Ch. 7, § 15. Price and Rate Setting - Legislative Appropriation

(a) Payment is a combination of a prospective fixed price system and a cost-based system with the healthcare costs subject to an acuity adjustment. The budget will be used to set the cost and price based rates as follows: (i) Property Price. The first round of legislative allocations will be used to determine the reimbursement necessary to fund the price-based property rental rate system. (ii) Exempt Cost Per Diem. The second round of allocations will be to determine the amount necessary to fund the exempt costs. (iii) Healthcare and Operating Prices. The balance of the appropriation will be used to fund healthcare and operating categories. The balance of the appropriation will be allocated between the operating and health care categories based on the statewide total percentage of audited or desk reviewed costs classified to these categories. (A) The operating price will be the same price for all nursing facilities regardless of their cost. (B) The healthcare price will begin with the same price to all nursing facilities, regardless of their cost. Each nursing facility's starting price will be further adjusted up or down based on the nursing facility's case mix acuity score for each quarter. (b) Per diem rates will be further adjusted by bed range group. Each group will receive a percentage adjustment so the resulting cost coverage averages of each group are within a maximum deviation of 5% of each other.