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To amend section 5111.20 and to enact section | 1 |
5111.205 of the Revised Code to revise the types | 2 |
of costs included in determining nursing | 3 |
facilities' Medicaid reimbursement rates. | 4 |
Section 1. That section 5111.20 be amended and section | 5 |
5111.205 of the Revised Code be enacted to read as follows: | 6 |
Sec. 5111.20. As used in sections 5111.20 to 5111.34 of the | 7 |
Revised Code: | 8 |
(A) "Allowable costs" are those costs determined by the | 9 |
department of job and family services to be reasonable and do not | 10 |
include fines paid under sections 5111.35 to 5111.61 and section | 11 |
5111.99 of the Revised Code. | 12 |
(B) "Ancillary and support costs" means all reasonable costs | 13 |
incurred by a nursing facility other than direct care costs or | 14 |
capital costs. "Ancillary and support costs" includes, but is not | 15 |
limited to, costs of activities, social services, pharmacy | 16 |
consultants, habilitation supervisors, qualified mental | 17 |
retardation professionals, program directors, medical and | 18 |
habilitation records, program supplies, incontinence supplies, | 19 |
food, enterals, dietary supplies and personnel, laundry, | 20 |
housekeeping, security, administration, medical equipment, | 21 |
utilities, liability insurance, bookkeeping, purchasing | 22 |
department, human resources, communications, travel, dues, license | 23 |
fees, subscriptions, home office costs not otherwise allocated, | 24 |
legal services, accounting services, minor equipment, | 25 |
26 | |
advertising, informational advertising, start-up costs, | 27 |
organizational expenses, other interest, property insurance, | 28 |
employee training and staff development, employee benefits, | 29 |
payroll taxes, and workers' compensation premiums or costs for | 30 |
self-insurance claims and related costs as specified in rules | 31 |
adopted by the director of job and family services under section | 32 |
5111.02 of the Revised Code, for personnel listed in this | 33 |
division. "Ancillary and support costs" also means the cost of | 34 |
equipment, including vehicles, acquired by operating lease | 35 |
executed before December 1, 1992, if the costs are reported as | 36 |
administrative and general costs on the facility's cost report for | 37 |
the cost reporting period ending December 31, 1992. | 38 |
(C) "Capital costs" means costs of ownership and, in the case | 39 |
of an intermediate care facility for the mentally retarded, costs | 40 |
of nonextensive renovation. | 41 |
(1) "Cost of ownership" means the actual expense incurred for | 42 |
all of the following: | 43 |
(a) Depreciation and interest on any capital assets that cost | 44 |
five hundred dollars or more per item, including the following: | 45 |
(i) Buildings; | 46 |
(ii) Building improvements that are not approved as | 47 |
nonextensive renovations under section 5111.251 of the Revised | 48 |
Code; | 49 |
(iii) Except as provided in division (B) of this section, | 50 |
equipment; | 51 |
(iv) In the case of an intermediate care facility for the | 52 |
mentally retarded, extensive renovations; | 53 |
(v) Transportation equipment. | 54 |
(b) Amortization and interest on land improvements and | 55 |
leasehold improvements; | 56 |
(c) Amortization of financing costs; | 57 |
(d) Except as provided in division (K) of this section, lease | 58 |
and rent of land, building, and equipment. | 59 |
The costs of capital assets of less than five hundred dollars | 60 |
per item may be considered capital costs in accordance with a | 61 |
provider's practice. | 62 |
(2) "Costs of nonextensive renovation" means the actual | 63 |
expense incurred by an intermediate care facility for the mentally | 64 |
retarded for depreciation or amortization and interest on | 65 |
renovations that are not extensive renovations. | 66 |
(D) "Capital lease" and "operating lease" shall be construed | 67 |
in accordance with generally accepted accounting principles. | 68 |
(E) "Case-mix score" means the measure determined under | 69 |
section 5111.232 of the Revised Code of the relative direct-care | 70 |
resources needed to provide care and habilitation to a resident of | 71 |
a nursing facility or intermediate care facility for the mentally | 72 |
retarded. | 73 |
(F)(1) "Date of licensure," for a facility originally | 74 |
licensed as a nursing home under Chapter 3721. of the Revised | 75 |
Code, means the date specific beds were originally licensed as | 76 |
nursing home beds under that chapter, regardless of whether they | 77 |
were subsequently licensed as residential facility beds under | 78 |
section 5123.19 of the Revised Code. For a facility originally | 79 |
licensed as a residential facility under section 5123.19 of the | 80 |
Revised Code, "date of licensure" means the date specific beds | 81 |
were originally licensed as residential facility beds under that | 82 |
section. | 83 |
