Nf: Distressed Facility

01. Department Determination. NFs in an under-served area, or addressing an under-served need, may receive an alternative rate. (7-1-26) 02. Discretionary Factors. A NF is not guaranteed increased payment. The Department considers factors for a higher rate on a NF-by-NF basis: (7-1-26) a. Prudent spending patterns and cost allocation as evidenced by a Department review of the NF’s accounts. (7-1-26) b. A NF diligently attempted to cover costs of care, hire qualified staff, and otherwise operate effectively and efficiently, but cannot due to causes beyond the NF’s reasonable control. (7-1-26) c. The same costs of care used to determine special rates are not applied toward a determination of distressed facility status. (7-1-26) d. The determination of distressed status focuses on whether the NF’s distress stems from patient care costs, and not expenses unrelated to patient care costs. (7-1-26) e. A NF’s payment cannot exceed the lower of its actual costs or customary charge to private-pay patients unless except by federal law. The Department’s cost caps can be exceeded through the distressed facility process up to the federal UPL. (7-1-26) 03. Annual Review. Distressed facility payments are short-term and redetermined for each fiscal year a NF requests a distressed facility rate. (7-1-26) 04. Prospective Application. Only NFs currently distressed or entering a period of distress are eligible. (7-1-26)