Home » 2014 Issues » July 16, 2014 » PDD-28-14-00019-E Rate Setting for Non-State Providers—IRA/CR Residential Habilitation and Day Habilitation
PDD-28-14-00019-E Rate Setting for Non-State Providers—IRA/CR Residential Habilitation and Day Habilitation
7/16/14 N.Y. St. Reg. PDD-28-14-00019-E
NEW YORK STATE REGISTER
VOLUME XXXVI, ISSUE 28
July 16, 2014
RULE MAKING ACTIVITIES
OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES
EMERGENCY RULE MAKING
I.D No. PDD-28-14-00019-E
Filing No. 575
Filing Date. Jul. 01, 2014
Effective Date. Jul. 01, 2014
Rate Setting for Non-State Providers—IRA/CR Residential Habilitation and Day Habilitation
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of Part 641 to Title 14 NYCRR.
Statutory authority:
Mental Hygiene Law, sections 13.09(b) and 43.02
Finding of necessity for emergency rule:
Preservation of public health, public safety and general welfare.
Specific reasons underlying the finding of necessity:
The emergency adoption of these amendments is necessary to protect the health, safety and general welfare of individuals receiving services in the OPWDD system. Working with the Federal government to transform its service delivery system, OPWDD made a number of commitments to the Centers for Medicare and Medicaid Services (CMS) as outlined in a transformation agreement. Among these commitments was a change in methodology for specified OPWDD services. However, it was not possible to promulgate regulations that achieve the required July 1, 2014 effective date using the regular rulemaking process established by the State Administrative Procedure Act (SAPA). If OPWDD did not promulgate these regulations on an emergency basis, OPWDD would fail to meet its commitment to CMS and would risk loss of the substantial federal funding that is contingent on this commitment. The loss of this federal funding could jeopardize the health, safety, and welfare of individuals receiving services in the OPWDD system, as without it, individuals would be at risk of receiving services that are inadequate or insufficient in meeting their needs.
In addition, these regulations include a change in the unit of service from monthly to daily for residential habilitation delivered in supervised Individualized Residential Alternatives (IRAs) and supervised Community Residences (CRs). The old methodology required that providers deliver services on 11 days to receive reimbursement for a half month and 22 days to receive reimbursement for a full month. There was no mechanism in the old methodology for a provider to receive reimbursement for supervised residential habilitation delivered less than 11 days a month. The emergency regulations are therefore necessary to provide reimbursement for services delivered on July 1, 2014. Without these emergency regulations, providers would be unable to receive reimbursement for these services and would suffer the loss of significant revenue with potential adverse consequences on the health, safety and welfare of individuals receiving services.
Subject:
Rate Setting for Non-State Providers—IRA/CR residential habilitation and day habilitation.
Purpose:
To establish a new rate methodology effective July 1, 2014.
Substance of emergency rule:
This regulation establishes a new reimbursement methodology for Supervised and Supportive Individualized Residential Alternatives (IRAs) and Community Residences (CRs) and Day Habilitation programs which will be effective July 1, 2014.
The methodology for these programs will include the following elements:
1) The use of a base period Consolidated Fiscal Report (CFR) for the period of January 1, 2011 – December 31, 2011 for calendar year filers or the period of July 1, 2010 through June 30, 2011 for fiscal year filers.
2) The assignment of geographic location, based on CFR information and consistent with Department of Health regions.
3) Operating, facility and capital components. The operating component recognizes a blend of actual provider costs and average regional costs. The facility component recognizes actual provider costs. The methodology for the capital component has not been significantly changed from that of the previous reimbursement methodology. One adjustment to the methodology for the capital component is that initial reimbursement will only remain in the rate for two years from the date of site certification unless actual costs are verified with the Office for People With Developmental Disabilities. The other adjustment to the methodology is that the thresholds identified are the maximum allowable amounts and will not be exceeded for property approved by OPWDD on/or after July 1, 2014.
4) Wage Equalization factors.
5) A Budget Neutrality factor.
6) A three year phase-in period for transition to the methodology.
7) A new section is added governing funding for those individuals identified as qualifying for template or auspice funding. The funding for IRA/CR residential habilitation and day habilitation provided to these individuals will be determined in accordance with that section instead of the methodology that is generally applicable.
For Supervised and Supportive Community Residences (including IRAs) only, the methodology will include:
An acuity factor developed through a regression analysis and based on Developmental Disabilities Profile information.
For Supervised Community Residences (including IRAs) only, the methodology will incorporate:
1) A change in the unit of service from monthly to daily. Commensurate with that change, the methodology will recognize retainer days, therapeutic leave days and vacant bed days.