If nursing home beds licensed under Chapter 3721. of the | 84 |
Revised Code or residential facility beds licensed under section | 85 |
5123.19 of the Revised Code were not required by law to be | 86 |
licensed when they were originally used to provide nursing home or | 87 |
residential facility services, "date of licensure" means the date | 88 |
the beds first were used to provide nursing home or residential | 89 |
facility services, regardless of the date the present provider | 90 |
obtained licensure. | 91 |
If a facility adds nursing home beds or residential facility | 92 |
beds or extensively renovates all or part of the facility after | 93 |
its original date of licensure, it will have a different date of | 94 |
licensure for the additional beds or extensively renovated portion | 95 |
of the facility, unless the beds are added in a space that was | 96 |
constructed at the same time as the previously licensed beds but | 97 |
was not licensed under Chapter 3721. or section 5123.19 of the | 98 |
Revised Code at that time. | 99 |
(2) The definition of "date of licensure" in this section | 100 |
applies in determinations of the medicaid reimbursement rate for a | 101 |
nursing facility or intermediate care facility for the mentally | 102 |
retarded but does not apply in determinations of the franchise | 103 |
permit fee for a nursing facility or intermediate care facility | 104 |
for the mentally retarded. | 105 |
(G) "Desk-reviewed" means that costs as reported on a cost | 106 |
report submitted under section 5111.26 of the Revised Code have | 107 |
been subjected to a desk review under division (A) of section | 108 |
5111.27 of the Revised Code and preliminarily determined to be | 109 |
allowable costs. | 110 |
(H) "Direct care costs" means all of the following: | 111 |
(1)(a) Costs for registered nurses, licensed practical | 112 |
nurses, and nurse aides employed by the facility; | 113 |
(b) Costs for direct care staff, administrative nursing | 114 |
staff, medical directors, respiratory therapists, and except as | 115 |
provided in division (H)(2) of this section, other persons holding | 116 |
degrees qualifying them to provide therapy; | 117 |
(c) Costs of purchased nursing services; | 118 |
(d) Costs of quality assurance; | 119 |
(e) Costs of training and staff development, employee | 120 |
benefits, payroll taxes, and workers' compensation premiums or | 121 |
costs for self-insurance claims and related costs as specified in | 122 |
rules adopted by the director of job and family services in | 123 |
accordance with Chapter 119. of the Revised Code, for personnel | 124 |
listed in divisions (H)(1)(a), (b), and (d) of this section; | 125 |
(f) Costs of consulting and management fees related to direct | 126 |
care; | 127 |
(g) Allocated direct care home office costs. | 128 |
(2) In addition to the costs specified in division (H)(1) of | 129 |
this section, for nursing facilities only, direct care costs | 130 |
include costs of habilitation staff (other than habilitation | 131 |
supervisors), medical supplies, emergency oxygen, | 132 |
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134 | |
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habilitation supplies, and universal precautions supplies. | 136 |
(3) In addition to the costs specified in division (H)(1) of | 137 |
this section, for intermediate care facilities for the mentally | 138 |
retarded only, direct care costs include both of the following: | 139 |
(a) Costs for physical therapists and physical therapy | 140 |
assistants, occupational therapists and occupational therapy | 141 |
assistants, speech therapists, audiologists, habilitation staff | 142 |
(including habilitation supervisors), qualified mental retardation | 143 |
professionals, program directors, social services staff, | 144 |
activities staff, off-site day programming, psychologists and | 145 |
psychology assistants, and social workers and counselors; | 146 |
(b) Costs of training and staff development, employee | 147 |
benefits, payroll taxes, and workers' compensation premiums or | 148 |
costs for self-insurance claims and related costs as specified in | 149 |
rules adopted under section 5111.02 of the Revised Code, for | 150 |
personnel listed in division (H)(3)(a) of this section. | 151 |
(4) Costs of other direct-care resources that are specified | 152 |
as direct care costs in rules adopted under section 5111.02 of the | 153 |
Revised Code. | 154 |
(I) "Fiscal year" means the fiscal year of this state, as | 155 |
specified in section 9.34 of the Revised Code. | 156 |
(J) "Franchise permit fee" means the following: | 157 |
(1) In the context of nursing facilities, the fee imposed by | 158 |
sections 3721.50 to 3721.58 of the Revised Code; | 159 |
(2) In the context of intermediate care facilities for the | 160 |
mentally retarded, the fee imposed by sections 5112.30 to 5112.39 | 161 |
of the Revised Code. | 162 |
