ARC 4740C

ARC 4740C

HUMAN SERVICES DEPARTMENT[441]

Notice of Intended Action

Proposing rule making related to Medicaid payments to nursing facilities

and providing an opportunity for public comment

The Human Services Department hereby proposes to amend Chapter 81, "Nursing Facilities," Iowa Administrative Code.

Legal Authority for Rule Making

This rule making is proposed under the authority provided in Iowa Code section 249A.4.

State or Federal Law Implemented

This rule making implements, in whole or in part, Iowa Code section 249A.4.

Purpose and Summary

The Department proposes these amendments in order to provide clarification on the treatment of depreciation when a change of nursing facility ownership occurs. The proposed amendments also clarify leasing arrangements, update the Iowa Medicaid Enterprise (IME) mailing address, and make changes to reflect current operations of the IME.

Fiscal Impact

Without having all of the lessors' financial data related to ownership of the facilities in leasing arrangements and comparing to lease expenses being paid by the facilities, it would be impossible to determine what the impact of these rules would be on the facilities. However, given the scope of the change coupled with the fact that providers do not receive reimbursement at full cost through their per diem, the rule is expected to have a relatively minimal impact.

Jobs Impact

After analysis and review of this rule making, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rule making would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 441—1.8(17A,217).

Public Comment

Any interested person may submit written comments concerning this proposed rule making. Written comments in response to this rule making must be received by the Department no later than 4:30 p.m. on November 26, 2019. Comments should be directed to:

Public Hearing

No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)"b," an oral presentation regarding this rule making may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rule making by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rule making at its regular monthly meeting or at a special meeting. The Committee's meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

The following rule-making actions are proposed:

Item 1. Amend subrule 81.6(6) as follows:

81.6(6) Census of public assistance recipients Medicaid members. Census figures of public assistance recipients Medicaid members shall be obtained on the last day of the month ending the reporting period.

Item 2. Rescind paragraph 81.6(11)"j" and adopt the following new paragraph in lieu thereof:

j. For financial and statistical reports received after [the effective date of these rules], the depreciation, as limited in this rule, may be included as an allowable patient cost.

(1)Limitation on calculation. Depreciation shall be calculated based on the tax cost using only the straight-line method of computation and recognizing the estimated useful life of the asset as defined in the most recent edition of the American Hospital Association Useful Life Guide.

(2)Limitation — full depreciation. Once an asset is fully depreciated, no further depreciation shall be claimed on that asset.

(3)Change of ownership. Depreciation is further limited by the limitations in subrule 81.6(12).

Item 3. Rescind paragraph 81.6(11)"m" and adopt the following new paragraph in lieu thereof:

m. For financial and statistical reports received after [the effective date of these rules], the following definitions, calculations, and limitations shall be used to determine allowable rent expense on a cost report.

(1)Landlord's other expenses. Landlord's other expenses are limited to amortization, mortgage interest, property taxes unless claimed as a lessee expense, utilities paid by the landlord unless claimed as a lessee expense, property insurance, and building maintenance and repairs.

(2)Reasonable rate of return. Reasonable rate of return means the historical cost of the facility in the hands of the owner when the facility first entered the Medicaid program multiplied by the 30-year Treasury bond rate as reported by the Federal Reserve Board at the date of lease inception.

(3)Nonrelated party leases. When the operator of a participating facility rents from a party that is not a related party, as defined in paragraph 81.6(11)"l," the allowable cost report rental expense shall be the lesser of:

1.Lessor's annual depreciation as identified in paragraph 81.6(11)"j" plus the landlord's other expenses, plus a reasonable rate of return; or

2.Actual rent payments.

(4)Related party leases. When the operator of a participating facility rents from a related party, as defined in paragraph 81.6(11)"l," the allowable cost report rental expense shall be the lesser of:

1.Lessor's annual depreciation as identified in paragraph 81.6(11)"j" plus the landlord's other expenses; or

2.Actual rent payments.

