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H. B. No. 156 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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Representatives Yuko, McGregor
Cosponsors:
Representatives Garland, Murray, Gardner, Foley, Blair, Sears, Boyd, Schuring, Snitchler, Antonio, Okey, Lundy, DeGeeter, Ashford, Pillich, Balderson, Adams, J., Letson, Hottinger, Hackett, Gentile, Barnes, Weddington, Slaby, Mallory
A BILL
To amend section 5111.20 and to enact section
5111.205 of the Revised Code to revise the types
of costs included in determining nursing
facilities' Medicaid reimbursement rates.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5111.20 be amended and section
5111.205 of the Revised Code be enacted to read as follows:
Sec. 5111.20. As used in sections 5111.20 to 5111.34 of the
Revised Code:
(A) "Allowable costs" are those costs determined by the
department of job and family services to be reasonable and do not
include fines paid under sections 5111.35 to 5111.61 and section
5111.99 of the Revised Code.
(B) "Ancillary and support costs" means all reasonable costs
incurred by a nursing facility other than direct care costs or
capital costs. "Ancillary and support costs" includes, but is not
limited to, costs of activities, social services, pharmacy
consultants, habilitation supervisors, qualified mental
retardation professionals, program directors, medical and
habilitation records, program supplies, incontinence supplies,
food, enterals, dietary supplies and personnel, laundry,
housekeeping, security, administration, medical equipment,
utilities, liability insurance, bookkeeping, purchasing
department, human resources, communications, travel, dues, license
fees, subscriptions, home office costs not otherwise allocated,
legal services, accounting services, minor equipment, wheelchairs,
resident transportation, maintenance and repairs, help-wanted
advertising, informational advertising, start-up costs,
organizational expenses, other interest, property insurance,
employee training and staff development, employee benefits,
payroll taxes, and workers' compensation premiums or costs for
self-insurance claims and related costs as specified in rules
adopted by the director of job and family services under section
5111.02 of the Revised Code, for personnel listed in this
division. "Ancillary and support costs" also means the cost of
equipment, including vehicles, acquired by operating lease
executed before December 1, 1992, if the costs are reported as
administrative and general costs on the facility's cost report for
the cost reporting period ending December 31, 1992.
(C) "Capital costs" means costs of ownership and, in the case
of an intermediate care facility for the mentally retarded, costs
of nonextensive renovation.
(1) "Cost of ownership" means the actual expense incurred for
all of the following:
(a) Depreciation and interest on any capital assets that cost
five hundred dollars or more per item, including the following:
(ii) Building improvements that are not approved as
nonextensive renovations under section 5111.251 of the Revised
Code;
(iii) Except as provided in division (B) of this section,
equipment;
(iv) In the case of an intermediate care facility for the
mentally retarded, extensive renovations;
(v) Transportation equipment.
(b) Amortization and interest on land improvements and
leasehold improvements;
(c) Amortization of financing costs;
(d) Except as provided in division (K) of this section, lease
and rent of land, building, and equipment.
The costs of capital assets of less than five hundred dollars
per item may be considered capital costs in accordance with a
provider's practice.
(2) "Costs of nonextensive renovation" means the actual
expense incurred by an intermediate care facility for the mentally
retarded for depreciation or amortization and interest on
renovations that are not extensive renovations.
(D) "Capital lease" and "operating lease" shall be construed
in accordance with generally accepted accounting principles.
(E) "Case-mix score" means the measure determined under
section 5111.232 of the Revised Code of the relative direct-care
resources needed to provide care and habilitation to a resident of
a nursing facility or intermediate care facility for the mentally
retarded.
(F)(1) "Date of licensure," for a facility originally
licensed as a nursing home under Chapter 3721. of the Revised
Code, means the date specific beds were originally licensed as
nursing home beds under that chapter, regardless of whether they
were subsequently licensed as residential facility beds under
section 5123.19 of the Revised Code. For a facility originally
licensed as a residential facility under section 5123.19 of the
Revised Code, "date of licensure" means the date specific beds
were originally licensed as residential facility beds under that
section.
If nursing home beds licensed under Chapter 3721. of the
Revised Code or residential facility beds licensed under section
5123.19 of the Revised Code were not required by law to be
licensed when they were originally used to provide nursing home or
residential facility services, "date of licensure" means the date
the beds first were used to provide nursing home or residential
facility services, regardless of the date the present provider
obtained licensure.
