Administrative Rules of the State of Montana

BEFORE THE Department of Public

health and human services of the

STATE OF MONTANA

In the matter of the amendment

of ARM 37.40.307 and 37.40.361 pertaining to Medicaid nursing facility reimbursement

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NOTICE OF AMENDMENT

TO: All Concerned Persons

1. On April 29, 2010, the Department of Public Health and Human Services published MAR Notice No. 37-504 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 991 of the 2010 Montana Administrative Register, Issue Number 8.

2. The department has amended the above-stated rules as proposed.

3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

2% Provider Rate Comments

COMMENT #1: Nursing facility representatives object to the department's proposal not to distribute the 2% rate increase appropriated for fiscal year 2011. Many specifically request that the 2% rate increase be distributed. The commenters state that the state general fund (GF) estimated ending fund balance for this biennium now exceeds the trigger included in the statute the Governor relied on to order this spending reduction. It is no longer necessary to implement this reduction.

RESPONSE #1: As of April 19, 2010, the date of this proposed rule amendment filing with the Secretary of State, there is a projected Montana GF budget deficit as that term is defined in 17-7-140(3), MCA for state fiscal year 2011. The Governor is required to implement a GF spending reduction plan, when projected state GF revenue projections, when compared to the appropriations for the biennium passed by the 2009 Legislature, may result in an ending fund balance below statutory limits. In accordance with the 17-7-140(3), MCA the Governor has implemented a 5% GF reduction plan. As part of the department's statutorily required spending reduction plan the appropriation for the 2% provider rates will not be implemented for nursing facility providers in fiscal year (FY) 2011.

Adequacy of Rates Comments

COMMENT #2: Nursing facilities need a 2% rate increase to cover increased costs for utilities, food, insurance, and other costs over which we have no control. Some facilities will experience rate cuts due to changes in the case mix indexes. The cost of recruiting and retaining skilled employees is increasing. Being a highly regulated activity, nursing facilities have few places to cut costs. We will have no choice but to stop accepting residents who are eligible for Medicaid. Some facilities will have to cut staff hours or employment. This will have a detrimental effect on the quality of care we provide.

COMMENT #3: Nursing facilities face a unique problem among medical providers in that Medicaid is often more than 50% of the revenue stream. When Medicaid does not pay its share of treatment costs the burden is shifted onto private pay residents and, in some cases, local taxpayers.

COMMENT #4: Current rates for nursing facilities are about $12 per patient day less than the actual cost of care, and skilled nursing facility (SNF) market basket projections of inflation continue to be about 3% for FY 2011. This means that the gap between cost and rates will increase to about $17 per patient day for FY 2011. Costs for FY 2011 are projected to be about $179.15 per patient day while the rate is $161.58 (without direct care wage (DCW) and Intergovernmental Transfer (IGT) program).

COMMENT #5: The bottom line is that Montana's nursing facilities provide care to our most vulnerable elderly people who can no longer care for themselves. Because so many of those we care for are on Medicaid, and because the state has accepted responsibility for those on Medicaid, the state is our partner in assuring that these people get good care. Our ability to hire enough staff and to pay them a living wage, as well as our ability to pay our other expenses, is all dependent on whether the state pays us enough to get the job done. The state is shirking its responsibility to the elderly in our nursing facilities when it fails to provide adequate funding.

RESPONSE #2, #3, #4, and #5: Federal laws or regulations do not mandate that established Medicaid rates must cover all of the actual costs incurred by nursing facility providers. This is not a standard by which the legal adequacy of rates has been measured in the past nor is it the standard that will be utilized in the future.

The department has developed rates which are reasonable and adequate and in compliance with all requirements. The price is reflective of many factors that impact the ways that nursing facilities do business and is set at a level that is fair when considering all of those factors together.

