Bill Text: OH SB283 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To revise the types of costs included in determining nursing facilities' Medicaid reimbursement rates.

Spectrum: Slight Partisan Bill (Democrat 10-4)

Status: (Introduced - Dead) 2010-07-01 - To Finance & Financial Institutions [SB283 Detail]

Download: Ohio-2009-SB283-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

S. B. No. 283

Senators Morano, Stewart 

Cosponsors: Senators Miller, D., Kearney, Turner, Cafaro, Miller, R., Fedor, Sawyer, Schuring, Strahorn, Smith, Wagoner, Grendell 

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A BILL

To amend section 5111.20 of the Revised Code to

1

revise the types of costs included in determining

2

nursing facilities' Medicaid reimbursement rates.

3

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 5111.20 of the Revised Code be	4
amended to read as follows:	5

Sec. 5111.20.  As used in sections 5111.20 to 5111.34 of the	6
Revised Code:	7

(A) "Allowable costs" are those costs determined by the	8
department of job and family services to be reasonable and do not	9
include fines paid under sections 5111.35 to 5111.61 and section	10
5111.99 of the Revised Code.	11

(B) "Ancillary and support costs" means all reasonable costs	12
incurred by a nursing facility other than direct care costs or	13
capital costs. "Ancillary and support costs" includes, but is not	14
limited to, costs of activities, social services, pharmacy	15
consultants, habilitation supervisors, qualified mental	16
retardation professionals, program directors, medical and	17
habilitation records, program supplies, incontinence supplies,	18
food, enterals, dietary supplies and personnel, laundry,	19
housekeeping, security, administration, medical equipment,	20
utilities, liability insurance, bookkeeping, purchasing	21
department, human resources, communications, travel, dues, license	22
fees, subscriptions, home office costs not otherwise allocated,	23
legal services, accounting services, minor equipment, wheelchairs,	24
resident transportation, maintenance and repairs, help-wanted	25
advertising, informational advertising, start-up costs,	26
organizational expenses, other interest, property insurance,	27
employee training and staff development, employee benefits,	28
payroll taxes, and workers' compensation premiums or costs for	29
self-insurance claims and related costs as specified in rules	30
adopted by the director of job and family services under section	31
5111.02 of the Revised Code, for personnel listed in this	32
division. "Ancillary and support costs" also means the cost of	33
equipment, including vehicles, acquired by operating lease	34
executed before December 1, 1992, if the costs are reported as	35
administrative and general costs on the facility's cost report for	36
the cost reporting period ending December 31, 1992.	37

(C) "Capital costs" means costs of ownership and, in the case	38
of an intermediate care facility for the mentally retarded, costs	39
of nonextensive renovation.	40

(1) "Cost of ownership" means the actual expense incurred for	41
all of the following:	42

(a) Depreciation and interest on any capital assets that cost	43
five hundred dollars or more per item, including the following:	44

(i) Buildings;

45

(ii) Building improvements that are not approved as	46
nonextensive renovations under section 5111.251 of the Revised	47
Code;	48

(iii) Except as provided in division (B) of this section,	49
equipment;	50

(iv) In the case of an intermediate care facility for the	51
mentally retarded, extensive renovations;	52

(v) Transportation equipment.

53

(b) Amortization and interest on land improvements and	54
leasehold improvements;	55

(c) Amortization of financing costs;

56

(d) Except as provided in division (K) of this section, lease	57
and rent of land, building, and equipment.	58

The costs of capital assets of less than five hundred dollars	59
per item may be considered capital costs in accordance with a	60
provider's practice.	61

(2) "Costs of nonextensive renovation" means the actual	62
expense incurred by an intermediate care facility for the mentally	63
retarded for depreciation or amortization and interest on	64
renovations that are not extensive renovations.	65

(D) "Capital lease" and "operating lease" shall be construed	66
in accordance with generally accepted accounting principles.	67

