OFFICE OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES
EMERGENCY/PROPOSED RULE MAKING
HEARING(S) SCHEDULED
I.D No. MRD-08-07-00002-EP
Filing No. 153
Filing Date. Feb. 01, 2007
Effective Date. Feb. 01, 2007
Rate/Fee Setting
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Amendment of sections 81.10, 635-10.5, 671.7, 680.12 and 681.14 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.07, 13.09(b) and 43.02
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
Fiscal uncertainties precluded OMRDD from securing necessary control agency approvals to allow for timely proposal and promulgation of these amendments within the regular SAPA procedural time frames. The emergency amendments revise the rates/fees of reimbursement of the referenced facilities and services. If OMRDD did not file this emergency adoption and establish the regulatory authority to pay the revised rates and fees effective February 1, 2007, the loss of revenues could have a deleterious effect on the fiscal viability of some providers, especially those which have smaller operations. This potential negative effect could translate into compromised services for citizens with developmental disabilities who need such services.
Subject:
Rate/fee setting in voluntary agency operated integrated residential community programs (81.10); individualized residential alternative (IRA) facilities and home and community-based (HCBS) waiver services (635-10.5); HCBS waiver community residential habilitation services (671.7); specialty hospitals (680.12); and intermediate care facilities for persons with developmental disabilities (681.14).
Purpose:
To revise the methodologies used to calculate rates/fees of the referenced facilities or programs. More specifically, the amendments are concerned with establishing trend factors to be applied within the context of the referenced reimbursement methodologies, effective Feb. 1, 2007.
Public hearing(s) will be held at:
10:30 a.m., April 9, 2007* at Brooklyn DDSO, 888 Fountain Ave., Bldg. 1, 2nd Fl. Conference Rm., Brooklyn, NY; and 10:30 a.m., April 10, 2007* at Office of Mental Retardation and Developmental Disabilities, 44 Holland Ave., Albany, NY.
*Please call OMRDD at (518) 474-1830 no later than Monday, April 2 to indicate that you intend to participate.
Accessibility:
All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.
Interpreter Service:
Interpreter services will be made available to deaf persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.
Text of emergency/proposed rule:
Subdivision 81.10(b) - Add new paragraph (4):
(4) Trend factors applicable to reimbursement fees for integrated residential communities. The following trend factors shall be applied to the IRC fee established pursuant to paragraphs (b)(1)-(2) of this section and approved by the commissioner acting with the concurrence of the Director of the Budget.
(i) Effective February 1, 2007, integrated residential communities shall receive an amount they would have received if there had been a trend factor of 5.33 percent applied to the fee in effect for calendar year 2005. The fee in effect for the fee period ending December 31, 2004 shall be deemed to be increased in the amount of 5.33 percent.
(ii) Effective February 1, 2007, integrated residential communities shall receive an amount they would have received if there had been a trend factor of 3.03 percent applied to the fee in effect for calendar year 2006. The fee in effect for the fee period ending December 31, 2005 shall be deemed to be increased in the amount of 3.03 percent.
(iii) From February 1, 2007 to December 31, 2007, integrated residential communities shall be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the fee period. On January 1, 2008, the trend factor for the previous fee period shall be deemed to be the 2.97 percent full annual trend.
Paragraph 635-10.5(i)(1) - Add new subparagraph (xxv):
(xxv) 2.97 percent to trend 2006–2007 costs to 2007–2008. The application of these trend factors shall include services provided in accordance with paragraph (c)(2) of this section. For agency sponsored family care, the agency must pay the trend related to the difficulty of care payment to the individual family care provider.
Note: Rest of paragraph is renumbered accordingly.
Paragraph 635-10.5(i)(2) - Add new subparagraph (xxv):
(xxv) From February 1, 2007 to December 31, 2007, facilities will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the fee period. On January 1, 2008, the trend factor for the previous fee period shall be deemed to be the 2.97 percent full annual trend. The application of these trend factors shall include services provided in accordance with paragraph (c)(2) of this section. For agency sponsored family care, the agency must pay the trend related to the difficulty of care payment to the individual family care provider.
Note: Rest of paragraph is renumbered accordingly.
Clause 671.7(a)(1)(vi)(a) - Add new subclause (15):
(15) For calendar year 2007: NYC and Nassau, Rockland, Suffolk, and Westchester Counties $ 30.63 per day Rest of State $ 29.63 per day
Note: Rest of clause remains unchanged.
