Determination of Inpatient Rate

(1) General. EOHHS shall determine an Inpatient Rate for each ICF. EOHHS shall establish an Initial Per Diem Rate using a base year ICF Cost Report inflated to the rate year pursuant to 101 CMR 129.05(3) and a Final Per Diem Rate using the rate year ICF Cost Report. (2) Calculation of the Inpatient Per Diem. (a) Allowable Total Patient Care Costs. Allowable Total Patient Care Costs are the sum of the ICF’s Total Inpatient Routine and Ancillary Costs plus Overhead costs associated with inpatient care as reviewed and adjusted pursuant to 101 CMR 129.04. (b) EOHHS shall divide the Allowable Total Patient Care Costs pursuant to 101 CMR 129.05(2)(a) by Total Patient Days. (c) The Initial Per Diem Rate may be adjusted pursuant to the provisions of 101 CMR 129.06(2)(e). (3) Cost Adjustment Factor. To calculate the Initial Inpatient Per Diem rate, EOHHS shall adjust the Allowable Base Year Total Patient Care Costs pursuant to 101 CMR 129.05(2)(a) to rate year inpatient care costs using a composite index comprised of two cost categories: labor and non-labor. EOHHS shall weight these categories according to the weights used by the Centers for Medicare and Medicaid Services (CMS) for PPS-exempt hospitals. EOHHS shall use the Massachusetts Consumer Price Index inflation proxy for the labor cost category and the CMS market basket for hospitals for the non-labor cost category.