DIRECT CARE STAFF ADJUSTMENT REPORT MEDICAID-PARTICIPATING NURSING HOMES

DIRECT CARE STAFF ADJUSTMENT REPORT MEDICAID-PARTICIPATING NURSING HOMES Division of Medicaid Agency for Health Care Administration March 2001

TABLE OF CONTENTS Background... 1 Implementation... 1 Methodology... 2 Phase Two... 3 Data Analysis... 3 APPENDIX Appendix A - Original Base Data Survey Letter To Providers, November 16, 1999... 6 Appendix B - Original Base Data Survey Instructions And Form... 7 Appendix C - Base Data Survey Second Request Letter To Providers, February 4, 2000... 9 Appendix D - Reconciliation Survey Letter To Providers, October 26, 2000... 10 Appendix E - Reconciliation Survey Instructions And Form... 11 Appendix F - Reconciliation Survey Second Request Letter, January 29, 2001... 13 March 2001 i Agency for Health Care Administration

BACKGROUND In 1999 the Legislature addressed a number of issues related to Florida nursing homes through provisions in House Bill 1971 (Chapter 99-394, Laws of Florida). In addition to creating a panel on Medicaid reimbursement for nursing homes, the legislation authorized a study of certified nursing assistant training, employment and retention and appropriated funding of $7.9 million for the period April 1 through June 30, 2000, to assist nursing homes in increasing the level of direct care staffing. In fiscal year 2000-01 the funding was annualized to a total of $31.7 million. The funds were to be used to help nursing homes recruit and retain qualified certified nursing assistants and licensed nurses who could improve the facilities capacity to provide quality care. Beginning April 1, 2000, the Agency for Health Care Administration, which manages the Medicaid program, disbursed the initial appropriation as an add-on to the patient care component of the per diem rate for each nursing home that participated in Medicaid, met the qualifying criteria, and agreed to participate. Per diem rates are established by the Agency based on cost reports submitted by the nursing homes. Under House Bill 1971, the Agency was directed to establish a formula for reimbursing nursing facilities for the cost of hiring additional certified nursing assistants and licensed nurses or for the cost of salary or benefit enhancements to retain such staff in these specific classes. The formula was to provide per diem rate increases in a ratio inversely proportionate to the facility s existing staffing level. Therefore, those facilities with lower staffing ratios were to receive more money than those with higher staffing ratios. The law required the Agency to track each facility s staffing increases or other direct care enhancements resulting from the appropriation for what is known as the direct care staffing adjustment (DCSA). IMPLEMENTATION A nursing home that wanted to receive the staffing adjustment had to meet four qualifying criteria: K The facility had to be an active Medicaid provider and had to submit data on direct care staffing, patient census and cost data for a base period of January 1 through June 30, 1999; K The facility had to formally notify the Agency that it wanted to participate in the staffing adjustment; K The facility had to submit a brief description of how it intended to meet the legislative intent in spending the staffing adjustment; and K The facility had to agree to provide follow-up documentation covering the period May 1 through October 31, 2000, to demonstrate how it had followed legislative intent. March 2001 1 Agency for Health Care Administration