The statewide price is determined through a public process. Factors that are considered in the establishment of this price include the cost of providing nursing facility services, Medicaid recipient's access to nursing facility services, the quality of nursing facility care as well as budgetary or funding levels. The price-based rate reflects a rate commensurate with the services that are required to be provided by nursing facility providers when meeting federal and state requirements. Predictability of the reimbursement calculation is one of the required features of the price-based reimbursement approach, as is the recognition of the changes in acuity of the residents in a facility over time.

Montana contracts with Myers and Stauffer LC to prepare an annual analysis of each nursing facility's cost of providing nursing facility services to Medicaid recipients, and each facility's reimbursement rate. The analysis provides the department with an evaluation tool as to the adequacy of the statewide pricing for Montana nursing facilities and has done so since 2002. The annual rate to cost analysis that is preformed for the rate setting process indicates for state fiscal year 2009 that Montana's Medicaid day-weighted average total rate that includes all supplemental payments (IGT and DCWs) was $164.32 compared to the Medicaid inflated cost of $172.61, or that on average Medicaid is covering approximately 95% of cost through the various forms of reimbursement to nursing facility providers.

Montana nursing facilities will continue to receive increases from DCW funding that is separate from the 2% provider rate increase funding, and will continue to participate and benefit from the IGT that provides supplemental payments in addition to the Medicaid payment rate set through the reimbursement methodology during fiscal year 2011. The DCW program provides funding separately from the reimbursement rate calculation, to help facilities provide wage increases to its direct care workforce and will provide over $5.7 million dollars in ongoing funding during this fiscal year that can only be used to provide for lump-sum bonus or wage payments to direct care workers. The IGT program provides funding separately to both county and noncounty facilities. County nursing facilities receive total combined funding from Medicaid reimbursement, to the upper payment limit (UPL) or at a minimum a net gain of $5 per day, while noncounty facilities receive IGT funding of almost $2 per day in addition to their reimbursement rates and direct care wage funds to support their Medicaid residents.

Occupancy in Montana for nursing facility care has been declining for some time. The current statewide occupancy level is at 70% with several facilities operating at occupancy levels of under 50%. With these levels of occupancy there are open and available beds for those individuals that seek to access nursing facility placements. While some facilities are operating at a much fuller occupancy level there is capacity in many of Montana's nursing facilities to place individuals that require this level of service. If some facilities feel that they can no longer admit Medicaid residents that is unfortunate, but we believe that there will be other facilities that will admit these residents and provide Medicaid funded nursing facility services.

Acuity Comments

COMMENT #6: The overall acuity of Medicaid residents from FY 2010 to FY 2011 has increased, meaning these residents require more care and more resources. However, no funding was added to account for the increase in acuity. This is an increase that is separate from general inflation and should be paid for regardless of whether there is an inflationary rate increase. The nursing component of the rate did not take into account the increased cost of providing nursing care to residents, nor did it take into account the increased acuity of the residents. The rate spreadsheets reflect rate reductions for approximately half of the nursing facilities providing care to Medicaid residents due to changes in the case mix indexes. This relates to the operation of the case mix index in the reimbursement formula, which is designed to compensate facilities according to the acuity of the Medicaid residents they serve.

COMMENT #7: The department proposes to update the changes in case mix values without adding funding. This means that some facilities will actually receive less money from Medicaid, while others will receive additional funding. We recommend that the department approve a rate increase for those facilities that have increased patient acuity. We ask that the department freeze those per day rates that would otherwise drop due to a decrease in patient acuity. This policy represents a small concession to those facilities that will face a very difficult time cutting staff or costs. Such an action should not require substantial state GF.

COMMENT #8: Nursing facilities continue to experience increased acuities for residents' conditions. This requires increased levels of care and services. Medicaid rate cuts are not consistent with this trend.

RESPONSE #6, #7, and #8: Currently, nursing facilities are reimbursed under a case mix price-based system of reimbursement.

