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H.B. 250






Sponsor: Jack A. Seitz

             6      This act modifies the Health Code. The act establishes a reimbursement methodology for
             7      nursing care facilities. The act defines terms. The act establishes required and
             8      permissive factors that must be included in the reimbursement methodology. The act
             9      exempts intermediate care facilities for the mentally retarded and intensive skilled
             10      Medicaid patients from the reimbursement methodology.
             11      This act affects sections of Utah Code Annotated 1953 as follows:
             12      ENACTS:
             13          26-18-12, Utah Code Annotated 1953
             14      Be it enacted by the Legislature of the state of Utah:
             15          Section 1. Section 26-18-12 is enacted to read:
             16          26-18-12. Nursing home reimbursement.
             17          (1) For purposes of this section:
             18          (a) "Behaviorally complex care resident" means, as determined by the department, a
             19      nursing care facility resident:
             20          (i) with a severe, medically based behavior disorder, including traumatic brain injury,
             21      dementia, Alzheimer's disease, and Huntington's Chorea, which causes diminished capacity for
             22      judgment, retention of information, or decision-making skills; or
             23          (ii) who has a medically based mental health disorder or diagnosis; and
             24          (iii) who meets the Medicaid criteria for nursing facility level of care; and
             25          (iv) who has a high level resource use in the nursing care facility not currently
             26      recognized in the case-mix rate.
             27          (b) "Case-mix index" means a score assigned to each nursing care facility resident by

             28      the department based on the average of the Medicaid patient's RUGS scores for that facility.
             29          (c) "Facility case-mix rate" means the rate the department issues to a nursing care
             30      facility for a specific period of time based on the case-mix index for the facility, a labor wage
             31      index established by the department, and other case-mix related costs established by the
             32      department.
             33          (d) "Nursing care facility" means a Medicaid participating nursing facility, skilled
             34      nursing facility, or combination thereof, as defined in 42 U.S.C. 1396r (a)(1988), 42 C.F.R.
             35      440.150 and 442.12 (1993).
             36          (e) "Occupancy level" means the nursing care facility's monthly occupied patient days
             37      divided by the total number of licensed beds averaged over a 12-month period.
             38          (f) "Property payment" means a reimbursement rate per day, as determined by the
             39      department, based on a level which is the same for all nursing care facilities to address property
             40      costs.
             41          (g) "Property payment add-on" means a reimbursement rate per day which is an
             42      individual nursing care facility rate in addition to the property payment ranging from $0 to a
             43      capped upper limit, as determined by the department, based on total allowable property costs
             44      from the calendar year 2001 Medicaid cost reports.
             45          (h) "RUGS" means the 34 RUG identification system based on the Resource
             46      Utilization Group System established by Medicare to measure and ultimately pay for the labor,
             47      fixed costs, and other resources necessary to provide care to Medicaid patients in nursing care
             48      facilities.
             49          (i) "Stop-loss" means a hold harmless rate of reimbursement which is established when
             50      a nursing care facility's overall payment rate is more than $5 less than the facility's December
             51      31, 2002, Medicaid payment rate.
             52          (j) "Swing bed" means a hospital bed utilized by a rural hospital as either an acute care
             53      bed or a posthospital skilled nursing facility level of care bed.
             54          (2) (a) The RUGS method of reimbursement adopted by the department on January 1,
             55      2003 shall be modified by July 1, 2003 to implement the requirements of this section.
             56          (b) The reimbursement for swing beds may be based on RUGS and the requirements of
             57      this section.
             58          (c) The reimbursement rates and methodology required by this section shall be

             59      established by administrative rule.
             60          (3) (a) The methodology of reimbursement required by Subsection (2) shall include the
             61      following:
             62          (i) a case-mix index;
             63          (ii) a facility case-mix rate; and
             64          (iii) a daily rate add-on for behaviorally complex care residents.
             65          (b) The methodology of reimbursement required by Subsection (2) may include the
             66      following:
             67          (i) a flat rate administrative component which is the same for all facilities;
             68          (ii) a property payment which is the same for all facilities;
             69          (iii) a property payment add-on in accordance with Subsection (4);
             70          (iv) an incentive to recognize facilities for high levels of quality of care; and
             71          (v) under criteria established by the department, additional payments for a facility:
             72          (A) in an underserved area; or
             73          (B) with underserved needs which are not reasonably compensated under RUGS.
             74          (4) A property payment add-on under Subsection (3)(b)(iii) shall be phased out by
             75      reducing the payment by 25% of the January 1, 2003 payment amount for each of the
             76      succeeding two calendar years, with the property payment add-on eliminated effective January
             77      1, 2006. The total amount of funds reduced each year from the property payment add-on shall
             78      be shifted to other components of the reimbursement rate and distributed to nursing care
             79      facilities.
             80          (5) (a) A nursing care facility shall receive the greater of:
             81          (i) the Medicaid RUGS payment; or
             82          (ii) the stop-loss payment rate, which shall be in effect for 18 months.
             83          (b) The stop-loss reimbursement under this Subsection (5) shall be eliminated July 1,
             84      2004.
             85          (6) This section does not apply to intermediate care facilities for the mentally retarded
             86      or to intensive skilled Medicaid patients.

Legislative Review Note
    as of 2-10-03 4:53 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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