2) The recognition of an evacuation score factor.
For Day Habilitation programs only, the methodology will include:
The recognition of actual provider to-from transportation costs.
This notice is intended
to serve only as an emergency adoption, to be valid for 90 days or less. This rule expires September 28, 2014.
Text of rule and any required statements and analyses may be obtained from:
Regulatory Affairs Unit, Office for People With Developmental Disabilities, 44 Holland Ave., 3rd Floor, Albany, NY 12229, (518) 474-1830, email: RAU.Unit@opwdd.ny.gov
Additional matter required by statute:
Pursuant to the requirements of the State Environmental Quality Review Act, OPWDD, as lead agency, has determined that the action described will have no effect on the environment, and an E.I.S. is not needed.
Regulatory Impact Statement
1. Statutory authority:
a. OPWDD has the statutory 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).
b. OPWDD has the statutory responsibility for setting Medicaid rates and fees for other services in facilities licensed or operated by OPWDD as stated in section 43.02 of the Mental Hygiene Law.
2. Legislative objective: These emergency regulations further the legislative objectives embodied in sections 13.09(b) and 43.02 of the Mental Hygiene Law. The emergency regulations concern changes in the methodology for reimbursement of residential habilitation services delivered in Community Residences (CRs) and Individualized Residential Alternatives (IRAs), and for day habilitation services.
3. Needs and benefits: OPWDD and the Department of Health (DOH) are implementing a new reimbursement methodology, which complements existing OPWDD requirements concerning residential and day habilitation services, and satisfies commitments included in OPWDD's transformation agreement with the federal Centers for Medicare and Medicaid Services (CMS).
The methodology, which combines regional average cost components, provider specific cost experiences, and other factors, including the needs of individuals served, is expected to result in rates that are consistent with efficiency and economy and that lead to quality outcomes for individuals receiving services. The purpose of the methodology change is to move from budget to cost-based reimbursement, to provide a clear and transparent method of reimbursement, to move toward consistency in rates across the system, and to provide a more stable system of reimbursement.
OPWDD filed proposed regulations on this topic which are being finalized July 2, 2014. These regulations include a change in the unit of service from monthly to daily for residential habilitation delivered in supervised Individualized Residential Alternatives (IRAs) and Community Residences (CRs). The old methodology required that providers deliver services on 11 days to receive reimbursement for a half month and 22 days to receive reimbursement for a full month. There was no mechanism in the old methodology for a provider to receive reimbursement for supervised residential habilitation delivered less than 11 days a month. The emergency regulations are therefore necessary to provide reimbursement for services delivered on July 1, 2014. Without these emergency regulations, providers would be unable to receive reimbursement for these services and would suffer the loss of significant revenue with potential adverse consequences for individuals receiving services.
In addition, the reimbursement of residential habilitation in supportive IRAs and supportive CRs would be unnecessarily complicated by having the old methodology apply for some of the month of July and the new methodology apply for the rest of the month. Reimbursement for this service in the old and new methodology is on a monthly basis.
Furthermore, OPWDD’s commitment with CMS was that the new methodology would become effective July 1, 2014. If OPWDD did not promulgate these regulations on an emergency basis, OPWDD would fail to meet its commitment to CMS and would risk loss of the substantial federal funding that is contingent on this commitment.
4. Costs:
a. Costs to the Agency and to the State and its local governments: The emergency regulation will result in the expenditure of $5.2 million of Medicaid funds for reimbursement of residential habilitation in supervised IRAs and supervised CRs for the reason noted above. The state share of these Medicaid costs is $2.6 million. The change in methodology for residential habilitation in supportive IRAs and supportive CRs and day habilitation will result in increased rates for some non-state providers and decreased rates for other non-state providers. However, there will be no change in the aggregate rates.
The new methodologies do not apply to the state as a provider of services.
There will be no savings or costs to local governments as a result of these regulations because pursuant to Social Services Law sections 365 and 368-a, either local governments incur no costs for these services or the State reimburses local governments for their share of the cost of Medicaid funded programs and services. In addition, even if the amendments lead to an increase in Medicaid expenditures in a particular county, these amendments will not have any fiscal impact on local governments, as the contribution of local governments to Medicaid has been capped. Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs and local governments are already paying for Medicaid at the capped level.
b. Costs to private regulated parties: The emergency regulation will implement a new reimbursement methodology for residential habilitation delivered in IRAs and CRs and day habilitation. Application of the new methodology is expected to result in increased rates for some non-state operated providers and decreased rates for others. However, overall reimbursement to providers will not be changed. In addition, the emergency regulation will enable providers of residential habilitation in supervised IRAs and supervised CRs to receive reimbursement for services delivered on July 1, 2014 which would otherwise not be reimbursed. This will result in additional revenues to providers of $5.2 million.