In November 1999 the Agency sent a letter to all Medicaid nursing homes describing the provisions of House Bill 1971 and including the survey form to gather the data needed to establish a payment methodology for the staffing adjustments. (See Appendix 1) The form was developed in conjunction with the Florida Health Care Association and the Florida Association of Homes for the Aging. The letter also advised the facilities that they would be receiving a follow-up document to use in verifying the information used to derive the preliminary calculation of the staffing adjustment. At that point, each facility had to make a decision whether to participate. Those facilities that agreed to participate also agreed to provide a followup survey to demonstrate how the funds were spent. METHODOLOGY Using data from the completed surveys, which were due on November 30, 1999, the Agency calculated a preliminary DCSA for each facility. The staffing ratios for Certified Nurse Assistants (CNAs) and licensed nurses (LPNs and RNs) were calculated for each facility by dividing total staffing hours by total patient days. The annualized Medicaid days were multiplied by a minimum add-on of $0.50 to determine the minimum amount all facilities would receive. The total minimum amount for all providers was calculated. The remaining amount to be allocated was calculated by subtracting the total minimum add-on from the total amount of the DCSA. All facilities with a direct care staffing ratio of five hours or more of direct care staffing per patient day were assigned the value of 5 and received only the minimum add-on of $0.50 per day. Facilities with direct care staffing ratios of 2.3 staff hours per patient day or below were assigned a value of 2.3 and received the maximum add-on amount available. To achieve the inversely proportionate distribution, each facility s staffing ratio was subtracted from the assigned value of 5 to calculate an inverted hours per patient day. This provided an allocation methodology whereby those providers with lower staffing ratios had a higher figure for allocation purposes and providers with higher staffing ratios had a lower figure for allocation purposes. For each facility, the Agency multiplied its Medicaid patient days by the inverted hours per patient day to arrive at an unadjusted additional add-on amount. Those amounts were then adjusted proportionately so that the total amount for all providers equaled the remaining amount to be allocated. Therefore, each provider received a total DCSA that was at least $0.50 with a maximum adjustment of $2.81. The average add-on was $1.96 per Medicaid patient day. Because the supplements were calculated on an inverse ratio and related only to Medicaid beds, facilities with higher Medicaid utilization benefited most. Those with a March 2001 2 Agency for Health Care Administration

low Medicaid utilization rate might not wish to receive the additional funding because its effect would carry over to non-medicaid beds and ultimately could require them to spend significantly more than the additional Medicaid-related supplement would cover. By the response deadline of March 20, 2000, a total of 600 of the 648 eligible facilities had agreed to participate, and on April 1, 2000, the DCSA add-on was implemented. PHASE TWO In September 2000 the Agency sent forms to the 600 participating facilities for use in reporting their follow-up documentation for the period of May 1 through October 31, 2000. This was to be submitted in a format similar to that used to gather the base period data and was due to the Agency by November 30, 2000. To date all but six facilities have responded. The information has been partially analyzed. Further verification is being done to ensure that the facilities used the funds appropriately, whether any recoupment of funds will be necessary, and whether additional information may be needed to reach valid conclusions about the long-term effect on direct care staffing and patient care. Below is an analysis of some of the data. DATA ANALYSIS Data from the first and second reporting periods were compared at the request of the Florida Task Force on the Availability and Affordability of Long Term Care. Separate analyses were prepared for salaries, benefits, and full-time equivalents (FTEs). The major findings were that: K salaries and hours worked increased for certified nurse assistants and licensed nurses; K salaries and hours worked decreased for registered nurses; K turnover rates decreased in all staffing categories; and K nursing time per patient per day increased for CNAS and LPNS. Information provided by the facilities was analyzed in three categories: Salaries, Benefits, and Full-Time Equivalents. Below is a discussion of some of the findings from the data; however, some underlying factors are not apparent from this initial analysis and will require more in-depth review. It should be noted that the amounts listed below are differences between two six-month reporting periods and have not been annualized. Salaries Analysis The salaries analysis clearly shows that funds were used to enhance salaries of both CNAs and LPNs by approximate total per facility averages of $63,200 for CNAs and $58,700 for LPNs. Salaries for RNs decreased, indicating further analysis March 2001 3 Agency for Health Care Administration