Clause 671.7(a)(1)(xvi)(a) - Add new subclause (13):
(13) 0.00 percent from January 1, 2007 through December 31, 2007.
Clause 671.7(a)(1)(xvi)(b) - Add new subclause (13):
(13) 0.00 percent from July 1, 2007 through June 30, 2008.
Paragraph 680.12(d)(3) - Add new subparagraph (xx):
(xx) From February 1, 2007 to December 31, 2007, the specialty hospital will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the rate period. On January 1, 2008, the trend factor for the previous rate period shall be deemed to be the 2.97 percent full annual trend.
Add new subclause 681.14(c)(3)(ii)(b)(7):
(7) If a facility is subject to an expanded desk audit per subclause (2) of this clause, but the desk audit has not been completed by January 1, 2007 or July 1, 2007, OMRDD shall continue the rate established according to the first sentence of subclause (3) of this clause and, if applicable, further trended to 2007 or 2007–2008 dollars until OMRDD completes the expanded desk audit. Upon OMRDD's completion of the expanded desk audit, for the base period and subsequent periods beginning January 1, 2003 or July 1, 2003, the methodology described in this section will apply.
Subparagraphs 681.14(h)(1)(xvi)-(xviii) are amended as follows:
(xvi) Effective February 1, 2006, facilities will receive an amount that they would have received if the trend factor in subparagraph (xv) of this paragraph for the rate period of July 1, 2005 to June 30, 2006 were increased in the amount of 2.0 percent. The trend factor in effect for the rate period ending June 30, 2006 shall be deemed to be increased in the amount of 2.0 percent; [and]
(xvii) 3.03 percent for 2005–2006 to 2006–2007[.]; and
(xviii) 2.97 percent for 2006–2007 to 2007–2008.
Subparagraphs 681.14(h)(2)(xvi)-(xviii) are amended as follows:
(xvi) Effective February 1, 2006, facilities will receive an amount that they would have received if the trend factor in subparagraph (xv) of this paragraph for calendar year 2005 were increased in the amount of 2.0 percent. The trend factor for the rate year ending December 31, 2005 shall be deemed to be increased in the amount of 2.0 percent; [and]
(xvii) 3.03 percent for 2005 to 2006 [.]; and
(xviii) From February 1, 2007 to December 31, 2007, facilities will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the rate period. On January 1, 2008, the trend factor for the previous rate period shall be deemed to be the 2.97 percent full annual trend.
Subparagraphs 681.14(h)(3)(xxiv)-(xxvi) are amended as follows:
(xxiv) Effective February 1, 2006, facilities will receive an amount that they would have received if the trend factor in subparagraph (xxiii) of this paragraph for the rate period of July 1, 2005 to June 30, 2006 were increased in the amount of 2.0 percent. The trend factor in effect for the rate period ending June 30, 2006 shall be deemed to be increased in the amount of 2.0 percent; [and]
(xxv) 3.03 percent for 2005–2006 to 2006–2007 [.]; and
(xxvi) 2.97 percent for 2006–2007 to 2007–2008.
Subparagraphs 681.14(h)(4)(xxiv)-(xxvi) are amended as follows:
(xxiv) Effective February 1, 2006, facilities will receive an amount that they would have received if the trend factor in subparagraph (xxiii) of this paragraph for calendar year 2005 were increased in the amount of 2.0 percent. The trend factor for the rate year ending December 31, 2005 shall be deemed to be increased in the amount of 2.0 percent; [and]
(xxv) 3.03 percent for 2005 to 2006 [.]; and
(xxvi) From February 1, 2007 to December 31, 2007, facilities will be reimbursed operating costs that result in a full annual trend factor of 2.97 percent for the rate period. On January 1, 2008, the trend factor for the previous rate period shall be deemed to be the 2.97 percent full annual trend.
This notice is intended
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire May 1, 2007.
Text of rule and any required statements and analyses may be obtained from:
Barbara Brundage, Director, Regulatory Affairs Unit, Office of Mental Retardation and Developmental Disabilities, 44 Holland Ave., Albany, NY 12229, (518) 474-1830; e-mail: barbara. brundage@omr.state.ny.us
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
5 days after the last scheduled public hearing.
Additional matter required by statute:
Pursuant to the requirements of the State Environmental Quality Review Act (SEQRA) and in accordance with 14 NYCRR Part 622, OMRDD has on file a negative declaration with respect to this action. Thus, consistent with the requirements of 6 NYCRR Part 617, OMRDD, as lead agency, has determined that the action described herein will not have a significant effect on the environment, and an environmental impact statement will not be prepared.
