by: KDADS and Myers & Stauffer Kansas NF Rate Setting 2018 Update Outline/Goals: Rate Setting Process s Parameters for FY 2019 Quality Measures Incentive Resources 1
2 Rate Setting Process: Time Line Cost Reports submitted to KDADS by end of Feb. Desk Reviews begin in Feb. & completed by early May Proposed Rate Methodology published mid late April Comment Period runs mid late April through mid late May Rates to state and MCOs by end of May Final Methodology published early mid June July 1 rates sent to providers early mid June Field Audits conducted throughout year January 1 adjustments to state and MCO by December 1 st January 1 adjustments sent to providers early December Rate Setting Process: Rate Basics Facility Specific Cost Report Data Prospective Costs inflated to 07/31/18 Per Diem Rate 85% rule for homes over 60 beds Base Year System Average of
3 Rate Setting Process: Rate Basics Cost Centers Operating, Indirect Health Care, Direct Health Care Limits Cost Centers, RPPF, Owner/Admin Comp Add ons RPPF, Incentive Factor, Adjustments Case Mix DHC Limit, Semi Annual Adjustments Total Reported Costs, from cost reports Cost Report Adjustments, desk review/audit Total Adjusted Costs, costs less adjustments Total Inflated Adjusted Costs Total Combined Costs, total Days Used in Division, resident days for or 85% rule days Per Diem, Total Costs divided by Days 3
4 Indirect Healthcare is best example of general calculations It s 4 th section down from the top of the schedule. Few unique rules that apply to just this cost center. Includes room and board, housekeeping, activities, food, utilities etc. Total Reported Costs The amounts in the top row, Total Reported Costs, are taken directly from the cost reports for 2015, 2016, and This is the home s reported expenses for food, utilities, room and board, housekeeping, resident activities etc. 4
5 Cost Report Adjustments Each cost report is desk reviewed and may also be selected for audit. Any adjustments made during the desk review or audit will be shown on this line. Total Adjusted Costs This line just reflects the total reported costs adjusted for desk review or audit changes. 5
6 Total Inflated Adjusted Costs Inflation applied from the mid point of each cost period to 07/31/18. (2015 = 8.023%, 2016 = 5.747%, and 2017 = 2.793%). The Global Insight Skilled Nursing Facility Market Basket Index is used to determine the inflation. This line is the sum of the inflation and adjusted costs. Total Combined Base Costs This is the total of the inflated adjusted costs for the three years. 6
7 Days Used in Division IDHC This is the number that is divided into total costs to calculate a per diem. The days for each year are shown, subject to the 85% occupancy rule. Total of all three years is at the right. IDHC Per Diem The Total Combined Base Cost divided by Days Used in Division IDHC (total). Average inflated cost per day. 7
8 IDHC Per Diem Cost Limitation Determined by Median IDHC per diem cost plus 15%. IDHC Per Diem Rate (2) The lower of the IDHC per diem and the limit. 8
9 Cost Centers and Upper Payment Limits Catch spending beyond what is normal Percentage is greater for cost associated with patient care Operating and IDHC 85% Occupancy Rule Owner/Admin Limit Direct Healthcare CMI adjustment to total inflated adjusted costs 85% Occupancy Rule Applies only to homes with more than 60 beds And, only to Operating and Indirect Health Care costs excluding Utilities and Food If home s occupancy is less than 85% and they meet the qualifying criteria above Divide by 85% of Bed Days Available, rather than actual resident days 9
10 Direct Health Care Nursing supplies, DHC salaries RN, LPN, aides No inflation applied to Owner/Related Party comp Total CMI Adjusted Costs, costs adjusted to match statewide CMI Direct Health Care To make the CMI adjustment, the statewide average CMI is divided by the facility CMI and then multiplied by total inflated costs 2015: / x $3,437,289 = $2,901, : / x $3,258,648 = $2,680, : / x $3,466,029 = $3,018,601 10
