OMH-34-11-00017-P Implementation of 1.1% Medicaid Fee Reductions for Operating Rates of Continuing Day Treatment Programs

8/24/11 N.Y. St. Reg. OMH-34-11-00017-P

NEW YORK STATE REGISTER

VOLUME XXXIII, ISSUE 34

August 24, 2011

RULE MAKING ACTIVITIES

OFFICE OF MENTAL HEALTH

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. OMH-34-11-00017-P

Implementation of 1.1% Medicaid Fee Reductions for Operating Rates of Continuing Day Treatment Programs

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of Part 588 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 7.09, 43.01 and 43.02

Subject:

Implementation of 1.1% Medicaid fee reductions for operating rates of Continuing Day Treatment Programs.

Purpose:

To reduce rates for Continuing Day Treatment Programs consistent with the 2011-2012 enacted State budget.

Text of proposed rule:

1. Paragraph (4) of subdivision (a) of section 588.13 of Title 14 NYCRR is repealed and paragraph (5) is renumbered and amended to read as follows:

[(5)] (4) Reimbursement under the medical assistance program for non-state operated continuing day treatment programs licensed solely pursuant to article 31 of the Mental Hygiene Law, and Part 587 of this Title for services provided on or after [July 1, 2010] April 1, 2011, shall be in accordance with the following fee schedule. The reimbursement for any regular visit shall be based upon the cumulative number of program hours provided in a calendar month to an individual recipient, excluding time spent in meals, adding two hours for each half-day visit and four hours for each full-day visit. Collateral, group collateral pre-admission and crisis visits will be reimbursed at the half-day rate for program hours 1- 40 regardless of the cumulative total of hours for regular visits in that month. Collateral, group collateral, pre-admission and crisis visits shall not be included in the calculation of the cumulative total hours in the program for a recipient. When the program hours of any single visit include more than one rate, the provider of service shall be reimbursed at the rate that applies to the first hour of such visit. Regular visits shall be reimbursed on the basis of program attendance and service provision as set forth in section 588.7 of this Part. The rates of reimbursement are as follows:

(i) For programs operated in Bronx, Kings, New York, Queens, Richmond, Nassau, Suffolk, Putnam, Rockland and Westchester counties:

Program hours 1-40 $[62.70]62.01 full day (4 hours)

Program hours 1-40 $[31.35]31.01 half day (2 hours)

Program hours 41-64 $[47.03]46.51 full day (4 hours)

Program hours 41-64 $[23.52]23.26 half day (2 hours)

Program hours 65+ $[34.65]34.27 full day (4 hours)

Program hours 65+ $[17.33]17.14 half day (2 hours)

Collateral $31.01

Group Collateral $31.01

Crisis $31.01

Pre-Admission $31.01

(ii) For programs operated in Allegany, Cattaraugus, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Niagara, Ontario, Orleans, Schuyler, Seneca, Steuben, Tompkins, Wayne, Wyoming and Yates counties:

Program hours 1-40 $[56.43]55.81 full day (4 hours)

Program hours 1-40 $[28.22]27.91 half day (2 hours)

Program hours 41-64 $[47.03]46.51 full day (4 hours)

Program hours 41-64 $[23.52]23.26 half day (2 hours)

Program hours 65+ $[34.65]34.27 full day (4 hours)

Program hours 65+ $[17.33]17.14 half day (2 hours)

Collateral $27.91

Group Collateral $27.91

Crisis $27.91

Pre-Admission $27.91

(iii) For programs operated in Broome, Cayuga, Chenango, Clinton, Cortland, Delaware, Essex, Franklin, Fulton, Hamilton, Herkimer, Jefferson, Lewis, Madison, Montgomery, Oneida, Onondaga, Oswego, Otsego, St. Lawrence, Tioga, Albany, Columbia, Dutchess, Greene, Orange, Rensselaer, Saratoga, Schenectady, Schoharie, Sullivan, Ulster, Warren and Washington counties:

Program hours 1-40 $[55.39]54.78 full day (4 hours)

Program hours 1-40 $[27.70]27.40 half day (2 hours)

Program hours 41-64 $[47.03]46.51 full day (4 hours)

Program hours 41-64 $[23.52]23.26 half day (2 hours)

Program hours 65+ $[34.65]34.27 full day (4 hours)

Program hours 65+ $[17.33]17.14 half day (2 hours)

Collateral $27.40

Group Collateral $27.40

Crisis $27.40

Pre-Admission $27.40

2. Subdivision (b) of Section 588.13 is amended to read as follows:

(b) Reimbursement under the medical assistance program for non-State operated continuing day treatment programs licensed pursuant to Article 31 of the Mental Hygiene Law and operated by agencies licensed pursuant to Article 28 of the Public Health Law, and Part 587 of this Title shall be in accordance with the following fee schedule:

(1) [For services provided on or after January 1, 2009, and prior to April 1, 2009, the fee shall be $51.05 for a visit.

