Icf/Iid: Occupancy Adjustment Factor

Adjustments are to equitably allocate fixed costs for Medicaid patients when a facility falls below reasonable occupancy levels. No occupancy adjustment is made against costs used to calculate the property rental rate. Adjustments are made against all other property costs: (7-1-26) 01. Occupancy Levels. If a facility maintains an average occupancy of less than eighty percent (80%) of capacity, the total property costs not including cost paid for property rental rate, is prorated based on an eighty percent (80%) occupancy rate. A facility's average occupancy percentage is subtracted from eighty percent (80%) and the resultant percentage is multiplied by the total fixed costs to determine non-allowable fixed costs. When a provider changes the designed capacity, the average occupancy for the period before and after the change is computed for each period. If the designed capacity is increased, the increased number of beds will not be subject to this adjustment for the first six (6) months following their licensure. (7-1-26) 02. Occupancy Adjustment. Facility capacity is computed based on the greater of the largest number of beds a facility was licensed for during the reporting period or the largest number of beds for which the facility was licensed during calendar year 1981, except where a portion of the facility has been converted to use for nonroutine nursing home activities or the facility is newly constructed. If a facility's designed capacity changes, the number of beds used to determine occupancy is lowered by the capacity amount converted to non-routine ICF/IID activities. The new capacity is based on the number of beds approved by the certificate of need process less any capacity converted to non-routine ICF/IID activities. (7-1-26) 03. Fixed Costs. Occupancy adjustment to fixed costs is considered allowable and reimbursable when reported under property cost categories. (7-1-26) 04. New Facility. For newly licensed and occupied facilities, the first six (6) months occupancy level is not subject to an adjustment. (7-1-26)