Montana Administrative Register Notice 37-671 No. 8   04/24/2014    
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In the matter of the amendment of ARM 37.40.307, 37.40.326, and 37.40.361 pertaining to nursing facility reimbursement








TO: All Concerned Persons


            1. On May 16, 2014, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rules.


2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on May 9, 2014, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.


3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:


            37.40.307 NURSING FACILITY REIMBURSEMENT (1) remains the same.         

            (2) Effective July 1, 2001, and in subsequent rate years, nursing facilities will be reimbursed using a price-based reimbursement methodology. The rate for each facility will be determined using the operating component defined in (2)(a) and the direct resident care component defined in (2)(b):

            (a) through (c) remain the same.

            (d) The total payment rate available for the period July 1, 2013 July 1, 2014 through June 30, 2014 June 30, 2015 will be the rate as computed in (2), plus any additional amount computed in ARM 37.40.311 and 37.40.361.

            (3) Providers who, as of July 1 of the rate year, have not filed with the department a cost report covering a period of at least six months participation in the Medicaid program in a newly constructed facility shall will have a rate set at the statewide median price as computed on July 1, 2013 July 1, 2014. Following a change in provider as defined in ARM 37.40.325, the per diem rate for the new provider shall will be set at the previous provider's rate, as if no change in provider had occurred.

            (4) through (12) remain the same.


AUTH: 53-2-201, 53-6-113, MCA

IMP:     53-6-101, 53-6-111, 53-6-113, MCA


            37.40.326 INTERIM PER DIEM RATES FOR NEWLY CONSTRUCTED FACILITIES AND NEW PROVIDERS (1) This rule specifies the methodology the department will use to determine the interim per diem rate for in-state providers, other than ICF/MR providers, which as of July 1 of the rate year have not filed with the department a cost report covering a period of at least six months participation in the Medicaid program in a newly constructed facility or following a change in provider as defined in ARM 37.40.325.

            (a) remains the same.

            (b) Effective July 1, 2001, and thereafter, the rate paid to newly constructed facilities or to facilities participating in the Medicaid program for the first time will be the statewide average nursing facility rate under the price-based reimbursement system. The direct care component of the rate will not be adjusted for acuity, until such time as there are three or more quarters of Medicaid CMI information available at the start of a state fiscal year. Once the CMI information is available the price-based rate will include the acuity adjustment as provided for in ARM 37.40.307(5)(b) 37.40.307(2)(b).


AUTH: 53-6-113, MCA

IMP:     53-6-101, 53-6-113, MCA


            37.40.361 DIRECT CARE AND ANCILLARY SERVICES WORKERS' WAGE REPORTING/ADDITIONAL PAYMENTS INCLUDING LUMP SUM PAYMENTS FOR DIRECT CARE AND ANCILLARY SERVICES WORKERS' WAGE AND BENEFIT INCREASES (1) Effective for the period July 1, 2013 July 1, 2014 and for the six months thereafter, nursing facilities must report to the department actual hourly wage and benefit rates paid for all direct care and ancillary services workers or the lump sum payment amounts for all direct care and ancillary services workers that will receive the benefit of the increased funds. The reported data shall be used by the department for the purpose of comparing types and rates of payment for comparable services and tracking distribution of direct care wage funds to designated workers.

            (2) The department will pay Medicaid certified nursing care facilities located in Montana that submit an approved request to the department a lump sum payment in addition to the amount paid as provided in ARM 37.40.307 and 37.40.311 to their computed Medicaid payment rate to be used only for wage and benefit increases or lump sum payments for direct care or ancillary services workers in nursing facilities.

            (a) The department will determine the lump sum payments, twice a year commencing July 1, 2013 July 1, 2014, and again in six months from that date as a pro rata share of appropriated funds allocated for increases in direct care and ancillary services workers' wages and benefits or lump sum payments to direct care and ancillary services workers.

            (b) through (3) remain the same.


AUTH: 53-2-201, 53-6-113, MCA

IMP:     53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA




The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.40.307 and 37.40.361 for the purpose of implementing an approximate 2% increase in Medicaid provider rates using state and federal funds. This increase is funded by House Bill 2 (HB2) of the 63rd Montana Legislature. The increase is necessary to maintain Medicaid provider rates at a level consistent with efficiency, economy, quality of care, and to ensure the continued participation of providers. The department is also proposing to amend ARM 37.40.326 to correct an ARM reference.


These rules continue the methodology for implementing legislative funding for nursing facility reimbursement, including updated estimated patient days, patient contribution amounts and case mix indices (acuity) into the rate calculation for state fiscal year 2015. Funding will continue to be available to provide for a direct care worker wage increase for nursing facility providers for workers who provide direct care and ancillary services in fiscal year 2015.


The Legislature continued approval for the use of local county matching funds as a source of additional revenue for nursing facility providers.  The intergovernmental fund transfer (IGT) program maintains access to, and the quality of, nursing facility services, and will be available for state fiscal year (SFY) 2015.


The department will provide rate sheets to all providers in advance of the rule hearing for verification purposes and in order to facilitate comments.  These sheets will distribute the funding available in order to meet the department goals for a price-based system of reimbursement and will incorporate legislative appropriated funding levels.


Fiscal Impact


The total state and federal funding available for state fiscal year (SFY) 2015 for rate calculation purposes utilizing the funding in HB2 is currently projected at $145,522,658 which is comprised of $16,694,858 in state special revenue, $32,462,695 in state general funds, and $96,365,105 in federal funds when the provider rate increases are included.


The additional funding of lump-sum payments to providers for direct care workers and ancillary staff of $1,344,818 of state general funds and $2,636,288 in federal funds for a total appropriation of $3,981,106 for the nursing facility direct care worker wage program.


The estimated total funding available for SFY 2015 for nursing facility reimbursement is estimated at approximately $179,058,229 of combined state and federal funds, including $33,535,571 in patient contributions. These numbers do not include at-risk provider funds or direct care wage funding.


Anticipated days for SFY 2015 are estimated at 1,060,581 using estimates of caseload adopted by the legislature.


The estimated total funding impact of the onetime payments to "at risk" nonstate governmental providers and other nursing facilities not determined to be "at risk," has been appropriated at $23,945,170 in total funds of which $8,088,679 comes from state special revenue funds and approximately $15,856,491 comes from federal funding sources.


Eighty-one nursing facility providers participated in the Medicaid nursing facility payment program and approximately 4,837 recipients received services in nursing facilities under Medicaid.


The analysis of Medicaid nursing facility rates that is annually conducted by Myers and Stauffer, LC shows that in SFY 2013 (report dated 01/30/2014) that Montana Medicaid on average is reimbursing 97.43% of the cost of providing nursing facility services. The department considered the impact of the rate changes on efficiency, economy, quality of care, and access to Medicaid services and concluded that the rates are still sufficient to meet the requirements of 42 USC 1396a (a) (30)(A).


            5. The department intends to adopt these rule amendments effective July 1, 2014.


            6. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., May 22, 2014.


7. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.


8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.


9. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.


10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.


11. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.



/s/ Valerie A. Bashor                                    /s/ Richard H. Opper                                   

Valerie A. Bashor                                        Richard H. Opper, Director

Rule Reviewer                                             Public Health and Human Services


Certified to the Secretary of State April 14, 2014.



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