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: The emergency amendments will require additional paperwork to be completed by providers of residential habilitation in supervised IRAs and supervised CRs. In order to receive reimbursement for July 1, 2014, providers will need to document the delivery of services on that date and bill for the reimbursement. In addition, the regulations require that providers determine and report retainer days, therapeutic leave days, and vacant bed days for residential habilitation delivered in supervised IRAs and supervised CRs.
7. Duplication: The emergency regulations do not duplicate any existing State or federal requirements that are applicable to services for persons with developmental disabilities.
8. Alternatives: There is no viable alternative to the promulgation of these emergency regulations as it is necessary to reimburse providers for the delivery of residential habilitation in supervised IRAs and supervised CRs.
9. Federal standards: The emergency amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance schedule: The emergency regulations are effective July 1, 2014 only. OPWDD has finalized similar proposed regulations effective July 2, 2014 and has filed an emergency/proposed regulation to amend the finalized regulations on the same date (July 2). The text of the regulations, as amended by the emergency/proposed amendments, is the same as these emergency regulations, so that the implementation of the new methodology effective July 1 is designed to be seamless. All necessary information, training, and guidance regarding the new service documentation requirements and billing procedures have been provided to agencies in advance of the effective date of the emergency regulations. The provider training explained all components, and provisions of the new methodology implemented by these regulations.
Regulatory Flexibility Analysis
1. Effect on small business: OPWDD has determined, through a review of the certified cost reports, that most residential habilitation services delivered in Individualized Residential Alternatives (IRAs) and Community Residences (CRs) and most day habilitation services are provided by agencies that employ more than 100 people overall. However, some smaller agencies that employ fewer than 100 employees overall would be classified as small businesses. Currently, there are 348 providers of residential habilitation services delivered in IRAs and CRs and day habilitation services. Of these, 266 providers deliver residential habilitation in supervised IRAs and CRs (which are most affected by these emergency regulations). OPWDD is unable to estimate the portion of these providers that may be considered to be small businesses.
The emergency regulations concern changes in the methodology for reimbursement of residential habilitation services delivered in IRAs and CRs, and for day habilitation services. The methodology, which combines regional average cost components, provider specific cost experiences, and other factors, including the needs of individuals served, is expected to result in rates that are economic and efficient and that lead to quality outcomes for individuals receiving services. Application of the new methodology is expected to result in increased rates for some non-state operated providers and decreased rates for others. The overall reimbursement to providers will not change.
OPWDD filed proposed regulations on this topic which are being finalized July 2, 2014. These regulations include a change in the unit of service from monthly to daily for residential habilitation delivered in supervised Individualized Residential Alternatives (IRAs) and Community Residences (CRs). The old methodology required that providers deliver services on 11 days to receive reimbursement for a half month and 22 days to receive reimbursement for a full month. There was no mechanism in the old methodology for a provider to receive reimbursement for supervised residential habilitation delivered less than 11 days a month. The emergency regulations are therefore necessary to provide reimbursement for services delivered on July 1, 2014. Without these emergency regulations, providers would be unable to receive reimbursement for these services and would suffer the loss of significant revenue with potential adverse consequences for individuals receiving services.
For supportive IRAs and CRs and day habilitation, some providers will experience a reduction in reimbursement as a result of the promulgation of the new rate methodology contained in this regulation. OPWDD expects that the adverse economic impact of receiving reimbursement at a decreased rate for services delivered on a single day will be minor. Other providers will experience an increase in reimbursement, with the overall effect being budget neutral.
Finally, these amendments do not impose any requirements on local governments, and (as noted in the Regulatory Impact Statement) have no fiscal impact on local governments.
2. Compliance requirements: The emergency regulations change the unit of service for residential habilitation in supervised IRAs and supervised CRs from a monthly to a daily unit of service, effective July 1, 2014. As noted, in order to receive reimbursement for services delivered on July 1, 2014, providers will need to document and bill for these services. In addition, providers must also determine and report retainer days, therapeutic leave days, and vacant bed days.
3. Professional services: No additional professional services will be required as a result of these regulations and the regulations will not add to the professional service needs of local governments.
4. Compliance costs: As noted, the emergency regulations facilitate the reimbursement of residential habilitation in supervised CRs and supervised IRAs for services delivered on July 1, 2014. Providers will need to submit bills to receive this reimbursement. The costs incurred are minimal for billing for this single day of service.