is necessary. In nursing category salaries, 289 reported decreases in total RN salaries, 180 in total LPN salaries and 84 in total CNA salaries. All others reported either increases or no change. In reporting total employee hours paid, the facilities reported that direct care staffing hours rose by an average total of 5,184 hours per facility for the six month comparison periods. All three nursing categories showed increases. The employee salary per hour adjusted for overtime indicates that CNA salaries rose by an average of $0.87 per hour and LPNs by $0.91 per hour. The survey also reviewed changes in the level of nursing services facilities secured from temporary staffing agencies. Between the 1999 and the 2000 surveys the number of hours of CNA services purchased from staffing agencies dropped an average of 140 hours per facility. LPN time rose by 176 hours per facility, and RN time rose by 144 hours per facility. The survey results appear to support the conclusion that nursing homes maximized their staffing options by decreasing the more expensive RN hours and were able to hire more CNAs and LPNs to improve their staffing ratios by increasing both permanent and temporary staffing. It also may indicate that when RN positions became vacant, the vacancies were filled at lower salaries, resulting in the drop in the aggregate hourly rate reported in the RN category. Decreases in number of Medicaid patient days for some specific facilities may have affected the salary reports. Benefits Analysis Not surprisingly, the analysis of benefits offered to employees of the nursing homes as reflected in the two surveys parallels the salary survey. Improvements in benefits were more evident for CNAs and LPNs. Factors covered in the review were health insurance benefits, unemployment insurance, workers compensation, FICA contributions, and other fringe benefits, including bonuses. FTE Analysis The review of full time equivalent (FTE) positions in the facilities again showed the greatest change among CNAs. Overall, the facilities averaged an increase of 2.5 CNAs, 2.4 LPNs and 0.3 RNs. Turnover ratios at the facilities dropped for all direct care categories. With the combination of permanent and temporary staffing, the facilities on average were able to provide a total of almost 15 additional minutes of nursing care per patient per day. Additionally, direct care FTEs increased statewide by nearly 3,100, an average of approximately five direct care staff per facility. An analysis of the direct care hours also indicates that there was an increase of approximately 10,400 hours per year. Over half of these hours were CNA hours. The increase of 10,400 hours per year equates to more than 17 additional direct care hours per facility per day. March 2001 4 Agency for Health Care Administration

While the initial data analysis shows improvements in the amount of time spent on direct patient care, it may also indicate a drop in the amount of patient care being provided by registered nurses. This bears further examination in light of proposals under consideration by various groups that would set a minimum staffing requirement in the RN category. One concern is the number of facilities that reported decreases in categories that normally would have been expected to rise as a result of the additional funding, e.g., salaries and FTEs. Individual reports from each facility will be examined in detail to determine what factors caused decreases and whether any facility used the add-on for the purposes other than those intended by the Legislature. Steps are currently being taken to recoup DCSA amounts paid to facilities that failed to respond to the follow-up survey and those that failed to spend the DCSA appropriately. March 2001 5 Agency for Health Care Administration

APPENDIX A ORIGINAL BASE DATA SURVEY LETTER TO PROVIDERS Dear Nursing Home Administrator: November 16, 1999 Pursuant to laws of Florida 99-394 (House Bill 1971, Section 30), the Agency for Health Care Administration received additional appropriations to be dispersed beginning April 1, 2000 to assist nursing facilities to recruit and retain qualified patient care staff. In order to expend these funds the Agency must establish a payment methodology for reimbursing nursing facilities for the cost of hiring additional CNAs and licensed nurses or for the cost of salary or benefit enhancements to retain such staff. The payment methodology must be inversely proportionate which allows those facilities with lower staffing ratios to receive more funds than those with higher staffing ratios. The Agency in conjunction with the Florida Health Care Association (FHCA) and the Florida Association of Homes for the Aging (FAHA) has developed the attached form to collect the minimal data necessary to establish a payment methodology to comply with this new legislative requirement. The base reporting period to be used in deriving the formula is January 1 through June 30, 1999. We have enclosed a copy of the form for the base period data. We prefer you obtain the form electronically by contacting us at stephene@fdhc.state.fl.us to request an electronic copy of the survey. The format of the survey will be in Microsoft Excel, version 4.0. The completed survey may be returned to the same e-mail address. If you prefer, you may fax the hardcopy of the survey to our office at (850) 488-9353 or mail it to: The Agency for Health Care Administration, Attention: Edwin Stephens, 2727 Mahan Drive, Mail Stop #21, Building 3 Room 2149A, Tallahassee, FL 32308. Please return the completed form by e-mail, fax, or regular mail to the Agency no later than Tuesday, November 30, 1999. We anticipate sending a turn-around document so you can verify the information received as well as see the preliminary calculation of the dollar increase for your facility. At that time, you will be asked to make a determination as to whether or not you wish to participate in the program. If you choose to participate, you will be asked to provide projected annualized increases for such costs, using the same form, beginning April 1, 2000. If you have any questions regarding the data requested, please contact Carol Shotwell or if you experience difficulties with the electronic copy, please contact John Churchill at (850) 488-9350. Sincerely, Gary Crayton Deputy Director for Medicaid March 2001 6 Agency for Health Care Administration