Each nursing facility receives the same operating per diem rate, which is 80% of the statewide price. The remaining 20% of the statewide price represents the direct resident care component of the rate and is acuity adjusted. Each facility's direct resident care component rate is specific to that facility and is based on the acuity of Medicaid residents served in that facility. As acuity changes in each facility based on the level of complexity of the residents being served relative to the statewide acuity, facility rates adjust upward or downward to account for this change in acuity. This was a component that was considered necessary when the price-based system of reimbursement was first adopted to account for and reflect the level of complexity of residents being served and adjust accordingly to account for this change in acuity in each facility. In order to minimize the volatility of the rates from year to year, which was a negative feature of the previous reimbursement system, only 20% of the overall price is adjusted for these changes in acuity.

With no increases in the overall funding in the system of reimbursement, facility rates will adjust upward or downward based on the acuity of their residents, especially if the acuity level is significantly higher or lower than the acuity of the prior year for that facility. To override this component of the reimbursement methodology, as is being proposed; in order to insulate facilities from these changes in rates would be to circumvent one of the very features that providers believed was important in a rate system, the recognition of changes in the level of acuity of residents in each facility.

In order to protect facilities from rate decreases related to decreased acuity of residents additional funding would be needed. As the department responded previously there is no additional funding being provided in the form of a rate increase to mitigate these decreases. In fact, had the funding for the 2% provider rate been added to the rate system, there still would have been facilities that had rate decreases due to the significant changes in acuity that occurred at their facilities.

The department will not make the change to the reimbursement system that is being proposed relative to the recognition of acuity in the rate calculation.

Bed Day Comments

COMMENT #9: There are many components to nursing facility rates including the number of days funded and the amount of patient contribution. Declining Medicaid days and increasing patient contribution make funding the increase in acuity and also a modest inflationary rate increase both possible and necessary and is in keeping with the intent of the Legislature.

According to the Legislative Fiscal Division (LFD) Fiscal Report which summarizes the actions of the Legislature related to appropriations, the Legislature appropriated sufficient funding for FY 2011 to pay for 1,132,003 patient days. Estimated days for FY 2011 are 1,119,000, which mean that about $1.6 million in state and federal funds remain unspent. In addition, based on Medicaid days reported by facilities as well as paid claims, it would appear that even the reduced Medicaid days of 1,119,000 used in the rate spreadsheet are too high. It is important that the patient days used to distribute available funding be as accurate as possible to assure that all of the funding currently available and appropriated for nursing facility services is distributed to these facilities that desperately need this funding to continue to provide care to Medicaid beneficiaries.

COMMENT #10: At this time we believe there is sufficient funding appropriated by the Legislature (without the funding for the 2% provider rate increase) to fund both the increase in acuity and a modest rate adjustment. This will assure that no facility receives a rate decrease. Funding is available because of the significant decrease in patient days.

RESPONSE #9 and #10: The department has reviewed paid claims data from March, April, and May of 2010 to estimate the number of days of care that will be provided in FY 2010 in order to determine if there is any flexibility to reduce the Medicaid days used in the 2011 rate calculation based on current utilization patterns. Additionally we have looked at current trends in patient contribution from paid claims data to determine what level of patient contribution will be available for the 2011 rate calculation.

The department estimates that patient contribution will be approximately $29 -$29.15 by the end of FY 2010 using current paid claim information. Patient contribution typically increases on January 1 of each calendar year when the Social Security Administration (SSA) provides a cost of living adjustment (COLA). The COLA typically increases anywhere from 2% to 5% depending on the economy. A more significant increase of approximately 7% was provided in calendar year 2009 resulting in no increase on January 2010 in the COLA. It is not yet certain if there will be a COLA increase or what level of increase retirement plans will have that may impact the patient contribution provided by nursing facility residents under Medicaid for rate year 2011. The department has estimated a modest increase of 2% which calculates at approximately $29.60 per day for the patient contribution offset in the rate calculation. This is the rate that was used to determine the amount of funding that will be available from patient contribution for rate calculation purposes. We do not believe there is any justification to adjust this component higher in the final rate calculation as this estimate seems reasonable.