(K) "Indirect care costs" means all reasonable costs incurred | 163 |
by an intermediate care facility for the mentally retarded other | 164 |
than direct care costs, other protected costs, or capital costs. | 165 |
"Indirect care costs" includes but is not limited to costs of | 166 |
habilitation supplies, pharmacy consultants, medical and | 167 |
habilitation records, program supplies, incontinence supplies, | 168 |
food, enterals, dietary supplies and personnel, laundry, | 169 |
housekeeping, security, administration, liability insurance, | 170 |
bookkeeping, purchasing department, human resources, | 171 |
communications, travel, dues, license fees, subscriptions, home | 172 |
office costs not otherwise allocated, legal services, accounting | 173 |
services, minor equipment, maintenance and repairs, help-wanted | 174 |
advertising, informational advertising, start-up costs, | 175 |
organizational expenses, other interest, property insurance, | 176 |
employee training and staff development, employee benefits, | 177 |
payroll taxes, and workers' compensation premiums or costs for | 178 |
self-insurance claims and related costs as specified in rules | 179 |
adopted under section 5111.02 of the Revised Code, for personnel | 180 |
listed in this division. Notwithstanding division (C)(1) of this | 181 |
section, "indirect care costs" also means the cost of equipment, | 182 |
including vehicles, acquired by operating lease executed before | 183 |
December 1, 1992, if the costs are reported as administrative and | 184 |
general costs on the facility's cost report for the cost reporting | 185 |
period ending December 31, 1992. | 186 |
(L) "Inpatient days" means all days during which a resident, | 187 |
regardless of payment source, occupies a bed in a nursing facility | 188 |
or intermediate care facility for the mentally retarded that is | 189 |
included in the facility's certified capacity under Title XIX. | 190 |
Therapeutic or hospital leave days for which payment is made under | 191 |
section 5111.33 of the Revised Code are considered inpatient days | 192 |
proportionate to the percentage of the facility's per resident per | 193 |
day rate paid for those days. | 194 |
(M) "Intermediate care facility for the mentally retarded" | 195 |
means an intermediate care facility for the mentally retarded | 196 |
certified as in compliance with applicable standards for the | 197 |
medicaid program by the director of health in accordance with | 198 |
Title XIX. | 199 |
(N) "Maintenance and repair expenses" means, except as | 200 |
provided in division (BB)(2) of this section, expenditures that | 201 |
are necessary and proper to maintain an asset in a normally | 202 |
efficient working condition and that do not extend the useful life | 203 |
of the asset two years or more. "Maintenance and repair expenses" | 204 |
includes but is not limited to the cost of ordinary repairs such | 205 |
as painting and wallpapering. | 206 |
(O) "Medicaid days" means all days during which a resident | 207 |
who is a | 208 |
services occupies a bed in a nursing facility that is included in | 209 |
the nursing facility's certified capacity under Title XIX. | 210 |
Therapeutic or hospital leave days for which payment is made under | 211 |
section 5111.33 of the Revised Code are considered | 212 |
medicaid days proportionate to the percentage of the nursing | 213 |
facility's per resident per day rate paid for those days. | 214 |
(P) "Nursing facility" means a facility, or a distinct part | 215 |
of a facility, that is certified as a nursing facility by the | 216 |
director of health in accordance with Title XIX and is not an | 217 |
intermediate care facility for the mentally retarded. "Nursing | 218 |
facility" includes a facility, or a distinct part of a facility, | 219 |
that is certified as a nursing facility by the director of health | 220 |
in accordance with Title XIX and is certified as a skilled nursing | 221 |
facility by the director in accordance with Title XVIII. | 222 |
(Q) "Operator" means the person or government entity | 223 |
responsible for the daily operating and management decisions for a | 224 |
nursing facility or intermediate care facility for the mentally | 225 |
retarded. | 226 |
(R) "Other protected costs" means costs incurred by an | 227 |
intermediate care facility for the mentally retarded for medical | 228 |
supplies; real estate, franchise, and property taxes; natural gas, | 229 |
fuel oil, water, electricity, sewage, and refuse and hazardous | 230 |
medical waste collection; allocated other protected home office | 231 |
costs; and any additional costs defined as other protected costs | 232 |
in rules adopted under section 5111.02 of the Revised Code. | 233 |
(S)(1) "Owner" means any person or government entity that has | 234 |
at least five per cent ownership or interest, either directly, | 235 |
indirectly, or in any combination, in any of the following | 236 |