APPENDIX B ORIGINAL BASE DATA SURVEY INSTRUCTIONS AND FORM INSTRUCTIONS FOR AHCA SURVEY BASE DATA FOR IMPLEMENTATION OF HB 1971 INCREASED NURSING FACILITY REIMBURSEMENT FOR STAFF RECRUITMENT & RETENTION PART I. BASE PERIOD DATA The requested data should be taken from the Facilities' accounting records for the period from January 1, 1999 through June 30, 1999. Payroll data may be reported either on an accrual basis or directly from payroll journals. It is recommended that a reconciliation to the payroll reports be available for AHCA verification and potential audit. INPUT FIELDS Note: Columns B, C, and D should include information for CNAs, LPNs, and RNs that are reportable through the patient care component and that are typically reported for minimum staffing standards (i.e. exclude DON). (Rows 1 & 2; Sum of B, C, and D will be less than Col. A) ROW COL DESCRIPTION 1 A Total Salary Expense for All Employees of the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 B Total Salary Expense for CNAs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 C Total Salary Expense for LPNs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 D Total Salary Expense for RNs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 2 A Total Paid Hours for All Employees of the Facility 2 B Total Paid Hours for CNAs Employed by the Facility 2 C Total Paid Hours for LPNs Employed by the Facility 2 D Total Paid Hours for RNs Employed by the Facility 4 B Total Overtime Expense for CNAs Employed by the Facility 4 C Total Overtime Expense for LPNs Employed by the Facility 4 D Total Overtime Expense for RNs Employed by the Facility 5 B Total Paid Overtime Hours for CNAs Employed by the Facility 5 C Total Paid Overtime Hours for LPNs Employed by the Facility 5 D Total Paid Overtime Hours for RNs Employed by the Facility 7 B Total Agency Hours Purchased for CNAs 7 C Total Agency Hours Purchased for LPNs 7 D Total Agency Hours Purchased for RNs 9 A Total FICA Expense for the Facility 10 A Total Unemployment Insurance Expense for the Facility 11 A Total Health Insurance Expense for the Facility 12 A Total Workers Compensation Expense for the Facility 13 A Total Other Benefits Paid for the Facility 14 A Total Patient Days 15 A Total Medicaid Patient Days 16 A Number of Employees Hired for the Period 16 B Number of CNAs Hired for the Period 16 C Number of LPNs Hired for the Period 16 D Number of RNs Hired for the Period March 2001 7 Agency for Health Care Administration

PROVIDER NAME: MEDICAID PROVIDER NUMBER: Report in this part the actual costs of direct care staffing, by employment category from January 1, 1999 through June 30, 1999. Direct Staffing Costs and Hours by Employment Category - 1/1/99-6/30/99 Column A Column B Column C Column D Row Data From 1/1/99-6/30/99 Total Facility CNAs LPNs RNs Row 1 Employee Total Salary Cost Row 2 Employee Total Hours Paid Row 3 Employee Total Salary/Hour Row 4 Employee Overtime Salary Cost Row 5 Employee Overtime Hours Row 6 Employee Salary/Hour Adj for OT Row 7 Agency Hours Purchased Row 8 % of Salaries Benefit Costs by Employment Category - 1/1/99-6/30/99 Column A Column B Column C Column D Row Data From 1/1/99-6/30/99 Total Facility CNAs LPNs RNs Row 9 FICA Row 10 Unemployment Insurance Row 11 Health Insurance Row 12 Workers Compensation Row 13 Other Fringe Benefits Paid Other Data and Supporting Calculations - 1/1/99-6/30/99 Column A Column B Column C Column D Row Data From 1/1/99-6/30/99 Total Facility CNAs LPNs RNs Row 14 Total Patient Days Row 15 Medicaid Patient Days Row 16 New Hires Row 17 FTEs Row 18 Turnover Ratio Row 19 Employee Hours Per Patient Day Row 20 Agency Hours Per Patient Day Row 21 Total Hours Per Patient Day March 2001 8 Agency for Health Care Administration