(E) "Case-mix score" means the measure determined under	68
section 5111.232 of the Revised Code of the relative direct-care	69
resources needed to provide care and habilitation to a resident of	70
a nursing facility or intermediate care facility for the mentally	71
retarded.	72

(F)(1) "Date of licensure," for a facility originally	73
licensed as a nursing home under Chapter 3721. of the Revised	74
Code, means the date specific beds were originally licensed as	75
nursing home beds under that chapter, regardless of whether they	76
were subsequently licensed as residential facility beds under	77
section 5123.19 of the Revised Code. For a facility originally	78
licensed as a residential facility under section 5123.19 of the	79
Revised Code, "date of licensure" means the date specific beds	80
were originally licensed as residential facility beds under that	81
section.	82

If nursing home beds licensed under Chapter 3721. of the	83
Revised Code or residential facility beds licensed under section	84
5123.19 of the Revised Code were not required by law to be	85
licensed when they were originally used to provide nursing home or	86
residential facility services, "date of licensure" means the date	87
the beds first were used to provide nursing home or residential	88
facility services, regardless of the date the present provider	89
obtained licensure.	90

If a facility adds nursing home beds or residential facility	91
beds or extensively renovates all or part of the facility after	92
its original date of licensure, it will have a different date of	93
licensure for the additional beds or extensively renovated portion	94
of the facility, unless the beds are added in a space that was	95
constructed at the same time as the previously licensed beds but	96
was not licensed under Chapter 3721. or section 5123.19 of the	97
Revised Code at that time.	98

(2) The definition of "date of licensure" in this section	99
applies in determinations of the medicaid reimbursement rate for a	100
nursing facility or intermediate care facility for the mentally	101
retarded but does not apply in determinations of the franchise	102
permit fee for a nursing facility or intermediate care facility	103
for the mentally retarded.	104

(G) "Desk-reviewed" means that costs as reported on a cost	105
report submitted under section 5111.26 of the Revised Code have	106
been subjected to a desk review under division (A) of section	107
5111.27 of the Revised Code and preliminarily determined to be	108
allowable costs.	109

(H) "Direct care costs" means all of the following:

110

(1)(a) Costs for registered nurses, licensed practical	111
nurses, and nurse aides employed by the facility;	112

(b) Costs for direct care staff, administrative nursing	113
staff, medical directors, respiratory therapists, and except as	114
provided in division (H)(2) of this section, other persons holding	115
degrees qualifying them to provide therapy;	116

(c) Costs of purchased nursing services;

117

(d) Costs of quality assurance;

118

(e) Costs of training and staff development, employee	119
benefits, payroll taxes, and workers' compensation premiums or	120
costs for self-insurance claims and related costs as specified in	121
rules adopted by the director of job and family services in	122
accordance with Chapter 119. of the Revised Code, for personnel	123
listed in divisions (H)(1)(a), (b), and (d) of this section;	124

(f) Costs of consulting and management fees related to direct	125
care;	126

(g) Allocated direct care home office costs.

127

(2) In addition to the costs specified in division (H)(1) of	128
this section, for nursing facilities only, direct care costs	129
include costs of habilitation staff (other than habilitation	130
supervisors), medical supplies, emergency oxygen, over-the-counter	131
pharmacy products, physical therapists, physical therapy	132
assistants, occupational therapists, occupational therapy	133
assistants, speech therapists, audiologists,prescription drugs,	134
habilitation supplies, and universal precautions supplies.	135

(3) In addition to the costs specified in division (H)(1) of	136
this section, for intermediate care facilities for the mentally	137
retarded only, direct care costs include both of the following:	138

(a) Costs for physical therapists and physical therapy	139
assistants, occupational therapists and occupational therapy	140
assistants, speech therapists, audiologists, habilitation staff	141
(including habilitation supervisors), qualified mental retardation	142
professionals, program directors, social services staff,	143
activities staff, off-site day programming, psychologists and	144
psychology assistants, and social workers and counselors;	145