If a facility adds nursing home beds or residential facility
beds or extensively renovates all or part of the facility after
its original date of licensure, it will have a different date of
licensure for the additional beds or extensively renovated portion
of the facility, unless the beds are added in a space that was
constructed at the same time as the previously licensed beds but
was not licensed under Chapter 3721. or section 5123.19 of the
Revised Code at that time.
(2) The definition of "date of licensure" in this section
applies in determinations of the medicaid reimbursement rate for a
nursing facility or intermediate care facility for the mentally
retarded but does not apply in determinations of the franchise
permit fee for a nursing facility or intermediate care facility
for the mentally retarded.
(G) "Desk-reviewed" means that costs as reported on a cost
report submitted under section 5111.26 of the Revised Code have
been subjected to a desk review under division (A) of section
5111.27 of the Revised Code and preliminarily determined to be
allowable costs.
(H) "Direct care costs" means all of the following:
(1)(a) Costs for registered nurses, licensed practical
nurses, and nurse aides employed by the facility;
(b) Costs for direct care staff, administrative nursing
staff, medical directors, respiratory therapists, and except as
provided in division (H)(2) of this section, other persons holding
degrees qualifying them to provide therapy;
(c) Costs of purchased nursing services;
(d) Costs of quality assurance;
(e) Costs of training and staff development, employee
benefits, payroll taxes, and workers' compensation premiums or
costs for self-insurance claims and related costs as specified in
rules adopted by the director of job and family services in
accordance with Chapter 119. of the Revised Code, for personnel
listed in divisions (H)(1)(a), (b), and (d) of this section;
(f) Costs of consulting and management fees related to direct
care;
(g) Allocated direct care home office costs.
(2) In addition to the costs specified in division (H)(1) of
this section, for nursing facilities only, direct care costs
include costs of habilitation staff (other than habilitation
supervisors), medical supplies, emergency oxygen, over-the-counter
pharmacy products, physical therapists, physical therapy
assistants, occupational therapists, occupational therapy
assistants, speech therapists, audiologists, prescription drugs,
habilitation supplies, and universal precautions supplies.
(3) In addition to the costs specified in division (H)(1) of
this section, for intermediate care facilities for the mentally
retarded only, direct care costs include both of the following:
(a) Costs for physical therapists and physical therapy
assistants, occupational therapists and occupational therapy
assistants, speech therapists, audiologists, habilitation staff
(including habilitation supervisors), qualified mental retardation
professionals, program directors, social services staff,
activities staff, off-site day programming, psychologists and
psychology assistants, and social workers and counselors;
(b) Costs of training and staff development, employee
benefits, payroll taxes, and workers' compensation premiums or
costs for self-insurance claims and related costs as specified in
rules adopted under section 5111.02 of the Revised Code, for
personnel listed in division (H)(3)(a) of this section.
(4) Costs of other direct-care resources that are specified
as direct care costs in rules adopted under section 5111.02 of the
Revised Code.
(I) "Fiscal year" means the fiscal year of this state, as
specified in section 9.34 of the Revised Code.
(J) "Franchise permit fee" means the following:
(1) In the context of nursing facilities, the fee imposed by
sections 3721.50 to 3721.58 of the Revised Code;
(2) In the context of intermediate care facilities for the
mentally retarded, the fee imposed by sections 5112.30 to 5112.39
of the Revised Code.
(K) "Indirect care costs" means all reasonable costs incurred
by an intermediate care facility for the mentally retarded other
than direct care costs, other protected costs, or capital costs.
"Indirect care costs" includes but is not limited to costs of
habilitation supplies, pharmacy consultants, medical and
habilitation records, program supplies, incontinence supplies,
food, enterals, dietary supplies and personnel, laundry,
housekeeping, security, administration, liability insurance,
bookkeeping, purchasing department, human resources,
communications, travel, dues, license fees, subscriptions, home
office costs not otherwise allocated, legal services, accounting
services, minor equipment, maintenance and repairs, help-wanted
advertising, informational advertising, start-up costs,
organizational expenses, other interest, property insurance,
employee training and staff development, employee benefits,
payroll taxes, and workers' compensation premiums or costs for
self-insurance claims and related costs as specified in rules
adopted under section 5111.02 of the Revised Code, for personnel
listed in this division. Notwithstanding division (C)(1) of this
section, "indirect care costs" also means the cost of equipment,
including vehicles, acquired by operating lease executed before
December 1, 1992, if the costs are reported as administrative and
general costs on the facility's cost report for the cost reporting
period ending December 31, 1992.
(L) "Inpatient days" means all days during which a resident,
regardless of payment source, occupies a bed in a nursing facility
or intermediate care facility for the mentally retarded that is
included in the facility's certified capacity under Title XIX.