APPENDIX C BASE DATA SURVEY SECOND REQUEST LETTER TO PROVIDERS Dear Nursing Home Administrator: Re: FINAL REQUEST February 4, 2000 Approximately two-thirds of nursing facilities responded to our initial survey request. We have been asked to send one final survey request due February 18, 2000. Pursuant to laws of Florida 99-394 (House Bill 1971, Section 30), the Agency for Health Care Administration received additional appropriations to be dispersed beginning April 1, 2000 to assist nursing facilities to recruit and retain qualified patient care staff. In order to expend these funds the Agency must establish a payment methodology for reimbursing nursing facilities for the cost of hiring additional CNAs and licensed nurses or for the cost of salary or benefit enhancements to retain such staff. The payment methodology must be inversely proportionate which allows those facilities with lower staffing ratios to receive more funds than those with higher staffing ratios. The Agency in conjunction with the Florida Health Care Association (FHCA) and the Florida Association of Homes for the Aging (FAHA) has developed the attached form to collect the minimal data necessary to establish a payment methodology to comply with this new legislative requirement. The base reporting period to be used in deriving the formula is January 1 through June 30, 1999. We have enclosed a copy of the form for the base period data. We prefer you obtain the form electronically by contacting us at stephene@fdhc.state.fl.us to request an electronic copy of the survey. The format of the survey will be in Microsoft Excel, version 4.0. To expedite the completed survey, return it to the same e-mail address. If necessary, fax the hardcopy of the survey to our office at (850) 488-9353 or mail it to: The Agency for Health Care Administration, Attention: Edwin Stephens, 2727 Mahan Drive, Mail Stop 21, Building 3 Room 2149A, Tallahassee, FL 32308. Our experience with the first survey indicates that the following information and suggestions are also essential for proper processing and verification: 1) Please ensure that your Medicaid provider number is correct (e.g. 0213456-00). The address of the facility would also be helpful. 2) Please submit one copy per facility, i.e., determine whether the home office, accounting firm, or facility staff is to be responsible for completing the survey. 3) Provide a contact person with phone number. Be sure to keep a copy of the survey for your records. We anticipate sending a turn-around document so you can see the preliminary calculation of the dollar increase for your facility. At that time, you will be asked to make a determination as to whether or not you wish to participate in the program. If you choose to participate, you will be asked to provide projected increases for such costs, using the same form, for a specified future six-month time period. If you have any questions regarding the data requested, please contact Edwin Stephens or if you experience difficulties with the electronic copy, please contact John Churchill at (850) 488-9350. Sincerely, Gary Crayton Deputy Director for Medicaid Enclosure March 2001 9 Agency for Health Care Administration

APPENDIX D RECONCILIATION SURVEY LETTER TO PROVIDERS Dear Nursing Home Administrator: October 26, 2000 Pursuant to laws of Florida 99-394 (House Bill 1971, Section 30), the Agency for Health Care Administration established a payment methodology for reimbursing nursing facilities for the cost of hiring additional CNAs and licensed nurses or for the cost of salary or benefit enhancements to retain such staff. The initial increase in rate was effective April 1, 2000, to those providers who provided base data for the period January 1 through June 30, 1999, and subsequently chose to participate in the Direct Care Staffing Adjustment (DCSA). Our records indicate that your facility agreed to participate in the DCSA and accordingly you are required to document how the additional funding was spent. The base period for the reconciliation is May 1, 2000 through October 31, 2000. Excess costs above the facilities average wage rate (the agency premium) does not meet legislative intent and will be excluded from the reconciliation of the DCSA. Be sure to use the same accounting method used for the initial survey, cash or accrual, for the follow-up survey. We have enclosed a copy of the form for the reconciliation of base period data. We prefer you request an electronic copy of the survey by contacting us at reavism@fdhc.state.fl.us. The completed survey may be returned to the same e-mail address. You may fax your response to (850) 488-9353. You may also mail it to: The Agency for Health Care Administration, Attn: Marilyn Reavis, 2727 Mahan Drive, Mail Stop 21, Tallahassee, Florida, 32308. The completed survey must be returned no later than November 30, 2000. If you fail to timely provide the completed survey form, your facility s DCSA will be recouped and your facility will no longer be eligible for the DCSA effective January 1, 2001. If your facility failed to spend the DCSA appropriately, the difference will be recouped and your DCSA will be adjusted downward effective January 1, 2001. If you have any questions, please contact Carol Shotwell at (850) 414-2759. Sincerely, BS/ds/cbs Enclosure Bob Sharpe Acting Deputy Director for Medicaid March 2001 10 Agency for Health Care Administration