(b) Costs of training and staff development, employee	146
benefits, payroll taxes, and workers' compensation premiums or	147
costs for self-insurance claims and related costs as specified in	148
rules adopted under section 5111.02 of the Revised Code, for	149
personnel listed in division (H)(3)(a) of this section.	150

(4) Costs of other direct-care resources that are specified	151
as direct care costs in rules adopted under section 5111.02 of the	152
Revised Code.	153

(I) "Fiscal year" means the fiscal year of this state, as	154
specified in section 9.34 of the Revised Code.	155

(J) "Franchise permit fee" means the following:

156

(1) In the context of nursing facilities, the fee imposed by	157
sections 3721.50 to 3721.58 of the Revised Code;	158

(2) In the context of intermediate care facilities for the	159
mentally retarded, the fee imposed by sections 5112.30 to 5112.39	160
of the Revised Code.	161

(K) "Indirect care costs" means all reasonable costs incurred	162
by an intermediate care facility for the mentally retarded other	163
than direct care costs, other protected costs, or capital costs.	164
"Indirect care costs" includes but is not limited to costs of	165
habilitation supplies, pharmacy consultants, medical and	166
habilitation records, program supplies, incontinence supplies,	167
food, enterals, dietary supplies and personnel, laundry,	168
housekeeping, security, administration, liability insurance,	169
bookkeeping, purchasing department, human resources,	170
communications, travel, dues, license fees, subscriptions, home	171
office costs not otherwise allocated, legal services, accounting	172
services, minor equipment, maintenance and repairs, help-wanted	173
advertising, informational advertising, start-up costs,	174
organizational expenses, other interest, property insurance,	175
employee training and staff development, employee benefits,	176
payroll taxes, and workers' compensation premiums or costs for	177
self-insurance claims and related costs as specified in rules	178
adopted under section 5111.02 of the Revised Code, for personnel	179
listed in this division. Notwithstanding division (C)(1) of this	180
section, "indirect care costs" also means the cost of equipment,	181
including vehicles, acquired by operating lease executed before	182
December 1, 1992, if the costs are reported as administrative and	183
general costs on the facility's cost report for the cost reporting	184
period ending December 31, 1992.	185

(L) "Inpatient days" means all days during which a resident,	186
regardless of payment source, occupies a bed in a nursing facility	187
or intermediate care facility for the mentally retarded that is	188
included in the facility's certified capacity under Title XIX.	189
Therapeutic or hospital leave days for which payment is made under	190
section 5111.33 of the Revised Code are considered inpatient days	191
proportionate to the percentage of the facility's per resident per	192
day rate paid for those days.	193

(M) "Intermediate care facility for the mentally retarded"	194
means an intermediate care facility for the mentally retarded	195
certified as in compliance with applicable standards for the	196
medicaid program by the director of health in accordance with	197
Title XIX.	198

(N) "Maintenance and repair expenses" means, except as	199
provided in division (BB)(2) of this section, expenditures that	200
are necessary and proper to maintain an asset in a normally	201
efficient working condition and that do not extend the useful life	202
of the asset two years or more. "Maintenance and repair expenses"	203
includes but is not limited to the cost of ordinary repairs such	204
as painting and wallpapering.	205

(O) "Medicaid days" means all days during which a resident	206
who is a Medicaidmedicaid recipient eligible for nursing facility	207
services occupies a bed in a nursing facility that is included in	208
the nursing facility's certified capacity under Title XIX.	209
Therapeutic or hospital leave days for which payment is made under	210
section 5111.33 of the Revised Code are considered Medicaid	211
medicaid days proportionate to the percentage of the nursing	212
facility's per resident per day rate paid for those days.	213

(P) "Nursing facility" means a facility, or a distinct part	214
of a facility, that is certified as a nursing facility by the	215
director of health in accordance with Title XIX and is not an	216
intermediate care facility for the mentally retarded. "Nursing	217
facility" includes a facility, or a distinct part of a facility,	218
that is certified as a nursing facility by the director of health	219
in accordance with Title XIX and is certified as a skilled nursing	220
facility by the director in accordance with Title XVIII.	221

