Bill Text: OH HB156 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To revise the types of costs included in determining nursing facilities' Medicaid reimbursement rates.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-03-15 - To Health & Aging [HB156 Detail]

Download: Ohio-2011-HB156-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 156

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 

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A BILL

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

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

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, wheelchairs,	25
resident transportation, maintenance and repairs, help-wanted	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, over-the-counter	132
pharmacy products, physical therapists, physical therapy	133
assistants, occupational therapists, occupational therapy	134
assistants, speech therapists, audiologists,prescription drugs,	135
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 Medicaidmedicaid recipient eligible for nursing facility	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 Medicaid	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