(2)] For services provided on or after [April 1, 2009] April 1, 2011, the reimbursement for any regular visit shall be based upon the cumulative number of program hours provided in a calendar month for an individual recipient, excluding time spent in meals, adding two hours for each half-day visit and four hours for each full-day visit. Collateral, group collateral, pre-admission and crisis visits will be reimbursed at the half-day rate for program hours 1-40 regardless of the cumulative total of hours for regular visits in that month. Collateral, group collateral, pre-admission and crisis visits shall not be included in the calculation of the cumulative total hours in the program for a recipient. When the program hours of any single visit include more than one rate, the provider of service shall be reimbursed at the rate that applies to the first hour of such visit. Regular visits shall be reimbursed on the basis of program attendance and program provision as set forth in section 588.7 of this Part. The rates of reimbursement are as follows:

Program hours 1-40 $[62.70]62.01 full day (4 hours)

Program hours 1-40 $[42.01]41.55 half day (2 hours)

Program hours 41+ $[47.03]46.51 full day (4 hours)

Program hours 41+ $[31.51]31.16 half day (2 hours)

Collateral $41.55

Group Collateral $41.55

Crisis $41.55

Pre-Admission $41.55

[(3)] (2) For amounts paid under [paragraph (1) or (2)] this subdivision:

(i) There shall be added an allowance for the cost of capital, which shall be determined by the application of the principles of cost-finding for the Medicare program. No capital expenditure for which approval by the Office is required under the applicable provisions of the Mental Hygiene Law or Part 551 of this Title shall be included in allowable capital costs for purposes of rate computation unless such approval has been secured.

(ii) Allowable capital expenditures shall not include costs specifically excluded pursuant to Section 2807-c of the Public Health Law.

(iii) The capital payment per visit for a provider's continuing day treatment programs shall be determined by dividing all allowable capital costs of the provider's licensed outpatient mental health clinic, day treatment, and continuing day treatment, after deducting any exclusions, by the sum of the total number of visits for such programs.

Text of proposed rule and any required statements and analyses may be obtained from:

Joyce Donohue, NYS Office of Mental Health, 44 Holland Avenue, Albany, NY 12229, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory authority: Section 7.09 of the Mental Hygiene Law grants the Commissioner of the Office of Mental Health the authority and responsibility to adopt regulations that are necessary and proper to implement matters under his or her jurisdiction.

Section 43.01 of the Mental Hygiene Law gives the Commissioner of Mental Health the authority to set rates for outpatient services at facilities operated by the Office of Mental Health.

Section 43.02 of the Mental Hygiene Law provides that payments under the Medical Assistance Programs for services at facilities licensed by the Office of Mental Health shall be at rates certified by the Commissioner of Mental Health and approved by the Director of Budget.

2. Legislative objectives: Articles 7 and 31 of the Mental Hygiene Law reflect the Commissioner’s authority to establish regulations regarding mental health programs. The amendments to 14 NYCRR Part 588 are being made in accordance with the 2011-2012 enacted State Budget (Chapter 59 of the Laws of 2011).

3. Needs and benefits: The amendments to Part 588 are necessary to implement Medicaid fee reductions for the operating rate of Continuing Day Treatment (CDT) Programs that are licensed pursuant to Article 31 of the Mental Hygiene Law and operated by agencies licensed pursuant to Article 28 of the Public Health Law, as well as to reduce the Medicaid fee for CDT Programs licensed solely under Article 31 of the Mental Hygiene Law. These amendments are required to implement a continuation of the 1.1% reduction to Medicaid, as required by the enacted State budget. These rate decreases have been approved by the Director of the Division of the Budget and are effective as of April 1, 2011.