The days that are in the LFD report were the estimate of the days that would be available at that time. The level of days that were utilized in FY 2010 was already adjusted lower than this number in order to provide the 2% rate increase in 2010 to nursing facility providers.

For the draft rate sheet the department used an estimate of 1,119,000 Medicaid bed days.

The department has continued to refine our calculation of bed days since this rule was first proposed. With the additional data now available to us, we are decreasing our projected bed days by 1.5% which is 17,000 days less than we utilized in the original proposed rate sheet with the inclusion of the acuity information. This adjustment is based on our estimation of updated actual nursing bed utilization, historic movement of clients to community-based options, and trends in facility occupancy. This adjustment for bed days, without adding any additional funding, will increase the statewide average rate by approximately 1.2% from the 2010 level of $161.99.

This adjustment will result in fewer facilities receiving a rate decrease in combination with the case mix acuity factors in the rate methodology.

Modest Rate Increase Comments

COMMENT #11: We recommend that the department reconsider its decision not to provide the rate hike. In the alternative, we recommend that the department provide a 1.5% increase, or provide a full increase later in the fiscal year if the state budget pressures ease.

RESPONSE #11: The department has responded to this issue in its response to the 2% provider rate increase. As of April 19, 2010, the date of this proposed rule amendment filing with the Secretary of State, there is a projected Montana GF budget deficit as that term is defined in 17-7-140(3), MCA for SFY 2011. The Governor is required to implement a GF spending reduction plan, when projected state GF revenue projections, when compared to the appropriations for the biennium passed by the 2009 Legislature, may result in an ending fund balance below statutory limits. In accordance with the 17-7-140(3), MCA the Governor has implemented a 5% GF reduction plan. As part of the department's statutorily required spending reduction plan the appropriation for the 2% provider rates will not be implemented for nursing facility providers in fiscal year 2011. There is no ability for the department to provide additional funding for a 1.5% provider rate increase as is suggested.

State-Owned Nursing Facility Comments

COMMENT #12: Comments were received relative to the operation of the state owned and state operated veterans' facility in Columbia Falls. The state knows what kind of financial commitment it takes to provide good care to the elderly in nursing facilities. The state owned nursing facility in Columbia Falls spends about $270 per patient day to provide care in its own nursing facility, while expecting its private partners to provide the same care and meet the same regulations for $161 per patient day.

RESPONSE #12: Montana operates and manages the Montana Veterans' Nursing Home (MVH) in Columbia Falls. This facility runs much like other facilities relying on billing to Medicaid, Medicare, private pay (based on the ability to pay), but is also eligible for federal veterans' administration (VA) funding in the form of VA per diem. Admission to the facility is limited to those 55 and older with active service and an honorable discharge or in some cases, depending on bed availability, spouses of veterans.

To the extent revenues do not match the costs that have been incurred, which are limited by the Legislature for the operation of this facility, they are eligible to use funding up to the levels appropriated by the Legislature in the form of SSR from the cigarette tax. At MVH, residents pay on the basis of their ability to pay, while the VA contributes toward the cost of care for each veteran. The funding from cigarette taxes has been a commitment that has been made since 1992 by the Legislature to offset the expenses for those veterans at the facility who cannot pay full cost.

In the current state fiscal year, FY 2010, MVH has a Medicaid rate of $160.32 which is less than the statewide average Medicaid rate of $161.99. Sixty-one of the eighty-two Montana nursing facilities have a higher Medicaid rate than MVH in FY 2010.

In the most recent "Analysis of Medicaid Nursing Facility Rate for State Fiscal Year 2009," prepared by Myers and Stauffer, LC, three of the seventeen facilities with more beds than MVH (105 beds) have per diem Medicaid costs higher ($337.52, $300.95, and $275.25) than the $261.81 at MVH. Twenty-three of the eighty-three facilities including MVH have per diem costs above $200.

