OFFICE OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES
PROPOSED RULE MAKING
HEARING(S) SCHEDULED
I.D No. MRD-20-08-00033-P
Fee Setting
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed action:
Amendment of sections 671.7, 679.6 and 690.7 of Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.07, 13.09(b) and 43.02
Subject:
Fee setting in home and community-based (HCBS) waiver community residential habilitation services, clinical treatment facilities, and day treatment facilities for persons with developmental disabilities.
Purpose:
To establish cost of living (COLA) adjustments and trend factors applicable to these facilities and services, effective Aug. 1, 2008.
Public hearing(s) will be held at:
10:30 a.m., June 30, 2008* at Office of Mental Retardation and Developmental Disabilities, 44 Holland Ave., 3rd Fl., Counsel's Office Conference Rm., Albany, NY; and 10:30 a.m., July 1, 2008* at Office of Mental Retardation and Developmental Disabilities, 44 Holland Ave., 3rd Fl., Counsel's Office Conference Rm., Albany, NY.
* Please call OMRDD at (518) 474-1830 no later than Monday, June 23, 2008 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 proposed rule:
Paragraph 671.7(a)(1) — Add new subparagraphs (xxviii) and (xxix):
(xxviii) Effective August 1, 2008, community residences are eligible for a cost of living adjustment (COLA) to be included in their final net fee. This add-on is a 3.2 percent increase to the operating portion of allowed reimbursement and is for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. From August 1, 2008 to March 31, 2009, community residences will be reimbursed operating costs that result in a full annual COLA of 3.2 percent as if the COLA were reimbursed from April 1, 2008 through March 31, 2009. In order to receive this adjustment, a provider which did not submit a COLA attestation for 2007-2008 is required to submit to OMRDD a Letter of Attestation, signed by the Executive Director and President or equivalent of the governing body, which details how the COLA is expended.
(xxix) Facilities initially certified on or after April 1, 2009, shall be deemed to have met the requirements for an approved COLA add-on described in subparagraph (xxviii) of this paragraph, and a corresponding factor shall be included in the final net fee.
Subparagraph 679.6(j)(1)(v) — Add new clauses (ad) and (ae):
(ad) Effective August 1, 2008, facilities are eligible for a cost of living adjustment (COLA) of 3.2 percent to the operating portion of allowed reimbursement that was in effect on March 31, 2008. This adjustment is for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. From August 1, 2008 to March 31, 2009, facilities will be reimbursed operating costs that result in a full annual COLA of 3.2 percent as if the COLA were reimbursed from April 1, 2008 through March 31, 2009. In order to receive this adjustment, a provider which did not submit a COLA attestation for 2007-2008 is required to submit to OMRDD a Letter of Attestation, signed by the Executive Director and President or equivalent of the governing body, which details how the COLA is expended.
(ae) Facilities initially certified on or after April 1, 2009 shall be deemed to have met the requirements for the Letter of Attestation required in clause (ad) of this subparagraph.
Note: current clause (v)(ad) is renumbered as (af).
Subparagraph 690.7(d)(6)(iii) — add new clause (f):
(f) Effective August 1, 2008, facilities are eligible for a trend factor of 3.2 percent to the operating portion of the fee. This trend factor is for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. From August 1, 2008 to March 31, 2009, facilities will be reimbursed operating costs that result in a full annual trend factor of 3.2 percent as if the trend factor were reimbursed from April 1, 2008 through March 31, 2009. In order to receive this trend factor, a provider which did not submit a Letter of Attestation for 2007-2008 is required to submit to OMRDD a Letter of Attestation, signed by the Executive Director and President or equivalent of the governing body, which details how the trend factor monies are expended. Facilities initially certified on or after April 1, 2009 shall be deemed to have met the requirements for the Letter of Attestation required by this clause.
Text of proposed 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:
five 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 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 proposed amendments will ensure the funding to voluntary agency providers of the following services:
a. Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7).
b. Clinic Treatment Facilities (amendments to section 679.6).
c. Day Treatment Facilities for Persons with Developmental Disabilities (amendments to section 690.7).