regarding a nursing facility or intermediate care facility for the | 237 |
mentally retarded: | 238 |
(a) The land on which the facility is located; | 239 |
(b) The structure in which the facility is located; | 240 |
(c) Any mortgage, contract for deed, or other obligation | 241 |
secured in whole or in part by the land or structure on or in | 242 |
which the facility is located; | 243 |
(d) Any lease or sublease of the land or structure on or in | 244 |
which the facility is located. | 245 |
(2) "Owner" does not mean a holder of a debenture or bond | 246 |
related to the nursing facility or intermediate care facility for | 247 |
the mentally retarded and purchased at public issue or a regulated | 248 |
lender that has made a loan related to the facility unless the | 249 |
holder or lender operates the facility directly or through a | 250 |
subsidiary. | 251 |
(T) "Patient" includes "resident." | 252 |
(U) Except as provided in divisions (U)(1) and (2) of this | 253 |
section, "per diem" means a nursing facility's or intermediate | 254 |
care facility for the mentally retarded's actual, allowable costs | 255 |
in a given cost center in a cost reporting period, divided by the | 256 |
facility's inpatient days for that cost reporting period. | 257 |
(1) When calculating indirect care costs for the purpose of | 258 |
establishing rates under section 5111.241 of the Revised Code, | 259 |
"per diem" means an intermediate care facility for the mentally | 260 |
retarded's actual, allowable indirect care costs in a cost | 261 |
reporting period divided by the greater of the facility's | 262 |
inpatient days for that period or the number of inpatient days the | 263 |
facility would have had during that period if its occupancy rate | 264 |
had been eighty-five per cent. | 265 |
(2) When calculating capital costs for the purpose of | 266 |
establishing rates under section 5111.251 of the Revised Code, | 267 |
"per diem" means a facility's actual, allowable capital costs in a | 268 |
cost reporting period divided by the greater of the facility's | 269 |
inpatient days for that period or the number of inpatient days the | 270 |
facility would have had during that period if its occupancy rate | 271 |
had been ninety-five per cent. | 272 |
(V) "Provider" means an operator with a provider agreement. | 273 |
(W) "Provider agreement" means a contract between the | 274 |
department of job and family services and the operator of a | 275 |
nursing facility or intermediate care facility for the mentally | 276 |
retarded for the provision of nursing facility services or | 277 |
intermediate care facility services for the mentally retarded | 278 |
under the medicaid program. | 279 |
(X) "Purchased nursing services" means services that are | 280 |
provided in a nursing facility by registered nurses, licensed | 281 |
practical nurses, or nurse aides who are not employees of the | 282 |
facility. | 283 |
(Y) "Reasonable" means that a cost is an actual cost that is | 284 |
appropriate and helpful to develop and maintain the operation of | 285 |
patient care facilities and activities, including normal standby | 286 |
costs, and that does not exceed what a prudent buyer pays for a | 287 |
given item or services. Reasonable costs may vary from provider to | 288 |
provider and from time to time for the same provider. | 289 |
(Z) "Related party" means an individual or organization that, | 290 |
to a significant extent, has common ownership with, is associated | 291 |
or affiliated with, has control of, or is controlled by, the | 292 |
provider. | 293 |
(1) An individual who is a relative of an owner is a related | 294 |
party. | 295 |
(2) Common ownership exists when an individual or individuals | 296 |
possess significant ownership or equity in both the provider and | 297 |
the other organization. Significant ownership or equity exists | 298 |
when an individual or individuals possess five per cent ownership | 299 |
or equity in both the provider and a supplier. Significant | 300 |
ownership or equity is presumed to exist when an individual or | 301 |
individuals possess ten per cent ownership or equity in both the | 302 |
provider and another organization from which the provider | 303 |
purchases or leases real property. | 304 |
(3) Control exists when an individual or organization has the | 305 |
power, directly or indirectly, to significantly influence or | 306 |
direct the actions or policies of an organization. | 307 |
(4) An individual or organization that supplies goods or | 308 |
services to a provider shall not be considered a related party if | 309 |
all of the following conditions are met: | 310 |
(a) The supplier is a separate bona fide organization. | 311 |
(b) A substantial part of the supplier's business activity of | 312 |
the type carried on with the provider is transacted with others | 313 |
than the provider and there is an open, competitive market for the | 314 |
types of goods or services the supplier furnishes. | 315 |