PART I. BASE PERIOD DATA APPENDIX E RECONCILIATION SURVEY INSTRUCTIONS AND FORM INSTRUCTIONS FOR AHCA SURVEY BASE DATA FOR RECONCILIATION OF THE DIRECT CARE STAFFING ADJUSTMENT (DCSA) ADD-ON INCREASED NURSING FACILITY REIMBURSEMENT FOR STAFF RECRUITMENT & RETENTION Generally, the requested data should be taken from the Facilities' accounting records for the period from May 1, 2000 through October 31, 2000. Payroll data may be reported either on an accrual basis or directly from payroll journals. However, you may report the number of new hires subsequent to 6/30/99 if the positions are still filled since this would be considered a recurring cost that would carry over into the expenses reported between May 1 and October 1, 2000. It is recommended that a reconciliation to the payroll reports and personnel records be available for AHCA verification and potential audit. INPUT FIELDS Note: Columns B, C, and D should include information for CNAs, LPNs, and RNs that are reportable through the patient care component and that are typically reported for minimum staffing standards (i.e. exclude DON). (Rows 1 & 2; Sum of B, C, and D will be less than Col. A) ROW COLUMN DESCRIPTION 1 A Total Salary Expense for All Employees of the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 B Total Salary Expense for CNAs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 C Total Salary Expense for LPNs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 1 D Total Salary Expense for RNs Employed by the Facility (Including Overtime, Vacation, Holiday, Sick, and All Other Pay) 2 A Total Paid Hours for All Employees of the Facility 2 B Total Paid Hours for CNAs Employed by the Facility 2 C Total Paid Hours for LPNs Employed by the Facility 2 D Total Paid Hours for RNs Employed by the Facility 4 B Total Overtime Expense for CNAs Employed by the Facility 4 C Total Overtime Expense for LPNs Employed by the Facility 4 D Total Overtime Expense for RNs Employed by the Facility 5 B Total Paid Overtime Hours for CNAs Employed by the Facility 5 C Total Paid Overtime Hours for LPNs Employed by the Facility 5 D Total Paid Overtime Hours for RNs Employed by the Facility 7 B Total Agency Hours Purchased for CNAs 7 C Total Agency Hours Purchased for LPNs 7 D Total Agency Hours Purchased for RNs 9 A Total FICA Expense for the Facility 10 A Total Unemployment Insurance Expense for the Facility 11 A Total Health Insurance Expense for the Facility 12 A Total Workers Compensation Expense for the Facility 13 A Total Other Employee Benefits Paid for by the Facility 14 A Total Patient Days 15 A Total Medicaid Patient Days 16 A Number of Employees Hired Subsequent to 6/30/99 with Position Still Filled at 5/1/00. (See explanation above) 16 B Number of CNAs Hired Subsequent to 6/30/99 with Position Still Filled at 5/1/00. (See explanation above) 16 C Number of LPNs Hired Subsequent to 6/30/99 with Position Still Filled at 5/1/00. (See explanation above) 16 D Number of RNs Hired Subsequent to 6/30/99 with Position Still Filled at 5/1/00. (See explanation above) March 2001 11 Agency for Health Care Administration

