Ch. 7, § 7. Per Diem Rate for New Nursing Facilities and When Ownership Changes

(a) New nursing facility. A new nursing facility is a newly constructed nursing facility that did not previously exist, a newly designated portion of a hospital which was not previously designated as a nursing facility, or an existing facility which was not previously certified. An addition to a certified nursing facility is not a "new facility." An existing nursing facility that constructs a new building to move into is not a new nursing facility but the new building may be subject to a re-age adjustment. (i) A new nursing facility per diem rate is calculated as follows: (A) Healthcare portion of rate. The same starting price as applied to other nursing facilities with a quarterly case mix adjustment using the new nursing facility's case mix scores will be applied. If the nursing facility does not have qualifying case mix data at the time per diem rates are calculated, the healthcare portion is calculated using the statewide Medicaid average case mix score from the prior quarter. (B) Capital portion of rate. A property rental rate based on the age of the building is applied. If the age cannot be determined at the time of rate setting or if the nursing facility does not supply requested data to calculate the age of the property, a property rental rate based on a 40 year old building is applied. This rate will not be adjusted retrospectively if a nursing facility supplies the requested data after the rate setting period. The rate will be adjusted at the next rate setting quarter if the nursing facility timely supplies the requested data. (C) Exempt portion of rate. The statewide average exempt portion from the previous quarter is applied. (D) Operating portion of rate. The same fixed price applied to other nursing facilities that quarter is applied. (ii) A new nursing facility's rate will be calculated in this manner until the nursing facility has a qualifying cost report that has been audited. At that time, the qualifying cost report will be used to set its rate effective with the July 1 rate cycle. (b) Change of Ownership. (i) When a nursing facility changes ownership, its per diem rate is calculated as follows: (A) Healthcare rate. The new owner will receive the same starting price as all other facilities with a quarterly case mix adjustment using the new owner's case mix scores. If the new owner does not have the qualifying case mix data at the time per diem rates are calculated, the healthcare costs will be calculated using the prior owner's Medicaid average case mix score from the most recently available quarter. (B) Capital rate. The new owner assumes the building age used for the property rental rate from the prior owner. (C) Exempt rate. The new owner will assume the exempt portion of the per diem rate using the most currently available audited data from the prior owner. (D) Operating rate. The same fixed price applied to other nursing facilities that quarter is applied. (ii) The rate will be calculated in this manner until the nursing facility has a qualifying cost report that has been audited. At that time, the qualifying cost report will be used to set its rate effective with the July 1 rate cycle. (iii) Record keeping. The former owner is responsible for maintaining all medical and financial records for one year after the date of the change of ownership. If the nursing facility is involved in an audit or administrative or judicial proceedings which require access to such records, the former owner must maintain the records for one year after completion of all proceedings, including any applicable appeal periods. (c) Effective dates of per diem rates. Per diem rates are established prospectively and shall remain in effect from the rate effective date until re-determined pursuant to this rule.