(c) The types of goods or services are commonly obtained by | 316 |
other nursing facilities or intermediate care facilities for the | 317 |
mentally retarded from outside organizations and are not a basic | 318 |
element of patient care ordinarily furnished directly to patients | 319 |
by the facilities. | 320 |
(d) The charge to the provider is in line with the charge for | 321 |
the goods or services in the open market and no more than the | 322 |
charge made under comparable circumstances to others by the | 323 |
supplier. | 324 |
(AA) "Relative of owner" means an individual who is related | 325 |
to an owner of a nursing facility or intermediate care facility | 326 |
for the mentally retarded by one of the following relationships: | 327 |
(1) Spouse; | 328 |
(2) Natural parent, child, or sibling; | 329 |
(3) Adopted parent, child, or sibling; | 330 |
(4) Stepparent, stepchild, stepbrother, or stepsister; | 331 |
(5) Father-in-law, mother-in-law, son-in-law, | 332 |
daughter-in-law, brother-in-law, or sister-in-law; | 333 |
(6) Grandparent or grandchild; | 334 |
(7) Foster caregiver, foster child, foster brother, or foster | 335 |
sister. | 336 |
(BB) "Renovation" and "extensive renovation" mean: | 337 |
(1) Any betterment, improvement, or restoration of an | 338 |
intermediate care facility for the mentally retarded started | 339 |
before July 1, 1993, that meets the definition of a renovation or | 340 |
extensive renovation established in rules adopted by the director | 341 |
of job and family services in effect on December 22, 1992. | 342 |
(2) In the case of betterments, improvements, and | 343 |
restorations of intermediate care facilities for the mentally | 344 |
retarded started on or after July 1, 1993: | 345 |
(a) "Renovation" means the betterment, improvement, or | 346 |
restoration of an intermediate care facility for the mentally | 347 |
retarded beyond its current functional capacity through a | 348 |
structural change that costs at least five hundred dollars per | 349 |
bed. A renovation may include betterment, improvement, | 350 |
restoration, or replacement of assets that are affixed to the | 351 |
building and have a useful life of at least five years. A | 352 |
renovation may include costs that otherwise would be considered | 353 |
maintenance and repair expenses if they are an integral part of | 354 |
the structural change that makes up the renovation project. | 355 |
"Renovation" does not mean construction of additional space for | 356 |
beds that will be added to a facility's licensed or certified | 357 |
capacity. | 358 |
(b) "Extensive renovation" means a renovation that costs more | 359 |
than sixty-five per cent and no more than eighty-five per cent of | 360 |
the cost of constructing a new bed and that extends the useful | 361 |
life of the assets for at least ten years. | 362 |
For the purposes of division (BB)(2) of this section, the | 363 |
cost of constructing a new bed shall be considered to be forty | 364 |
thousand dollars, adjusted for the estimated rate of inflation | 365 |
from January 1, 1993, to the end of the calendar year during which | 366 |
the renovation is completed, using the consumer price index for | 367 |
shelter costs for all urban consumers for the north central | 368 |
region, as published by the United States bureau of labor | 369 |
statistics. | 370 |
The department of job and family services may treat a | 371 |
renovation that costs more than eighty-five per cent of the cost | 372 |
of constructing new beds as an extensive renovation if the | 373 |
department determines that the renovation is more prudent than | 374 |
construction of new beds. | 375 |
(CC) "Title XIX" means Title XIX of the "Social Security | 376 |
Act," 79 Stat. 286 (1965), 42 U.S.C. 1396, as amended. | 377 |
(DD) "Title XVIII" means Title XVIII of the "Social Security | 378 |
Act," 79 Stat. 286 (1965), 42 U.S.C. 1395, as amended. | 379 |
Sec. 5111.205. (A) Except as provided in division (B) of | 380 |
this section, when the provider of a nursing facility is | 381 |
responsible for paying a person for dispensing a prescription drug | 382 |
to a resident of the nursing facility who is a medicaid recipient, | 383 |
the provider shall do both of the following: | 384 |
(1) Pay the person the medicaid fee-for-service payment rate | 385 |
plus the medicaid fee-for-service dispensing fee for the | 386 |
prescription drug; | 387 |
(2) Pay the person the full amount required by division | 388 |
(A)(1) of this section not later than thirty days after the person | 389 |
dispenses the prescription drug. | 390 |
(B) Division (A) of this section does not apply when the | 391 |
person who dispenses the prescription drug is an employee of the | 392 |
provider who, as part of the employee's employment duties, | 393 |
dispenses the prescription drug. | 394 |
Section 2. That existing section 5111.20 of the Revised Code | 395 |
is hereby repealed. | 396 |