PART I. BASE PERIOD DATA PROVIDER NAME: PROVIDER NUMBER: Report in this part the actual costs of direct care staffing, by employment category from May 1 through October 31, 2000. Direct Staffing Costs and Hours by Employment Category - 5/1/00-10/31/00 Column A Column B Column C Column D Row Data From 5/1/00-10/31/00 Total Facility CNAs LPNs RNs Row 1 Employee Total Salary Cost Row 2 Employee Total Hours Paid Row 3 Employee Total Salary/Hour #DIV/0! #DIV/0! #DIV/0! Row 4 Employee Overtime Salary Cost Row 5 Employee Overtime Hours Row 6 Employee Salary/Hour Adj for OT #DIV/0! #DIV/0! #DIV/0! Row 7 Agency Hours Purchased Row 8 % of Salaries #DIV/0! #DIV/0! #DIV/0! #DIV/0! Benefit Costs by Employment Category - 5/1/00-10/31/00 Column A Column B Column C Column D Row Data From 5/1/00-10/31/00 Total Facility CNAs LPNs RNs Row 9 FICA #DIV/0! #DIV/0! #DIV/0! Row 10 Unemployment Insurance #DIV/0! #DIV/0! #DIV/0! Row 11 Health Insurance #DIV/0! #DIV/0! #DIV/0! Row 12 Workers Compensation #DIV/0! #DIV/0! #DIV/0! Row 13 Other Fringe Benefits Paid #DIV/0! #DIV/0! #DIV/0! Other Data and Supporting Calculations - 5/1/00-10/31/00 Column A Column B Column C Column D Row Data From 5/1/00-10/31/00 Total Facility CNAs LPNs RNs Row 14 Total Patient Days Row 15 Medicaid Patient Days Row 16 New Hires Row 17 FTEs 0.00 0.00 0.00 0.00 Row 18 Turnover Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! Row 19 Employee Hours Per Patient Day #DIV/0! #DIV/0! #DIV/0! #DIV/0! Row 20 Agency Hours Per Patient Day #DIV/0! #DIV/0! #DIV/0! #DIV/0! Row 21 Total Hours Per Patient Day #DIV/0! #DIV/0! #DIV/0! #DIV/0! Accounting Method: Cash Accrual March 2001 12 Agency for Health Care Administration

APPENDIX F RECONCILIATION SURVEY SECOND REQUEST LETTER Dear Nursing Home Administrator: January 29, 2001 Re: FINAL REQUEST Provider Number: Certified Receipt Number: According to our records, you did not provide a follow-up response to the Direct Care Staff Adjustment Survey that was due November 30, 2000. We recognize that there may be some matching problems if there has been a change of ownership between June 1999 and October 31, 2000. We have been asked to send one final survey request due February 7, 2001. Pursuant to laws of Florida 99-394 (House Bill 1971, Section 30), the Agency for Health Care Administration received additional appropriations to be dispersed beginning April 1, 2000 to assist nursing facilities to recruit and retain qualified patient care staff. In order to expend these funds the Agency established a payment methodology for reimbursing nursing facilities for the cost of hiring additional CNAs and licensed nurses or for the cost of salary or benefit enhancements to retain such staff. The Agency in conjunction with the Florida Health Care Association (FHCA) and the Florida Association of Homes for the Aging (FAHA) developed the attached form to collect the minimal data necessary to establish a payment reconciliation to comply with this new legislative requirement. The base reporting period to be used in deriving the reconciliation is May 1, 2000 through October 31, 2000. We have enclosed a copy of the form for the base period data. We prefer you obtain the form electronically by contacting us at reavism@fdhc.state.fl.us to request an electronic copy of the survey. The format of the survey will be in Microsoft Excel, version 4.0. To expedite the completed survey, return it to the same e-mail address. If necessary mail it by overnight mail or other expedited service to: The Agency for Health Care Administration, Attention: Marilyn Reavis, 2727 Mahan Drive, Mail Stop 21, Room 2147A, Tallahassee, FL 32308. Our experience with the first survey indicates that the following information and suggestions are also essential for proper processing and verification: 4) Please ensure that your Medicaid provider number is correct (e.g. 0213456-00). The address of the facility would also be helpful. 5) Please submit one copy per facility, i.e., determine whether the home office, accounting firm, or facility staff is to be responsible for completing the survey. 6) Provide a contact person with phone number. Be sure to keep a copy of the survey for your records. Failure to provide a response survey will result in recoupment of any funds received for the Medicaid direct care staffing add-on and cancellation of the add-on in your reimbursement rate effective January 1, 2001. If you have any questions regarding the data requested, please contact Marilyn Reavis or Carol Shotwell at (850) 414-2759. BS/jo/cs Enclosure Sincerely, Bob Sharpe, Acting Deputy Secretary for Medicaid March 2001 13 Agency for Health Care Administration