(Q) "Operator" means the person or government entity	222
responsible for the daily operating and management decisions for a	223
nursing facility or intermediate care facility for the mentally	224
retarded.	225

(R) "Other protected costs" means costs incurred by an	226
intermediate care facility for the mentally retarded for medical	227
supplies; real estate, franchise, and property taxes; natural gas,	228
fuel oil, water, electricity, sewage, and refuse and hazardous	229
medical waste collection; allocated other protected home office	230
costs; and any additional costs defined as other protected costs	231
in rules adopted under section 5111.02 of the Revised Code.	232

(S)(1) "Owner" means any person or government entity that has	233
at least five per cent ownership or interest, either directly,	234
indirectly, or in any combination, in any of the following	235
regarding a nursing facility or intermediate care facility for the	236
mentally retarded:	237

(a) The land on which the facility is located;

238

(b) The structure in which the facility is located;

239

(c) Any mortgage, contract for deed, or other obligation	240
secured in whole or in part by the land or structure on or in	241
which the facility is located;	242

(d) Any lease or sublease of the land or structure on or in	243
which the facility is located.	244

(2) "Owner" does not mean a holder of a debenture or bond	245
related to the nursing facility or intermediate care facility for	246
the mentally retarded and purchased at public issue or a regulated	247
lender that has made a loan related to the facility unless the	248
holder or lender operates the facility directly or through a	249
subsidiary.	250

(T) "Patient" includes "resident."

251

(U) Except as provided in divisions (U)(1) and (2) of this	252
section, "per diem" means a nursing facility's or intermediate	253
care facility for the mentally retarded's actual, allowable costs	254
in a given cost center in a cost reporting period, divided by the	255
facility's inpatient days for that cost reporting period.	256

(1) When calculating indirect care costs for the purpose of	257
establishing rates under section 5111.241 of the Revised Code,	258
"per diem" means an intermediate care facility for the mentally	259
retarded's actual, allowable indirect care costs in a cost	260
reporting period divided by the greater of the facility's	261
inpatient days for that period or the number of inpatient days the	262
facility would have had during that period if its occupancy rate	263
had been eighty-five per cent.	264

(2) When calculating capital costs for the purpose of	265
establishing rates under section 5111.251 of the Revised Code,	266
"per diem" means a facility's actual, allowable capital costs in a	267
cost reporting period divided by the greater of the facility's	268
inpatient days for that period or the number of inpatient days the	269
facility would have had during that period if its occupancy rate	270
had been ninety-five per cent.	271

(V) "Provider" means an operator with a provider agreement.

272

(W) "Provider agreement" means a contract between the	273
department of job and family services and the operator of a	274
nursing facility or intermediate care facility for the mentally	275
retarded for the provision of nursing facility services or	276
intermediate care facility services for the mentally retarded	277
under the medicaid program.	278

(X) "Purchased nursing services" means services that are	279
provided in a nursing facility by registered nurses, licensed	280
practical nurses, or nurse aides who are not employees of the	281
facility.	282

(Y) "Reasonable" means that a cost is an actual cost that is	283
appropriate and helpful to develop and maintain the operation of	284
patient care facilities and activities, including normal standby	285
costs, and that does not exceed what a prudent buyer pays for a	286
given item or services. Reasonable costs may vary from provider to	287
provider and from time to time for the same provider.	288

(Z) "Related party" means an individual or organization that,	289
to a significant extent, has common ownership with, is associated	290
or affiliated with, has control of, or is controlled by, the	291
provider.	292

(1) An individual who is a relative of an owner is a related	293
party.	294

(2) Common ownership exists when an individual or individuals	295
possess significant ownership or equity in both the provider and	296
the other organization. Significant ownership or equity exists	297
when an individual or individuals possess five per cent ownership	298
or equity in both the provider and a supplier. Significant	299
ownership or equity is presumed to exist when an individual or	300
individuals possess ten per cent ownership or equity in both the	301
provider and another organization from which the provider	302
purchases or leases real property.	303

(3) Control exists when an individual or organization has the	304
power, directly or indirectly, to significantly influence or	305
direct the actions or policies of an organization.	306

(4) An individual or organization that supplies goods or	307
services to a provider shall not be considered a related party if	308
all of the following conditions are met:	309

(a) The supplier is a separate bona fide organization.