Regulatory Impact Statement
1. Statutory Authority:
a. The New York State Office of Mental Retardation and Developmental Disabilities' (OMRDD) statutory responsibility to assure and encourage the development of programs and services in the area of care, treatment, rehabilitation, education and training of persons with mental retardation and developmental disabilities, as stated in the New York State Mental Hygiene Law Section 13.07.
b. OMRDD's authority to adopt rules and regulations necessary and proper to implement any matter under its jurisdiction as stated in the New York State Mental Hygiene Law Section 13.09(b).
c. OMRDD's responsibility, as stated in section 43.02 of the Mental Hygiene Law, for setting Medicaid rates for services in facilities licensed by OMRDD.
2. Legislative Objectives: These emergency/proposed amendments further the legislative objectives embodied in sections 13.07, 13.09(b), and 43.02 of the Mental Hygiene Law. The enactment of these emergency/proposed amendments will ensure the funding to voluntary agency providers of the following services:
a. Programs authorized by OMRDD to operate as integrated residential communities (amendments to section 81.10).
b. Individualized Residential Alternative (IRA) facilities and Home and Community-based (HCBS) Waiver services (amendments to section 635-10.5).
c. Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7).
d. Specialty Hospitals (amendments to section 680.12).
e. Intermediate Care Facilities for Persons with Developmental Disabilities (ICF/DD) (amendments to section 681.14).
This funding is necessary in order to enable voluntary agencies that operate the above facilities to maintain services in the areas of care, treatment, rehabilitation, and training of persons with mental retardation and developmental disabilities.
3. Needs and Benefits: From the time of their inception and implementation in New York State, OMRDD has provided funding for the above referenced facilities and services. Such funding is necessary to assure the continued delivery of services to persons with developmental disabilities. The emergency/proposed amendments are concerned with identifying the respective trend factors applicable to these facilities and services, effective February 1, 2007.
Fiscal uncertainties precluded OMRDD from securing necessary control agency approval to allow for previous proposal and timely promulgation of these amendments within the regular SAPA procedural time frames. The loss of revenues, if OMRDD did not file this Emergency/Proposed Agency Action and establish the regulatory authority to reimburse providers of the above referenced facilities and services at revised rates/fees beginning February 1, 2007, could have a negative effect on the fiscal viability of some providers, especially those which have smaller operations. This potentially negative effect could translate into compromised services for citizens with developmental disabilities.
4. Costs:
a. Costs to the Agency and to the State and its local governments. The aggregate cost of the application of the trend factors contained in the emergency/proposed amendments is approximately $81.7 million. This represents approximately $40.8 million in State funds and $40.8 million in federal funds.
Pursuant to Social Services Law sections 365 and 368-a, local governments incur no costs for most of the above referenced facilities or services, or the State reimburses local governments for their share of the cost of Medicaid funded programs and services. Further, for the current State fiscal year, there are no costs to local governments as a result of these specific amendments because Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs.
The specific impacts by facility or program type are as follows:
For the one program currently certified by OMRDD as an integrated residential community (amendments to section 81.10). The estimated cost to the State of the proposed trend factor amendments will be approximately $ 115,000. There is no federal or local government share associated with this cost.
For Individualized Residential Alternative (IRA) facilities and Home and Community-based (HCBS) Waiver services (amendments to section 635-10.5). New York State currently funds IRA facilities and all authorized HCBS Waiver residential habilitation, day habilitation, supported employment, respite, and prevocational services for the approximately 58,000 persons receiving such services as of December 2006.
The emergency/proposed amendments implement a trend factor of 2.97 percent. The estimated cost for implementation of the trend factor contained in the emergency/proposed amendments on an annual aggregate basis is approximately $57.6 million for the fee periods beginning January 1, 2007 and July 1, 2007. This represents approximately $29.8 million in State share and $29.8 million in federal funds. There are no costs to local governments as a result of these amendments.
For Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7). Currently, OMRDD funds voluntary operated community residence facilities which are providing services to approximately 660 persons as of December 2006. The emergency/proposed amendments implement a trend factor of zero percent. There are therefore no costs attributable to this amendment, either to the State or to local governments.
The amendments to section 671.7 also update the SSI per diem allowances consistent with levels determined by the Federal Social Security Administration. There are no additional costs attributable to this conforming amendment, either to the State or to local governments.