5. Economic and technological feasibility: The proposed amendments do not impose on regulated parties the use of any new technological processes.
6. Minimizing adverse economic impact: The emergency regulations are primarily concerned with providing a mechanism for reimbursement of residential habilitation delivered in supervised IRAs and supervised CRs on July 1, 2014. Without these emergency regulations, providers would not be able to receive reimbursement for these services. Therefore, these regulations have a positive economic impact on providers of these services. For providers of residential habilitation in supportive IRAs and CRs and day habilitation some providers will experience an increase in rates and others will experience a decrease in rates. The adverse economic impact of any reduction in rates for the one day period covered by these regulations will be minor.
OPWDD has also reviewed and considered the approaches for minimizing adverse economic impact as suggested in section 202-b(1) of the State Administrative Procedure Act. OPWDD determined that the revision to reimbursement in this amendment is the most optimal approach to providing the necessary reimbursement for residential habilitation in supervised IRAs and CRs for this one day period and for instituting the necessary change in rate methodology while minimizing any adverse impact on providers.
OPWDD considers that the minimal compliance activities associated with billing for residential habilitation delivered in IRAs and CRs for July 1, 2014 are appropriate and cannot be further minimized.
As noted above, some providers will experience a decrease in reimbursement because of this regulation. However, the adverse economic impact of decreased rates for a single day of service will be minor.
As noted in the emergency justification, without the promulgation of these emergency regulations OPWDD risks the loss of significant federal funding, which would result in a significant adverse economic impact on providers of services.
7. Small business participation: OPWDD and DOH met with representatives of providers to discuss the new methodology (including provider concerns) at numerous meetings beginning in August 2013, including the New York State Association of Community and Residential Agencies (NYSACRA) (which represents some providers that have fewer than 100 employees). OPWDD and DOH posted material about the original proposed regulations on the respective agencies’ websites, and OWPDD notified all providers affected by proposed regulation of the materials posted. In addition, OPWDD and DOH conducted six training sessions for providers by videoconference throughout NYS during April-May 2014. DOH sent each provider affected by the new methodology the rate sheet and documents that described the impact of the new methodology on the specific provider. OPWDD and DOH received public comments on the original regulations and answered numerous questions. OPWDD is also posting materials about the new methodology on its website and is notifying all affected providers about the availability of these materials.
Rural Area Flexibility Analysis
1. Description of the types and estimation of the number of rural areas in which the rule will apply: OPWDD services are provided in every county in New York State. 43 counties have a population of less than 200,000: Allegany, Cattaraugus, Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Cortland, Delaware, Essex, Franklin, Fulton, Genesee, Greene, Hamilton, Herkimer, Jefferson, Lewis, Livingston, Madison, Montgomery, Ontario, Orleans, Oswego, Otsego, Putnam, Rensselaer, St. Lawrence, Schenectady, Schoharie, Schuyler, Seneca, Steuben, Sullivan, Tioga, Tompkins, Ulster, Warren, Washington, Wayne, Wyoming and Yates. Additionally, certain townships in 10 other counties have a population density of 150 persons or less per square mile: Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, and Saratoga.
The emergency regulations concern changes in the methodology for reimbursement of residential habilitation services delivered in IRAs and CRs, and for day habilitation services, including services delivered in rural areas. The methodology, which combines regional average cost components, provider specific cost experiences, and other factors, including the needs of individuals served, is expected to result in rates that are economic and efficient and that lead to quality outcomes for individuals receiving services. Application of the new methodology is expected to result in increased rates for some non-state operated providers and decreased rates for others. The overall reimbursement to providers will not change.
OPWDD filed proposed regulations on this topic which are being finalized July 2, 2014. These regulations include a change in the unit of service from monthly to daily for residential habilitation delivered in supervised Individualized Residential Alternatives (IRAs) and Community Residences (CRs). The old methodology required that providers deliver services on 11 days to receive reimbursement for a half month and 22 days to receive reimbursement for a full month. There was no mechanism in the old methodology for a provider to receive reimbursement for supervised residential habilitation delivered less than 11 days a month. The emergency regulations are therefore necessary to provide reimbursement for services delivered on July 1, 2014. Without these emergency regulations, providers would be unable to receive reimbursement for these services and would suffer the loss of significant revenue with potential adverse consequences for individuals receiving services.
For supportive IRAs and CRs and day habilitation, some providers will experience a reduction in reimbursement as a result of the promulgation of the new rate methodology contained in this regulation. OPWDD expects that the adverse economic impact of receiving reimbursement at a decreased rate for services delivered on a single day will be minor. Other providers will experience an increase in reimbursement, with the overall effect being budget neutral.