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 proposed amendments are concerned with establishing the respective cost of living (COLA) adjustments and trend factors applicable to these facilities and services, effective August 1, 2008.
4. Costs:
a. Costs to the agency and to the State and its local governments. The aggregate cost of the application of the COLAs and trend factors contained in the proposed amendments is approximately $4.45 million. This represents approximately $2.22 million in State funds and $2.22 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 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 490 persons as of January 2008. The amendments implement a COLA of 3.2 percent on the operating portion of allowed reimbursement for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. OMRDD anticipates that all eligible providers will avail themselves of this increase. The estimated total cost for implementation of this COLA on an aggregate annualized basis is approximately $1,488,000 for the period beginning April 1, 2008. This represents approximately $744,000 in State share and $744,000 in federal funds. There are no costs to local governments as a result of the amendments.
For Clinic Treatment Facilities (amendments to section 679.6). As of January 2008, OMRDD certified Clinic Treatment facilities were providing services to approximately 30,000 individuals statewide. The proposed amendments establish fee schedules which include a COLA of 3.2 percent on the operating portion of allowed reimbursement for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. OMRDD anticipates that all eligible providers will avail themselves of this increase. The estimated total cost for implementation of this COLA on an aggregate annualized basis is approximately $2.16 million for the period beginning April 1, 2008. This represents approximately $1.08 million in State share and $1.08 million in federal funds. There are no costs to local governments as a result of the amendments.
For Day Treatment facilities serving persons with developmental disabilities (amendments to section 690.7). As of January 2008, OMRDD certified Day Treatment facilities were serving approximately 3,500 persons statewide. The proposed amendments implement a trend factor of 3.2 percent on the operating portion of allowed reimbursement for expenditures related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. OMRDD anticipates that all eligible providers will avail themselves of this increase. The aggregate cost of this trend factor for day treatment facilities is approximately $804,000. This represents approximately $402,000 in State share and $402,000 in federal government funding. There will be no additional costs to local governments as a result of these trend factor amendments.
In all instances, these estimated cost impacts have been derived by applying the COLA and trend factor provisions of the proposed amendments within the context of the respective reimbursement methodologies to the providers of services certified or authorized as of January 2008.
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 proposed amendments are necessary to maintain funding of the above cited facilities at revised levels of reimbursement in effect as of August 1, 2008. Since the amendments provide for COLA and trend factor increases to the providers of the various facilities and services, the amendments will result in increased funding to provider agencies.
There will be some minor administrative effort involved in the submission of the required Letters of Attestation signed by the Executive Director and President or equivalent of the governing body for those providers required to do so. Consistent with the requirements of Chapter 57 of the Laws of 2006 and Chapter 58 of the Laws of 2008, these letters are to attest that the COLA is or was used for the purposes of promoting recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. The letters must detail how the COLA or trend factor is to be or was expended.
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: As discussed above, there will be some paperwork associated with the preparation and forwarding of the required Letters of Attestation signed by the Executive Director and President or equivalent of the governing body if the participating provider had not already prepared one last year.
7. Duplication: The 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 COLAs and trend factors were considered.
9. Federal Standards: The proposed amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance Schedule: The proposed regulations have been filed to achieve a August 1, 2008 effective date consistent with time frames set forth in the State Administrative Procedure Act (SAPA). The proposed amendments are concerned with revising the various reimbursement methodologies to implement COLA and trend factor adjustments for facilities and providers of services to persons with developmental disabilities. The amendments do not impose any significant new requirements with which regulated parties are expected to comply since similar Letter of Attestation or Board Resolution requirements have, in the past, been associated with such COLA and trend factor provisions. For some providers there will be a minimal compliance effort associated with the preparation and forwarding of the previously discussed Letters of Attestation, but this will be more than offset by the benefits.
Regulatory Flexibility Analysis
1. Effect on small business: These 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:
Home and Community-based (HCBS) Waiver Community Residential Habilitation Services (amendments to section 671.7). Currently, OMRDD funds voluntary operated community residence facilities which were serving approximately 490 persons as of January 2008.