Therapeutic or hospital leave days for which payment is made under
section 5111.33 of the Revised Code are considered inpatient days
proportionate to the percentage of the facility's per resident per
day rate paid for those days.
(M) "Intermediate care facility for the mentally retarded"
means an intermediate care facility for the mentally retarded
certified as in compliance with applicable standards for the
medicaid program by the director of health in accordance with
Title XIX.
(N) "Maintenance and repair expenses" means, except as
provided in division (BB)(2) of this section, expenditures that
are necessary and proper to maintain an asset in a normally
efficient working condition and that do not extend the useful life
of the asset two years or more. "Maintenance and repair expenses"
includes but is not limited to the cost of ordinary repairs such
as painting and wallpapering.
(O) "Medicaid days" means all days during which a resident
who is a Medicaid medicaid recipient eligible for nursing facility
services occupies a bed in a nursing facility that is included in
the nursing facility's certified capacity under Title XIX.
Therapeutic or hospital leave days for which payment is made under
section 5111.33 of the Revised Code are considered Medicaid
medicaid days proportionate to the percentage of the nursing
facility's per resident per day rate paid for those days.
(P) "Nursing facility" means a facility, or a distinct part
of a facility, that is certified as a nursing facility by the
director of health in accordance with Title XIX and is not an
intermediate care facility for the mentally retarded. "Nursing
facility" includes a facility, or a distinct part of a facility,
that is certified as a nursing facility by the director of health
in accordance with Title XIX and is certified as a skilled nursing
facility by the director in accordance with Title XVIII.
(Q) "Operator" means the person or government entity
responsible for the daily operating and management decisions for a
nursing facility or intermediate care facility for the mentally
retarded.
(R) "Other protected costs" means costs incurred by an
intermediate care facility for the mentally retarded for medical
supplies; real estate, franchise, and property taxes; natural gas,
fuel oil, water, electricity, sewage, and refuse and hazardous
medical waste collection; allocated other protected home office
costs; and any additional costs defined as other protected costs
in rules adopted under section 5111.02 of the Revised Code.
(S)(1) "Owner" means any person or government entity that has
at least five per cent ownership or interest, either directly,
indirectly, or in any combination, in any of the following
regarding a nursing facility or intermediate care facility for the
mentally retarded:
(a) The land on which the facility is located;
(b) The structure in which the facility is located;
(c) Any mortgage, contract for deed, or other obligation
secured in whole or in part by the land or structure on or in
which the facility is located;
(d) Any lease or sublease of the land or structure on or in
which the facility is located.
(2) "Owner" does not mean a holder of a debenture or bond
related to the nursing facility or intermediate care facility for
the mentally retarded and purchased at public issue or a regulated
lender that has made a loan related to the facility unless the
holder or lender operates the facility directly or through a
subsidiary.
(T) "Patient" includes "resident."
(U) Except as provided in divisions (U)(1) and (2) of this
section, "per diem" means a nursing facility's or intermediate
care facility for the mentally retarded's actual, allowable costs
in a given cost center in a cost reporting period, divided by the
facility's inpatient days for that cost reporting period.
(1) When calculating indirect care costs for the purpose of
establishing rates under section 5111.241 of the Revised Code,
"per diem" means an intermediate care facility for the mentally
retarded's actual, allowable indirect care costs in a cost
reporting period divided by the greater of the facility's
inpatient days for that period or the number of inpatient days the
facility would have had during that period if its occupancy rate
had been eighty-five per cent.
(2) When calculating capital costs for the purpose of
establishing rates under section 5111.251 of the Revised Code,
"per diem" means a facility's actual, allowable capital costs in a
cost reporting period divided by the greater of the facility's
inpatient days for that period or the number of inpatient days the
facility would have had during that period if its occupancy rate
had been ninety-five per cent.
(V) "Provider" means an operator with a provider agreement.
(W) "Provider agreement" means a contract between the
department of job and family services and the operator of a
nursing facility or intermediate care facility for the mentally
retarded for the provision of nursing facility services or
intermediate care facility services for the mentally retarded
under the medicaid program.
(X) "Purchased nursing services" means services that are
provided in a nursing facility by registered nurses, licensed
practical nurses, or nurse aides who are not employees of the
facility.
(Y) "Reasonable" means that a cost is an actual cost that is
appropriate and helpful to develop and maintain the operation of
patient care facilities and activities, including normal standby
costs, and that does not exceed what a prudent buyer pays for a
given item or services. Reasonable costs may vary from provider to
provider and from time to time for the same provider.