Finally, these amendments do not impose any requirements on local governments, and (as noted in the Regulatory Impact Statement) have no fiscal impact on local governments, including local governments in rural areas.
2. Compliance requirements: The emergency regulations change the unit of service for residential habilitation in supervised IRAs and supervised CRs from a monthly to a daily unit of service, effective July 1, 2014. As noted, in order to receive reimbursement for services delivered on July 1, 2014, providers will need to document and bill for these services. In addition, providers must also determine and report retainer days, therapeutic leave days, and vacant bed days.
The amendments will have no effect on local governments.
3. Professional services: No additional professional services will be required as a result of these regulations and the regulations will not add to the professional service needs of local governments.
4. Compliance costs: As noted, the emergency regulations facilitate the reimbursement of residential habilitation in supervised CRs and supervised IRAs for services delivered on July 1, 2014. Providers will need to submit bills to receive this reimbursement. The costs incurred are minimal for billing for this single day of service.
5. Minimizing adverse impact: The emergency regulations are primarily concerned with providing a mechanism for reimbursement of residential habilitation delivered in supervised IRAs and supervised CRs on July 1, 2014, including services delivered in rural areas. Without these emergency regulations, providers would not be able to receive reimbursement for these services. Therefore, these regulations have a positive economic impact on providers of these services. For providers of residential habilitation in supportive IRAs and CRs and day habilitation some providers will experience an increase in rates and others will experience a decrease in rates. The adverse economic impact of any reduction in rates for the one day period covered by these regulations will be minor.
OPWDD has also reviewed and considered the approaches for minimizing adverse impact as suggested in section 202-bb(2)(b) of the State Administrative Procedure Act. OPWDD determined that the revision to reimbursement in this amendment is the most optimal approach to providing the necessary reimbursement for residential habilitation in supervised IRAs and CRs for this one day period and for instituting the necessary change in rate methodology while minimizing any adverse impact on providers.
OPWDD considers that the minimal compliance activities associated with billing for residential habilitation delivered in IRAs and CRs for July 1, 2014 are appropriate and cannot be further minimized.
As noted above, some providers will experience a decrease in reimbursement because of this regulation. However, the adverse economic impact of decreased rates for a single day of service will be minor.
As noted in the emergency justification, without the promulgation of these emergency regulations OPWDD risks the loss of significant federal funding, which would result in a significant adverse economic impact on providers of services.
6. Participation of public and private interests in rural areas: OPWDD and DOH met with representatives of providers to discuss the new methodology (including provider concerns) at numerous meetings beginning in August 2013, including providers in rural areas, such as NYSARC, the NYS Association of Community and Residential Agencies, NYS Catholic Conference, and CP Association of NYS. OPWDD and DOH posted material about the original proposed regulations on the respective agencies’ websites, and OWPDD notified all providers affected by the proposed regulation of the materials posted. In addition, OPWDD and DOH conducted six training sessions for providers by videoconference throughout NYS during April-May 2014. DOH sent each provider affected by the new methodology the rate sheet and documents that described the impact of the new methodology on the specific provider. OPWDD and DOH received public comments on the original regulations and answered numerous questions. OPWDD is also posting materials about the new methodology on its website and is notifying all affected providers about the availability of these materials.
Job Impact Statement
A job impact statement is not being submitted for these emergency amendments because OPWDD determined that they will not cause a loss of more than 100 full time annual jobs State wide. The emergency regulations will implement a new reimbursement methodology for residential habilitation delivered in CRs and IRAs and day habilitation. Application of the new methodology is expected to result in increased rates for some non-state operated providers and decreased rates for others. However, overall reimbursement to providers will not be changed. Further, the changes in the emergency regulations are only effective for a single day.
Because these regulations only affect the reimbursement of services delivered on July 1, 2014, the minor decrease in reimbursement experienced by some providers will not have an impact on jobs or employment opportunities.
In addition, as noted in the Regulatory Impact Statement, the emergency regulation will enable providers of residential habilitation in supervised IRAs and CRs to receive reimbursement for services delivered prior to the permanent regulations becoming effective. Without these emergency regulations, providers would not be able to receive reimbursement for services delivered on July 1, 2014. Without the additional reimbursement available because of these amendments, providers may have had to reduce staff to accommodate the loss of revenue.
Therefore, OPWDD expects that there will be a small positive effect or no overall effect on jobs and employment opportunities as a result of these amendments.
