Direct Care Cost Quotient

(1) Beginning October 1, 2020, nursing facilities must have a Direct Care Cost Quotient (DCC-Q), as described in 101 CMR 206.12(2), of at least 75%. For the rate year beginning October 1, 2022, a nursing facility rate will be subject to a downward adjustment if the facility failed to be at or above the 75% DCC-Q threshold for the period of July 1, 2021, through June 30, 2022. For rate years beginning on or after October 1, 2023, a nursing facility rate will be subject to a downward adjustment if the facility fails to be at or above the 75% DCC-Q threshold in the previous full fiscal year. For rate years beginning on or after October 1, 2026, a nursing facility rate will be subject to a downward adjustment if the facility fails to be at or above the 75% DCC- Q threshold in the previous full calendar year. (2) The DCC-Q will be calculated by dividing certain direct care workforce expenses, such as nursing, dietary, restorative therapy, or social worker staff expenses, by the facility’s total revenue, excluding the revenue for non-nursing facility lines of business and subtracting the User Fee Assessments, certain federal and state payments, certain prescription drug expenses, and certain other ancillary costs related to services provided to Medicare residents, to be identified via administrative bulletin or other written issuance. (a) A multiplier may be applied to one or more direct care workforce position types as an incentive. A multiplier must be calculated by multiplying the cost associated with a given direct care workforce position type in the numerator by 1.5 or more, but not to exceed 3. (b) The workforce position types eligible for any multiplier described in 101 CMR 206.12(2) and the magnitude of such multiplier in calculating the DCC-Q may be established by EOHHS via administrative bulletin or other written issuance. (3) All nursing facilities, including facilities in 101 CMR 206.12(5), will be required to submit a final compliance report by March 1 of each year and an interim compliance report by July 31 of each year. The interim report will be used to inform nursing facilities if they are on track to meet the 75% DCC-Q threshold set forth in 101 CMR 206.12(1). The final compliance report will be used for determining whether the facility met that threshold. (4) The downward adjustment to the rate will be applied in the following rate year to facilities that failed to meet the 75% DCC-Q threshold. Such downward adjustment will be calculated as follows. (a) For every 1% below the 75% DCC-Q threshold, a 0.5% downward adjustment will be applied to the facility’s nursing and operating standard payments at each PDPM nursing case mix category. (b) The maximum downward adjustment calculated in 101 CMR 206.12(3)(a) may be no more than 5% of the facility’s nursing and operating standard payments at each PDPM nursing case mix. EOHHS may apply the maximum downward adjustment of 5% in the following rate year for facilities that fail to submit the final report by the due date established in 101 CMR 206.12(3). (c) EOHHS will not adjust any downward adjustment under 101 CMR 206.12(4) solely because a facility under-reported certain direct care workforce expenses or over-reported its revenue in its final DCC-Q compliance report. (5) Nursing facilities that had less than 5,000 Massachusetts Medicaid Days, as reported on their Quarterly User Fee Assessment Forms for the period of April 1, 2024, through March 31, 2025, will be exempt from the downward adjustment set forth in 101 CMR 206.12(4). For rate years beginning on or after October 1, 2026, nursing facilities that had less than 5,000 Massachusetts Medicaid Days, as reported on their Quarterly User Fee Assessment Forms for the period of January 1, 2025, through December 31, 2025, will be exempt from the downward adjustment set forth in 101 CMR 206.12(4). (6) EOHHS may issue an administrative bulletin or other written issuance to clarify provisions of 101 CMR 206.12, and to provide further detail on the types of staffing and direct care expenditures that qualify towards the DCC-Q and the data reporting requirements.