(Z) "Related party" means an individual or organization that,
to a significant extent, has common ownership with, is associated
or affiliated with, has control of, or is controlled by, the
provider.
(1) An individual who is a relative of an owner is a related
party.
(2) Common ownership exists when an individual or individuals
possess significant ownership or equity in both the provider and
the other organization. Significant ownership or equity exists
when an individual or individuals possess five per cent ownership
or equity in both the provider and a supplier. Significant
ownership or equity is presumed to exist when an individual or
individuals possess ten per cent ownership or equity in both the
provider and another organization from which the provider
purchases or leases real property.
(3) Control exists when an individual or organization has the
power, directly or indirectly, to significantly influence or
direct the actions or policies of an organization.
(4) An individual or organization that supplies goods or
services to a provider shall not be considered a related party if
all of the following conditions are met:
(a) The supplier is a separate bona fide organization.
(b) A substantial part of the supplier's business activity of
the type carried on with the provider is transacted with others
than the provider and there is an open, competitive market for the
types of goods or services the supplier furnishes.
(c) The types of goods or services are commonly obtained by
other nursing facilities or intermediate care facilities for the
mentally retarded from outside organizations and are not a basic
element of patient care ordinarily furnished directly to patients
by the facilities.
(d) The charge to the provider is in line with the charge for
the goods or services in the open market and no more than the
charge made under comparable circumstances to others by the
supplier.
(AA) "Relative of owner" means an individual who is related
to an owner of a nursing facility or intermediate care facility
for the mentally retarded by one of the following relationships:
(2) Natural parent, child, or sibling;
(3) Adopted parent, child, or sibling;
(4) Stepparent, stepchild, stepbrother, or stepsister;
(5) Father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law;
(6) Grandparent or grandchild;
(7) Foster caregiver, foster child, foster brother, or foster
sister.
(BB) "Renovation" and "extensive renovation" mean:
(1) Any betterment, improvement, or restoration of an
intermediate care facility for the mentally retarded started
before July 1, 1993, that meets the definition of a renovation or
extensive renovation established in rules adopted by the director
of job and family services in effect on December 22, 1992.
(2) In the case of betterments, improvements, and
restorations of intermediate care facilities for the mentally
retarded started on or after July 1, 1993:
(a) "Renovation" means the betterment, improvement, or
restoration of an intermediate care facility for the mentally
retarded beyond its current functional capacity through a
structural change that costs at least five hundred dollars per
bed. A renovation may include betterment, improvement,
restoration, or replacement of assets that are affixed to the
building and have a useful life of at least five years. A
renovation may include costs that otherwise would be considered
maintenance and repair expenses if they are an integral part of
the structural change that makes up the renovation project.
"Renovation" does not mean construction of additional space for
beds that will be added to a facility's licensed or certified
capacity.
(b) "Extensive renovation" means a renovation that costs more
than sixty-five per cent and no more than eighty-five per cent of
the cost of constructing a new bed and that extends the useful
life of the assets for at least ten years.
For the purposes of division (BB)(2) of this section, the
cost of constructing a new bed shall be considered to be forty
thousand dollars, adjusted for the estimated rate of inflation
from January 1, 1993, to the end of the calendar year during which
the renovation is completed, using the consumer price index for
shelter costs for all urban consumers for the north central
region, as published by the United States bureau of labor
statistics.
The department of job and family services may treat a
renovation that costs more than eighty-five per cent of the cost
of constructing new beds as an extensive renovation if the
department determines that the renovation is more prudent than
construction of new beds.
(CC) "Title XIX" means Title XIX of the "Social Security
Act," 79 Stat. 286 (1965), 42 U.S.C. 1396, as amended.
(DD) "Title XVIII" means Title XVIII of the "Social Security
Act," 79 Stat. 286 (1965), 42 U.S.C. 1395, as amended.
Sec. 5111.205. (A) Except as provided in division (B) of
this section, when the provider of a nursing facility is
responsible for paying a person for dispensing a prescription drug
to a resident of the nursing facility who is a medicaid recipient,
the provider shall do both of the following:
(1) Pay the person the medicaid fee-for-service payment rate
plus the medicaid fee-for-service dispensing fee for the
prescription drug;
(2) Pay the person the full amount required by division
(A)(1) of this section not later than thirty days after the person
dispenses the prescription drug.
(B) Division (A) of this section does not apply when the
person who dispenses the prescription drug is an employee of the
provider who, as part of the employee's employment duties,
dispenses the prescription drug.
Section 2. That existing section 5111.20 of the Revised Code
is hereby repealed.
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