MVH could not participate as the other 82 nursing facilities did in the 2010 DCW as they are part of the state pay plan and could not receive this increased funding when other wages were frozen.

FMAP Comments

COMMENT #13: If the department is unable to provide the appropriated 2% provider rate increase at this time, we ask that it be implemented at such time as the federal government extends the enhanced federal match rate, which is still being strongly considered by the United States Congress. Estimates are that this federal action will increase state GFs this biennium in an amount ranging from $40 million to $49 million.

RESPONSE #13: To date Congress has not passed an extension of the enhanced Medicaid federal medical assistance percentage (FMAP) beyond the December 2010 date. At the present time we do not know when, or if, Congress will pass the extension of the enhanced FMAP. We do not believe that we could simply utilize these funds as suggested due to the GF expenditure reduction that has been implemented under 17-7-140(3), MCA.

IGT Comments

COMMENT #14: The department's comments and justifications to the rules and the proposed IGT spreadsheets provided by the department do not distribute the full amount of IGT funding appropriated by the Legislature. MAR Notice 37-504, published by the Secretary of State on April 29, 2010, issue number 8, page 991 explains that total funding for one-time payments (IGT) to nursing facilities is $5,565,935 in total funds. However, the Legislature appropriated $5,971,191 in total funding, including $845,412 which is not mentioned in MAR Notice 37-504 at all. (See LFD Fiscal Report which summarizes the actions of the Legislature related to appropriations.)

It appears the department is taking the position that the GFs are contingent on certain thresholds being met as was the case in the 2009 biennium. However, no such restrictions were placed on this funding by the 2009 Legislature for the 2011 biennium. The executive budget proposed this amount - unrestricted - and the Legislature approved it as proposed. The Legislative Fiscal Division raised the issue in its analysis of the executive budget and suggested the legislature might want to add language to restrict this funding. The Legislature did not do so.

The $845,000 GF appropriation to the IGT program provided funds necessary to assure that the base funding levels in nursing facilities and community services is made whole. This is ongoing GF money, not one time only funding. It is important that the programs that were intended to receive these funds in fact receive them. It is irresponsible to continue to have these programs dependent on county IGT funds when the Legislature appropriated money to alleviate this problem.

We urge the department to distribute the full amount of IGT funding appropriated by the Legislature, including the use of the $845,412 GF for the purpose for which it was intended.

COMMENT #15: The state of Montana is not only proposing to withhold the 2% provider rate increase approved by the Legislature in House Bill (HB) 645, but is also proposing to withhold an additional $845,412 GF appropriated for the IGT program in HB 2. This IGT funding was not part of the Governor's 5% cuts, so what is the basis for withholding this money?

RESPONSE #14 and #15: The Decision Package titled Annualize IGT Offset Funding which was part of the Senior and Long Term Care Division 2009 legislative request was to appropriate $845,412 in each year of the biennium to continue the 2007 legislative initiative which added $2.8 million GF over the 2009 biennium. These funds were to offset anticipated reductions in the IGT programs SSR used as state Medicaid match for the current level funding in nursing home and home-based services.

Traditionally this appropriation was restricted and could be used only if there were federal rule changes that restricted the availability of IGT funds as Medicaid match or if the program was not viable. Historically there has been specific language and restrictions on the use of these funds so that they could not be used unless certain conditions were met.

The department in its approach to utilizing these funds went back to the original request to the 2009 Legislature and the decision package language that outlines how these dollars were proposed to be used if the IGT program was not viable. Viable was defined as receiving enough county IGT funds for the state Medicaid match to fund a daily payment of $5 to county nursing facilities and $2 to all other nursing facilities.