For Specialty Hospitals (amendments to section 680.12). New York State funds the one such facility currently in operation. The emergency/proposed amendments implement a trend factor of 2.97 percent. The estimated total cost for implementation of this trend factor on an aggregate annualized basis is approximately $274,000 for the period beginning February 1, 2007. This represents approximately $137,000 in State share and $137,000 in federal funds. There are no costs to local governments as a result of the amendments.
For Intermediate Care Facilities for Persons with Developmental Disabilities (ICF/DD), (amendments to section 681.14). As of December 2006, there were approximately 5,900 people served in ICF/DD facilities in New York State. The emergency/proposed amendments implement a trend factor of 2.97 percent. The estimated cost for implementation of the trend factor contained in the emergency/proposed amendments on an annual aggregate basis is approximately $17.9 million for the rate periods beginning January 1, 2007 and July 1, 2007. This represents approximately $8.9 million in State share and $8.9 million in federal funds. There are no costs to local governments resulting from emergency/proposed amendments to section 681.14.
In all instances, these estimated cost impacts have been derived by applying the trend factor provisions of the emergency/proposed amendments within the context of the respective reimbursement methodologies to the providers of services certified or authorized as of December, 2006.
b. Costs to private regulated parties: There are no initial capital investment costs nor initial non-capital expenses. There are no additional costs associated with implementation and continued compliance with the rule. The emergency/proposed amendments are necessary to maintain funding of the above cited facilities at revised levels of reimbursement in effect as of February 1, 2007. To the extent that the amendments provide trend factor increases to the providers of the various facilities and services, the amendments will result in increased funding to provider agencies.
5. Local Government Mandates: There are no new requirements imposed by the rule on any county, city, town, village; or school, fire, or other special district.
6. Paperwork: No additional paperwork will be required by the emergency/proposed amendments.
7. Duplication: The emergency/proposed amendments do not duplicate any existing State or Federal requirements that are applicable to the above cited facilities or services for persons with developmental disabilities.
8. Alternatives: The current course of action as embodied in these emergency/proposed amendments reflects what OMRDD believes to be a fiscally prudent, cost-effective reimbursement of the facilities and developmental disabilities services in question. No alternatives to these trend factors were considered. There is no alternative to emergency adoption that would allow for prompt, timely implementation of the trend factor provisions contained in the emergency/proposed amendments.
9. Federal Standards: The emergency/proposed amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance Schedule: The emergency rule is effective February 1, 2007. OMRDD has concurrently filed the rule as a Notice of Proposed Rule Making, and it intends to finalize the rule as soon as possible within the time frames mandated by the State Administrative Procedure Act. The emergency/proposed amendments are concerned with revising the various reimbursement methodologies to implement trend factor adjustments for facilities and providers of services to persons with developmental disabilities. These amendments do not impose any significant new requirements with which regulated parties are expected to comply.
Regulatory Flexibility Analysis
1. Effect of rule: These emergency/ proposed regulatory amendments will apply to voluntary not-for-profit corporations that operate the following facilities and/or provide the following services for persons with developmental disabilities in New York State:
Programs certified by OMRDD as integrated residential communities (amendments to section 81.10). As of December 2006, there was only one program authorized by OMRDD to operate as an integrated residential community.
Individualized Residential Alternative (IRA) facilities, and Home and Community-based (HCBS) Waiver services (amendments to section 635-10.5). New York State currently funds IRA facilities and all authorized HCBS Waiver residential habilitation, day habilitation, supported employment, respite and prevocational services for the approximately 58,000 persons receiving such services as of December 2006.
Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7). Currently, OMRDD funds voluntary operated community residence facilities which serve approximately 660 persons.
Intermediate Care Facilities for Persons with Developmental Disabilities (ICF/DD), (amendments to section 681.14). As of December 2006, there were approximately 5,900 people served in ICF/DD facilities in New York State.
The OMRDD has determined, through a review of the certified cost reports, that the organizations which operate the above referenced facilities or provide the developmental disabilities services employ fewer than 100 employees at the discrete certified or authorized sites and would, therefore, be classified as small businesses.
There is only one Specialty Hospital (amendments to section 680.12) certified to operate in New York State. It employs more than 100 persons and would therefore not be considered a small business as contemplated under the State Administrative Procedure Act (SAPA).