310

(b) A substantial part of the supplier's business activity of	311
the type carried on with the provider is transacted with others	312
than the provider and there is an open, competitive market for the	313
types of goods or services the supplier furnishes.	314

(c) The types of goods or services are commonly obtained by	315
other nursing facilities or intermediate care facilities for the	316
mentally retarded from outside organizations and are not a basic	317
element of patient care ordinarily furnished directly to patients	318
by the facilities.	319

(d) The charge to the provider is in line with the charge for	320
the goods or services in the open market and no more than the	321
charge made under comparable circumstances to others by the	322
supplier.	323

(AA) "Relative of owner" means an individual who is related	324
to an owner of a nursing facility or intermediate care facility	325
for the mentally retarded by one of the following relationships:	326

(1) Spouse;

327

(2) Natural parent, child, or sibling;

328

(3) Adopted parent, child, or sibling;

329

(4) Stepparent, stepchild, stepbrother, or stepsister;

330

(5) Father-in-law, mother-in-law, son-in-law,	331
daughter-in-law, brother-in-law, or sister-in-law;	332

(6) Grandparent or grandchild;

333

(7) Foster caregiver, foster child, foster brother, or foster	334
sister.	335

(BB) "Renovation" and "extensive renovation" mean:

336

(1) Any betterment, improvement, or restoration of an	337
intermediate care facility for the mentally retarded started	338
before July 1, 1993, that meets the definition of a renovation or	339
extensive renovation established in rules adopted by the director	340
of job and family services in effect on December 22, 1992.	341

(2) In the case of betterments, improvements, and	342
restorations of intermediate care facilities for the mentally	343
retarded started on or after July 1, 1993:	344

(a) "Renovation" means the betterment, improvement, or	345
restoration of an intermediate care facility for the mentally	346
retarded beyond its current functional capacity through a	347
structural change that costs at least five hundred dollars per	348
bed. A renovation may include betterment, improvement,	349
restoration, or replacement of assets that are affixed to the	350
building and have a useful life of at least five years. A	351
renovation may include costs that otherwise would be considered	352
maintenance and repair expenses if they are an integral part of	353
the structural change that makes up the renovation project.	354
"Renovation" does not mean construction of additional space for	355
beds that will be added to a facility's licensed or certified	356
capacity.	357

(b) "Extensive renovation" means a renovation that costs more	358
than sixty-five per cent and no more than eighty-five per cent of	359
the cost of constructing a new bed and that extends the useful	360
life of the assets for at least ten years.	361

For the purposes of division (BB)(2) of this section, the	362
cost of constructing a new bed shall be considered to be forty	363
thousand dollars, adjusted for the estimated rate of inflation	364
from January 1, 1993, to the end of the calendar year during which	365
the renovation is completed, using the consumer price index for	366
shelter costs for all urban consumers for the north central	367
region, as published by the United States bureau of labor	368
statistics.	369

The department of job and family services may treat a	370
renovation that costs more than eighty-five per cent of the cost	371
of constructing new beds as an extensive renovation if the	372
department determines that the renovation is more prudent than	373
construction of new beds.	374

(CC) "Title XIX" means Title XIX of the "Social Security	375
Act," 79 Stat. 286 (1965), 42 U.S.C. 1396, as amended.	376

(DD) "Title XVIII" means Title XVIII of the "Social Security	377
Act," 79 Stat. 286 (1965), 42 U.S.C. 1395, as amended.	378

Section 2. That existing section 5111.20 of the Revised Code	379
is hereby repealed.	380