Capital Payments

(1) Nursing Facility Capital Payments. Beginning October 1, 2025, nursing facilities will receive capital payments calculated as follows, with exceptions as described in 101 CMR 206.05(2) through 101 CMR 206.05(5). (a) Calculate the sum of the allowable portion of capital costs during the base year, less any recoverable fixed cost income. Apply a cost adjustment factor as described in 101 CMR 206.03(1)(b). (b) Multiply the number of constructed capacity beds by the number of days in the rate year and then multiply the product by the greater of 90% or the actual utilization rate in the base year. (c) EOHHS will calculate the provider’s capital payment by dividing the result of 101 CMR 206.05(1)(a) by the result of 101 CMR 206.05(1)(b), subject to the limitations described in 101 CMR 206.05(4). (2) Nursing Facility Capital Payment Adjustments. Beginning October 1, 2025, nursing facilities will receive capital payment adjustments calculated as follows. (a) If a nursing facility’s capital payment as calculated in 101 CMR 206.05(1) is less than 90% of its capital payment as of September 30, 2025, the facility will receive the capital payment listed in 101 CMR 206.05(1), plus an upward adjustment equal to the difference between the capital payment as calculated in 101 CMR 206.05(1) and 90% of the facility’s capital payment as of September 30, 2025, subject to the limitations described in 101 CMR 206.05(4). (b) If a nursing facility’s capital payment as calculated in 101 CMR 206.05(1) is greater than 150% of its capital payment as of September 30, 2025, the facility will receive the capital payment calculated in 101 CMR 206.05(1), less a downward adjustment equal to the difference between the capital payment as calculated in 101 CMR 206.05(1) and 150% of the facility’s capital payment as of September 30, 2025. (3) Revised Capital Payment. (a) General Notification Requirements. All providers must notify the Center when they open, add new beds, renovate, or reopen beds. The notification must contain the provider’s name, address, vendor payment number, date of bed change, type of change, and description of project. (b) Request for Revised Capital Payment. Eligible providers may request a revised capital payment for capital costs associated with the change or renovation of licensed beds. Facilities that may request a revised capital payment include 1. new facilities that open pursuant to a determination of need and facilities with newly licensed beds that are added pursuant to a determination of need; 2. facilities with renovations made pursuant to a determination of need; 3. facilities that submitted detailed architectural or engineering plans for, or evidence of, applications made to local government agencies for planning, zoning, or building permits or other regulatory approvals, including approvals required by the Department of Public Health, required in connection with conversion of rooms with three or more residents to one- and two-bedded rooms or two-bedded rooms to one-bedded rooms. (c) Eligibility Requirements. A nursing facility specified in 101 CMR 206.05(3)(b)2. will be eligible for a revised capital payment if the facility has expended at least 50% of the maximum capital expenditure for an approved determination of need, or in the instance of a second request, at least 25% additional from the previous approved request and in the instance of a third request, only upon completion of the project. (d) Required Documentation. Providers meeting the criteria in 101 CMR 206.05(3)(b) must submit the following to the Center with its request for a revised capital payment, as well as any additional information that EOHHS determines necessary to calculate a revised capital payment: 1. a copy of the approved determination of need and any approved amendments, or, in the case of capital projects that do not require a determination of need, a detailed description of the project; 2. a copy of the construction contract; 3. a listing of construction costs; 4. copies of invoices and cancelled checks for construction costs; 5. a copy of the Department of Public Health’s licensure notification associated with the increase or decrease in licensed beds, as applicable; 6. a copy of the mortgage or financing obtained; 7. a copy of the calculation of the requested increase, the format of which may be specified by EOHHS; and 8. a listing of any assets such as land, building, improvements, or equipment that are either destroyed or no longer used for patient care. (e) Revised Capital Payment Calculation. Nursing facilities that meet the criteria listed in 101 CMR 206.05(3)(b) and that have submitted all required documentation under 101 CMR 206.05(3)(d) will be eligible for a revised capital payment in place of the capital rates calculated under 101 CMR 206.05(1), subject to the limitations of 101 CMR 206.05(4): 1. Adding the following costs: a. the allowed capital expenses associated with a project described in 101 CMR 206.05(3)(b), subject to the divisor described in 101 CMR 206.05(1)(b) adjusted for any increase or decrease in licensed beds; and b. the lesser of the following costs, subject to the divisor described in 101 CMR 206.05(1)(b) adjusted for any increase or decrease in licensed beds, i. 101 CMR 206.05(1); or ii. The sum of the amount calculated in 101 CMR 206.05(1) and the amount calculated in 101 CMR 206.05(2). 2. The revised capital payment must be the total calculated in 101 CMR 206.05(3)(c), and must be the new capital rate, in place of the rate calculated under 101 CMR 206.05(1) or 101 CMR 206.05(2), effective on the later of the date the facility submits their request for the revised capital payment, including all required documentation, or the effective date of the change in licensed beds. (4) Maximum Capital Payment. Capital payments must not exceed $50.00. (5) New or Relocated Nursing Facilities. A nursing facility that becomes operational on or after October 1, 2023, an existing nursing facility that replaces its current building on or after October 1, 2023, or an existing nursing facility that fully relocates to a newly constructed location on or after October 1, 2023, will be eligible for a capital payment in the amount of $50.00. Such facility will not be eligible for additional capital payments as listed 101 CMR 206.05(1) or for an adjustment to its capital payment as described in 101 CMR 206.05(2). (6) Licensed Bed Changes. A nursing facility will not receive an adjustment to its capital payment rate solely because of an increase or decrease in its number of licensed beds, except as described in 101 CMR 206.05(3)(b)3. (7) Rate Adjustments. EOHHS may adjust any capital payment upon EOHHS’s determination that there was a material error in the calculation of the payment or in the facility’s documentation of its capital costs.