In 2008, approximately $720,000 of the IGT offset GF was utilized to fund the base in the nursing facility and home-based program reducing the need for SSR in FY 2010 and 2011 to the $845,412 level that was appropriated.

During the current FY 2010, the department proposes to utilize GF from the IGT offset in the amount of $265,184, in order to offset the reduction in SSR from two counties that could not provide the county funds up to the UPL. The state did not receive enough funding from the counties to make the IGT program viable under the definition of the funding language. As a result, the shortfall in SSR was funded with the offset funding. Thus the department did utilize funding from the IGT offset consistent with previous uses of these funds and for the purpose that they were appropriated. We do not concur that monies were or are being withheld.

The commenter is correct that there is no specific language in HB 2 that says how these funds should or should not be used, nor are they restricted funds which means that unlike other years these funds are available to fund other portions of the program if they are not utilized in the IGT program. There is no legislative direction or language that is consistent with the commenter's analysis that all of the GFs should be or could be used to offset the base funding in the nursing facility or home-based programs from the IGT Offset funding which is why the program maintained the payments for IGT within the parameters that have been applied previously for the distribution of this funding.

For clarification on the comment, the $5,565,935 identified is FY2010 funding appropriated for the IGT program, while the $5,971,191 identified is the FY 2011 funding level.

Direct Care Wage Comments

COMMENT #16: We support the way ARM 37.40.361 Direct Care Wage Reporting implements the funding available for nursing facility workers, including the use of a lump-sum payment made to facilities twice a year. It is our understanding that the available $5,729,330 will be distributed to facilities based on Medicaid bed days.

COMMENT #17: We support the direct care wage increase proposed by the department. It will make it easier for nursing facilities to recruit and retain direct care staff.

RESPONSE #16 and #17: The department will continue to provide the funding available in the DCW appropriation in 2011 in the same manner that these funds were distributed in FY 2010. The Legislature appropriated this funding under HB 645 to be used to specifically raise provider rates for Medicaid services to allow for wage increases or lump-sum payments to workers who provide direct care and ancillary services. This funding must be used to raise direct care worker wages and related benefits or to provide lump-sum payments in the form of bonuses or stipends to workers who provide direct care and ancillary services. Medicaid providers in the Senior and Long Term Care Division's programs are a group of providers that have consistently received targeted funding appropriated by the Legislature directed at increasing direct care workers wages.

COMMENT #18: Last year we appropriated monies in our budget to increase pay for all of our direct care workers. We are a union facility and our contracts extend for three years. Last year we signed a contract, which provided for a raise for our employees and felt sincerely that we could handle this raise. In part due to the funds which were supposed to be made available to us through the Legislative Session of 2009. This we had also accepted "in good faith". Now we are told that the Governor has frozen that money and quite honestly taken back that which was promised to the skilled nursing facilities. Both as a provider of services to our Medicaid recipients and as an honest and fair employer I will not go back on my word; however, I have no choice but to make budget cuts and all of these will affect the resident care all us in health care find most critical.

COMMENT #19: Do you realize what not giving nursing facilities that 2% raise means to not only the residents in our facility but to our staff? We have certified nursing aides (CNAs) that haven't had a raise in years because there is not enough money. Our wages are capped and not a chance of getting a raise in the near future. Our hours are being cut; can you imagine what this is doing to the single parents trying to make ends meet. I hope you will reconsider this as we are paying wages that are way too low because we are not getting enough from Medicaid. Please reconsider and give us the much needed 2% so that we can all benefit.

COMMENT #20: Staffing levels will be cut, staff will lose their jobs.

Staff who are not let go will not receive a wage increase or a bonus again.

In my facility, all hourly wage staff has not received an adjustment to their wage for two years. Last year, we received a bonus to compensate for the legislative change regarding the 2%. This year, we may not even receive a bonus. Our wages do not reflect the current standard of living. Our wages are basically frozen at the mercy of Governor Schweitzer and the Legislature. If I didn't love my job and where I work so much, I would be looking for another job outside of healthcare to earn a better wage.

