Limitation on Allowable Capital Cost Overruns for New Institutional Health Services in Title XIX Reimbursement Rate Setting

PURPOSE: This rule establishes a limitation on the allowance of capital cost overruns in the construction of new institutional health services for Title XIX reimbursement rate setting purposes. (1) For implementation purposes of this rule, the following definitions shall apply: (A) Cost overrun is that part of project costs for new institutional health services in excess of ten percent (10%) of the initial project estimate; (B) Initial project estimate— 1. Is the dollar amount for which the Missouri Health Facilities Review Committee issued a Certificate of Need (CON); or 2. For those facilities deemed to have received a CON, is the dollar amount specified on the binding construction or purchase contract which was executed prior to October 1, 1980; (C) New institutional health services are those as specified in section 197.305(9), RSMo; and (D) Project costs are those costs subject to review under CON and include the general construction costs, site work, land acquisition costs, architectural and engineering fees, contingency costs, interest during construction, financing costs and equipment acquisition costs. (2) Project costs for new institutional health services in excess of ten percent (10%) of the initial project estimates shall not be considered in establishing a Title XIX per-diem rate for the first thirty-six (36) months that a facility receives payment for services provided under section 208.152, RSMo for any facility that applies for approval or consent for a cost overrun on or after November 11, 1982. This limitation is effective whether or not approval is granted under section 197.315.7, RSMo. If approval or consent is given, a facility’s cost overrun will be considered in establishing a Title XIX per-diem rate after the thirty-six (36)-month period in accordance with the provisions of the Title XIX reimbursement plan applicable to the provider type and subject to the limitations. (3) If a facility applies for approval or consent for a cost overrun prior to November 11, 1982, and subsequently receives the requisite approval or consent, the dollar amount of the cost overrun will be considered in establishing a Title XIX perdiem rate in accordance with the provisions of the Title XIX reimbursement plan applicable to the provider type and subject to the limitations of the plan, notwithstanding the provisions of section 197.357, RSMo. AUTHORITY: sections 207.020, RSMo Supp. 1993, 208.159, RSMo 1986 and 208.153, RSMo Supp. 1991.* This rule was previously filed as 13 CSR 40-81.082. Emergency rule filed Aug. 5, 1982, effective Aug. 15, 1982, expired Nov. 10, 1982. Original rule filed Aug. 5, 1982, effective Nov. 11, 1982. *Original authority: 207.020, RSMo 1945, amended 1961, 1965, 1977, 1981, 1982, 1986, 1993; 208.153, RSMo 1967, amended 1967, 1973, 1989, 1990, 1991; and 208.159, RSMo 1979.