4. Costs:

a) Costs to state government: These regulatory amendments will not result in any additional costs to State government. It is estimated that the total savings to the State share of Medicaid will be $266,431.

b) Costs to local government: These regulatory amendments will not result in any additional costs to local government other than in their status as a provider of mental health services. Such costs are addressed under 4(c) "Costs to regulated parties".

c) Costs to regulated parties: These regulatory amendments will not result in any additional costs to regulated parties, but will reduce the rates paid under the Medical Assistance Program for CDT programs. Currently there are a total of 82 CDT Programs, nine of which are county-operated. It is estimated that the full annual State share impact of this rate cut is $266,431, resulting in total Medicaid reduction of $532,862.

5. Local government mandates: These regulatory amendments will not result in any additional imposition of duties or responsibilities upon county, city, town, village, school or fire districts.

6. Paperwork: This rule should not increase the paperwork requirements of affected providers.

7. Duplication: These regulatory amendments do not duplicate existing State or federal requirements.

8. Alternatives: As noted above, this amendment is consistent with the 2011-2012 enacted State budget. The reduction in rates for the CDT programs is part of a continuation of the 1.1% reduction in State Medicaid expenditures for mental health programs, and reflects the serious fiscal condition of the State. The only alternative to the regulatory amendment would be to make further budgetary cuts to other programs which would have the potential to put those providers at financial risk. Therefore, that alternative was not considered.

9. Federal standards: The regulatory amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance schedule: These regulatory amendments are effective immediately. The rate adjustment is considered effective as of April 1, 2011.

Regulatory Flexibility Analysis

1. Effect of rule: Currently there are a total of 82 OMH-licensed Continuing Day Treatment (CDT) programs, nine of which are county operated. Counties have three major roles with regard to mental health services - oversight, administration of state and county funding, and direct service delivery. Their role as a local governmental unit gives them responsibility for the oversight of their county mental health system, coordination with other county health, human services and legal systems and planning for county-wide mental health needs. Many counties also choose to fund and/or directly provide community mental health services. County roles must be separated in order to determine the financial impact of these proposed new clinic regulations.

- Counties as Local Governmental Units. There is no financial impact as this regulation does not impact state aid grants.

- Counties as funders of mental health services. There is no financial impact (for the same reason as noted above). The county share of Medicaid is capped, so any increase in overall costs would not be borne by the counties.

- Counties as providers. Counties can choose to operate licensed outpatient mental health programs, including CDTs. The rule is needed to implement the 1.1% reduction in State Medicaid expenditures for mental health programs, including CDTs. The estimated full annual State share of the impact of this rate cut is $266,431. Of that amount $27,029 will be borne by the nine county-run providers.

2. Compliance requirements: There will be no additional recordkeeping or compliance requirements as a result of this rulemaking.

3. Professional services: There will be no professional services required as a result of this rulemaking.

4. Compliance costs: As stated above, the expected cost to county-run CDT providers is $27,029 (State share).

5. Economic and technological feasibility: There will be no additional costs related to economic and technological feasibility as a result of this rulemaking.

6. Minimizing adverse impact: The reduction in rates for these non-State operated programs is a continuation of the 1.1% reduction in State Medicaid expenditures for mental health programs. These proposed changes are consistent with the 2011-2012 enacted State budget and reflect the serious fiscal condition of the State.

7. Small business and local government participation: The counties are well aware of the fiscal condition of the State and the impact of the enacted State budget. Briefing documents have been made available to the counties, and formal letters will be mailed to all CDT providers in early August.

Rural Area Flexibility Analysis

A Rural Area Flexibility Analysis is not submitted with this notice because the rulemaking, which serves to implement a Medicaid fee reduction of the operating rate of Continuing Day Treatment (CDT) Programs will not impose any adverse economic impact on rural areas. The reduction in rates for the CDT programs is part of a continuation of the 1.1% reduction in State Medicaid expenditures for mental health programs. These proposed changes are consistent with the 2011-2012 enacted State budget and reflect the serious fiscal condition of the State.

Job Impact Statement

A Job Impact Statement is not submitted with this notice because the rulemaking, which serves to implement a Medicaid fee reduction of the operating rate of Continuing Day Treatment (CDT) Programs will have no impact upon jobs and employment opportunities. The reduction in rates for the CDT programs is part of a continuation of the 1.1% reduction in State Medicaid expenditures for mental health programs. These proposed changes are consistent with the 2011-2012 enacted State budget and reflect the serious fiscal condition of the State.