Clinic Treatment facilities serving persons with developmental disabilities in New York State (amendments to section 679.6). As of January 2008, OMRDD certified Clinic Treatment facilities were providing services to approximately 30,000 persons.
Day Treatment Facilities for Persons with Developmental Disabilities (amendments to section 690.7). As of January 2008, OMRDD certified Day Treatment facilities were providing services to approximately 3,500 persons.
The OMRDD has determined, through a review of the certified cost reports, that most of 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.
The 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 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 amendments will provide for increased reimbursements to small business providers of services, due to the application of the COLAs and trend factor 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.
The increased funding in the COLA and trend factor adjustments must be used by providers for purposes related to the promotion of recruitment and retention of staff or to respond to other critical non-personal service costs during the period of April 1, 2008 through March 31, 2009. As discussed in the Regulatory Impact Statement, for some providers there will be a minimal administrative effort involved in the submission of the required Letters of Attestation signed by the Executive Director and President or equivalent of the governing body of eligible facilities. These requirements will be kept to a minimum, consistent with Chapter 57 of the Laws of 2006 and Chapter 58 of the Laws of 2008.
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 significant additional compliance requirements for small businesses or local governments resulting from the implementation of these amendments. For eligible facilities which did not participate in the previous year's COLA or trend factor, there will be some minor administrative effort involved in the submission of the required Letters of Attestation signed by the Executive Director and President or equivalent of the governing body. Chapter 57 of the Laws of 2006 requires that these letters are to attest that the COLA or trend factor is used for the purposes of promoting recruitment and retention of staff or to respond to other critical non-personal service costs for the period of April 1, 2008 through March 31, 2009. The letters must detail how the COLA or trend factor is to be or was expended. These requirements will be kept to a minimum, consistent with Chapter 57 of the Laws of 2006 and Chapter 58 of the Laws of 2008.
Since this minimal compliance effort will be required of only a very small number of small business providers, OMRDD does not, at this time, contemplate, or see the need for, the development of a small business regulation guide as provided for by new section 102-a of the State Administrative Procedure Act. OMRDD will assist those few providers that need to submit the required Letters of Attestation.
3. Professional services: In accordance with existing practice, providers are required to submit annual cost reports by certified accountants. The amendments do not alter this requirement. Therefore, no additional professional services are required as a result 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 amendments.
5. Economic and technological feasibility: The 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 economic impact: The purpose of these amendments is to allow OMRDD to reimburse providers of the referenced facilities and services at revised levels as of April 1, 2008. Specifically, these amendments establish trend factor and COLA adjustments of 3.2 percent on the operating portion of allowed reimbursement of the referenced facilities or services for the period beginning April 1, 2008 through March 31, 2009. The trend factor and COLA provisions will have positive impacts resulting from increased reimbursements to the providers.
The amendments will have no fiscal impact on local governments due to the implementation of the 3.2 percent COLA and trend factor provisions. 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, 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.
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. OMRDD has scheduled public hearings to be held on June 30, 2008 and July 1, 2008 according to the information provided in the Notice of Proposed 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). The amendments themselves only increase funding for providers regardless of location. Also, the Community Residence and Day Treatment 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.
As discussed in the Regulatory Impact Statement, there will be some minor administrative effort involved in the submission of the required Letters of Attestation signed by the Executive Director and President or equivalent of the governing body for some facilities. These requirements will be kept to a minimum, consistent with Chapter 57 of the Laws of 2006 and Chapter 58 of the Laws of 2008, and will be greatly offset by the benefits of the additional funding resulting from the trend factor and COLA increases.
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 are primarily concerned with establishing trend factor and cost of living adjustments (COLA) to be applied within the context of reimbursement methodologies for the affected program and services. They will not have any adverse impacts. Consistent with Chapter 57 of the Laws of 2006 and Chapter 58 of the Laws of 2008, the trend factor and COLA increases are primarily intended to be used for expenditures related to the promotion of recruitment and retention of staff. Therefore, it is reasonable to expect that the amendments will have a positive impact on jobs or employment opportunities in New York State.