Item 4. Amend subparagraph 81.6(16)"h"(5) as follows:

(5)Submission of request. A facility shall submit a written request for the capital cost per diem instant relief add-on, the enhanced non-direct care rate component limit, or a preliminary evaluation of whether a project may qualify for additional reimbursement to the Iowa Medicaid Enterprise, Provider Cost Audit and Rate Setting Unit, 100 Army Post Road P.O. Box 36450, Des Moines, Iowa 50315. A qualifying facility may request one or both types of additional reimbursement.

1. to 3. No change.

Item 5. Rescind paragraph 81.10(4)"h" and adopt the following new paragraph in lieu thereof:

h. Ventilator patients.

(1)Definition. For purposes of this paragraph only, "ventilator patients" means Medicaid-eligible patients who, as determined by the quality improvement organization, require a ventilator at least six hours every day, are inappropriate for home care, and have medical needs that require skilled care.

(2)Reimbursement. In-state nursing facilities shall receive reimbursement for care of ventilator patients equal to the sum of the Medicare-certified hospital-based nursing facility rate plus the Medicare-certified hospital-based nursing facility non-direct care rate component as defined in subparagraph 81.6(16)"f"(3). Facilities may continue to receive this reimbursement at this rate for 30 days after a ventilator patient is weaned from a ventilator if, during the 30 days, the patient continues to reside in the facility and continues to meet skilled care criteria.

Item 6. Amend paragraph 81.10(5)"a" as follows:

a. Supplies or services that the facility shall provide:

(1)Nursing services, social work services, activity programs, individual and group therapy, rehabilitation or habilitation programs provided by facility staff in order to carry out the plan of care for the resident.

(2)Services related to the nutrition, comfort, cleanliness and grooming of a resident as required under state licensure and Medicaid survey regulations.

(3)Medical equipment and supplies including wheelchairs except for customized wheelchairs for which separate payment may be made pursuant to 441—subparagraph 78.10(2)"a"(4), 441—paragraph 78.10(2)"d," medical supplies except for those listed in 441—paragraph 78.10(4)"b," oxygen except under circumstances specified in 441—paragraph 78.10(2)"a," and other items required in the facility-developed plan of care.

(4)Nonprescription drugs ordered by the physician. except for those specified in 441—paragraph 78.1(2)"f."

(5)Fees charged by medical professionals for services requested by the facility that do not meet criteria for direct Medicaid payment.

Item 7. Amend paragraph 81.13(5)"e" as follows:

e. Privacy and confidentiality. The resident has the right to personal privacy and confidentiality of personal and clinical records.

(1)Personal privacy includes accommodations, medical treatment, written and telephone communications, personal care, visits, and meetings of family and resident groups, but this does not require the facility to provide a private room for each resident.

(2)The facility must respect the resident's right to personal privacy, including the right to privacy in the resident's oral (that is, spoken or sign language), written, and electronic communications.

(2) (3)Except as provided in subparagraph (3)(4) below, the resident may approve or refuse the release of personal and clinical records to any person outside the facility.

(3) (4)The resident's right to refuse release of personal and clinical records does not apply when the resident is transferred to another health care institution or record release is required by law. to the following:

●The release of personal and clinical records to a health care institution to which the resident is transferred; or

●A record release that is required by law.

Item 8. Rescind paragraph 81.13(5)"i" and adopt the following new paragraph in lieu thereof:

i. Mail. The resident has the right to send and receive mail, and to receive letters, packages and other materials delivered to the facility for the resident, whether delivered by a postal service or by other means, including the right to:

(1)Privacy of such communications consistent with this section; and

(2)Access to stationary, postage, and writing implements at the resident's own expense.

Item 9. Adopt the following new paragraph 81.13(5)"q":

q. Electronic communication. The resident has the right to have reasonable access to and privacy in the resident's use of electronic communications, including, but not limited to, email and video communications, and for Internet research:

(1)If accessible to the facility;

(2)At the resident's expense, if any additional expense is incurred by the facility to provide such access to the resident; and

(3)To the extent that such use may comply with state and federal law.

Item 10. Amend subparagraph 81.13(9)"b"(7) as follows:

(7)Automated data processing requirement.

1. to 3. No change.

4.The facility must transmit MDS data in the ASCII format specified by CMS.