11 Direct Health Care Allowable Per Diem, lesser of limit or per diem Medicaid Adjustment, matches the allowable per diem to the current quarter s Medicaid CMI Direct Health Care Medicaid Acuity Adjustment Quarterly Medicaid CMI values are averaged together The Average Medicaid CMI [a] is divided by Statewide Average CMI [b], then multiplied by the Allowable DHC per diem / x =
12 Direct Health Care Medicaid Acuity Adjustment / x = Recalculated for January 1 st based on the updated Medicaid CMI Medicaid Acuity Adjustment Divide Average Medicaid CMI by combined statewide avg CMI, then multiply by allowable DHC per diem / x = AVERAGE MEDICAID CMI STATEWIDE AVG CMI MEDICAID ACUITY ADJUSTMENT? ALLOWABLE DHC PER DIEM $
13 Medicaid Acuity Adjustment Final quarterly listing includes Medicaid CMI that will be used in rate calculations Medicaid Acuity Adjustment To calculate Jan 1 st DHC rate plug in average of 7/1 and 10/1 Medicaid CMIs AVERAGE MEDICAID CMI MEDICAID ACUITY ADJUSTMENT? / x = STATEWIDE AVG CMI ALLOWABLE DHC PER DIEM $
14 No CMI Adjustment Costs Facility A Facility B Facility C Per Diem Costs $ $ $ CMI Limit with no CMI adjustment, 130% of median $ X 130% = $ Per Diem Rates $ $ $ CMI Adjusted Costs Facility A Facility B Facility C Per Diem Costs $ $ $ CMI CMI Adjusted Cost $ $ $ Limit with no CMI adjustment, 130% of median $ X 130% = $ Per Diem Rates $ $ $
15 Real and Personal Property Fee Established from Ownership Costs in 1985 Rebase, $25,000 for homes <= 50 beds $50,000 for homes > 50 beds Limit is 105% of the statewide median, $9.80 Allowable RPPF, lesser of limit or fee Rate Calculation Calculation of Medicaid Rate Operating, IDHC, DHC and RPPF Total Incentive Factor PEAK 2.0 Bed Tax Adjustment Total Medicaid Rate 15
16 Parameters for FY 2019 Cost report data 2015 to 2017 Inflation from the midpoint of cost report year to 07/31/2018 Upper payment limits reset based on updated cost data Incentives calculated based on 2017 data Parameters for FY 2019 Upper Payment Limits Cost Center Limit Operating $ Indirect $ Direct $129.23* RPPF $ 9.80 * For the statewide average CMI of
17 Parameters for FY 2019 NF Incentive factor outcomes and add ons updated Incentive Outcome: Per Diem: 1) CMI adjusted staffing ratio > 75th percentile (5.14) or $3.00 CMI adjusted staffing < 75th percentile but improved > 10% $0.50 2) Staff retention rate > 75th percentile or (72%) $2.50 Staff retention rate < 75th percentile but reduced > 10% $0.50 3) Medicaid occupancy > 65% $0.75 4) Quality Measures > 75 th percentile or 640 $1.25 Maximum Incentive Per Diem Add on Available $7.50 Parameters for FY 2019 PEAK 2.0 ( ) 0 Foundations of Person centered Care ($0.50) I Pursuit of Person centered Care ($0.50) II Continuing Pursuit of Person centered Care ($1.00) III Person centered Care Home ($2.00) IV Sustained Person centered Care ($2.50) V Person centered Care Mentor ($3.00) 17
18 Quality Measures Incentive Decline in ADLs (Eating, Toileting, Transferring, Mobility) Decline in Ability to Move Independently on Unit High-Risk Residents with Pressure Ulcers Moderate to Severe Pain Antipsychotic Medications Falls with Major Injury Physical Restraints Indwelling Catheter Urinary Tract Infection Quality Measures Incentive Decline in Late Loss ADLs (Eating, Toileting, Transferring, Mobility) CMS assigns points ranging from for each QM based on quintiles and other criteria At or above the 75 th percentile (640) earns $1.25 per diem add-on 18
19 Resources: Regulations Kansas Administrative Regulations Accessible through KDOA Provider website: KDADS Provider Information Resource Website Listed under Rate Setting Regulations Code of Federal Regulations Accessible through GPO website: title42 vol1/content detail.html 42 CFR Part 483 Title 42 Public Health Chapter IV CMS/HHS (Parts ) Updated each October Resources: Communications KDADS Communications KDADS Website: Provider Information tab: Adult Care Homes Nursing Facilities Nursing Facility Medicaid/MediKan Rate List Rate Lists for each rate period Forms NF Financial and Statistical Report Forms Cost Report/Census Forms etc. 19
20 Resources: Communications Kansas Secretary of State (KS Register) Meyers & Stauffer Portal MSCL Help Desk KDADS Helpdesk KDADS Helpdesk Kansas Insurance Commission Health and Life Division KS Insurance Commission
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