COMMENT #21: The cost of recruiting and retaining skilled employees is increasing. Being a highly regulated activity, nursing facilities have few places to cut costs. We will have no choice but to stop accepting residents who are eligible for Medicaid. Some facilities will have to cut staff hours or employment. This will have a detrimental effect on the quality of care we provide.

RESPONSE #18, #19, #20, and #21: The department received several comments stating that the funding provided by the 2009 Legislature for direct care wage initiatives is an important factor allowing providers to continue to deliver quality care to Montana seniors. The department concurs and the DCW funding was not included as part of the 5% GF reduction plan under 17-7-140(3), MCA as implemented by the Governor.

For the last two bienniums (FY 2008-2009 and FY 2010-2011) provider rate increases were given directly to fund wage increases for nursing facility providers. This funding was appropriated separately from any other provider rate increases and was specifically focused at direct care workers.

The 2007 Montana Legislature authorized the Department of Public Health and Human Services, Senior and Long Term Care Division funding of $5,107,142 in both years of the biennium (2008 and 2009) for the purpose of increasing direct care worker wages, to first be used to raise the CNA wages in Nursing Facility Services Bureau and personal care attendants in the Community Services Bureau to $8.50 an hour with related benefits. Any funds that remained after these funds were allotted for moving workers to $8.50 were then used in conjunction with other designated wage funding to increase all wages by up to $.70 cents per hour with related benefits, for all direct care workers in these programs.

The 2009 Montana Legislature authorized the Department of Public Health and Human Services $5,729,357 of one-time-only (OTO) funding in each year of the biennium under HB 645 to raise provider rates for Medicaid services to allow for wage increases or lumps sum payments to workers who provide direct care and ancillary services. During this biennium, funds in the Direct Care Worker Wage Increase could be used to 1) raise direct care worker and ancillary worker wages and related benefits; and/or 2) to provide lump-sum payments (i.e. bonuses, stipend, etc.) to workers who provide direct care and ancillary services. Since the funds were one time only, nursing facility providers were given the option in determining the best way to distribute those funds. Medicaid programs under the Senior and Long Term Care Division were the only programs to receive direct care wage funding during the 2011 biennium.

In the second year, (FY 2011) of the biennium, funding of $5,729,330 will again be made available to provide for a one-time-only direct care worker wage increase. The funding for FY 2011 will be allocated to facilities using the same methodology that was used in FY 2010.

The designated OTO funds for direct care workers have not been reduced as part of the 5% reduction plan and will again be available to be distributed to providers in FY 2011. It should be noted that these funds are OTO and as such will not be an ongoing source of funding after FY 2011 unless the Legislature continues to appropriate this designated funding.

Other Miscellaneous Comments

COMMENT #22: We are not planning to curtail access to Medicaid services. But Medicaid policy continues to require providers to transfer patients from swing-beds to other long term care facilities. This policy stems from a policy bias adopted years ago when swing-bed providers were a new and limited treatment provider.

We ask that the department act to eliminate the transfer policy imposed on swing-bed providers. The policy is antiquated, imposes considerable costs on the provider, and unnecessarily burdens the facility resident. The policy also confounds the provider's ability to manage its brick and mortar infrastructure and staffing.

Repealing the transfer policy is another way that the department can help providers cope with the payment freeze, reduce administrative costs and assure access to Medicaid beneficiaries.

RESPONSE #22: These comments are not relevant to the rule changes that are being considered as part of these amendments. The department updated the hospital swing-bed rules in September 2009, and received no comments for testimony related to the changes that were proposed at that time. The department will consider these comments if administrative rule changes that encompass the hospital swing-bed program are proposed.

4. The department intends to apply these rules effective July 1, 2010.

/s/ John Koch /s/ Anna Whiting Sorrell

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State June 14, 2010.