The emergency/proposed amendments have been reviewed by OMRDD in light of their impact on these small businesses and on local governments. OMRDD has determined that these amendments will continue to provide appropriate funding for small business providers of developmental disabilities services. Further, OMRDD expects that the emergency/proposed amendments will not cause undue hardship to small business providers due to increased costs for additional services or increased compliance requirements. In fact, the provisions contained in the emergency/proposed amendments will either have no fiscal impact, or they will provide for increased reimbursements to small business providers of services, due to the application of the trend factors established by the amendments. Specific impacts of the increased funding are set forth in the accompanying Regulatory Impact Statement as costs to State and Federal government.
Pursuant to Social Services Law sections 365 and 368-a, local governments incur no costs for most of the above referenced facilities or services, or the State reimburses local governments for their share of the cost of Medicaid funded programs and services. Further, for the current State fiscal year, there are no costs to local governments as a result of these specific amendments because Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs.
2. Compliance requirements: There are no additional compliance requirements for small businesses or local governments resulting from the implementation of these emergency/proposed amendments.
3. Professional services: In accordance with existing practice, providers are required to submit annual cost reports by certified accountants. The emergency/proposed amendments do not alter this requirement. Therefore, no additional professional services are required as a result of most of these amendments. The amendments will have no effect on the professional service needs of local governments.
4. Compliance costs: There are no additional compliance costs to small business regulated parties or local governments associated with the implementation of, and continued compliance with, these emergency/proposed amendments.
5. Economic and technological feasibility: The emergency/proposed amendments are concerned with rate/fee setting in the affected facilities or services, and only revise the reimbursement methodologies which describe the ways in which OMRDD calculates the appropriate reimbursement of such facilities and services. The amendments do not impose on regulated parties the use of any technological processes.
6. Minimizing adverse impact: The purpose of these emergency/proposed amendments is to allow OMRDD to reimburse providers of the referenced services at revised levels in effect as of February 1, 2007. Specifically, these amendments establish trend factor adjustments for the regulations governing the reimbursement of the referenced facilities/services for the rate/fee periods beginning January 1, 2007 and July 1, 2007. The trend factor provisions will either have no impact on funding of small business providers of services, or will have positive impacts resulting from increased reimbursements to the providers.
As previously stated, the emergency/proposed amendments will have no fiscal impact on local governments due to the implementation of the trend factors.
These amendments impose no adverse economic impact on regulated parties or local governments. Therefore, regulatory approaches for minimizing adverse economic impact suggested in section 202-b(1) of the State Administrative Procedure Act are not applicable.
7. Small business and local government participation: To the extent that information regarding provider reimbursement has been available, OMRDD has shared and discussed such information with provider representatives.
In addition, OMRDD is required to hold public hearings only on those amendments to section 671.7 as they may affect reimbursement of the room and board components of the community residence fees. However, it has been OMRDD's longstanding practice to enlarge the scope of these scheduled public hearings so as to include all of the emergency/proposed amendments contained in this rule making, as well as to provide an opportunity to comment on any aspect of the various rate and fee setting methodologies. These hearings are scheduled to be held on April 9, 2007 (Brooklyn DDSO) and April 10 (OMRDD, 44 Holland Avenue), according to the specifications contained in the Notice for this rule making.
Rural Area Flexibility Analysis
A Rural Area Flexibility Analysis for these amendments is not submitted because the amendments will not impose any adverse impact or significant reporting, record keeping or other compliance requirements on public or private entities in rural areas. The amendments are concerned with providing necessary revisions to the reimbursement methodologies which OMRDD uses in determining the reimbursement of the affected developmental disabilities services or facilities. OMRDD expects that adoption of the amendments will not have adverse effects on regulated parties. Further, the amendments will have no adverse fiscal impact on providers as a result of the location of their operations (rural/urban), because the overall reimbursement methodologies are primarily based upon reported costs of individual facilities, or of similar facilities operated by the provider or similar providers in the same area. Thus, the reimbursement methodologies have been developed to reflect variations in cost and reimbursement which could be attributable to urban/rural and other geographic and demographic factors.
Job Impact Statement
A Job Impact Statement for these amendments is not being submitted because it is apparent from the nature and purposes of the amendments that they will not have a substantial impact on jobs and/or employment opportunities. This finding is based on the fact that the amendments are concerned with providing revisions to the reimbursement methodologies which OMRDD uses in determining the appropriate reimbursement of the affected developmental disabilities services or facilities. The amendments establish trend factors to be applied within the context of reimbursement methodologies for the various facility/program types. These trend factor increases are not expected to result in changes in reimbursements significant enough to affect staffing patterns within the regulated facilities or programs. They will not have any adverse impacts on jobs or employment opportunities in New York State.
