Administrative Code

Virginia Administrative Code
10/27/2021

Article 6. New Nursing Facilities

12VAC30-90-60. Interim rate.

Article 6
New Nursing Facilities

A. A new facility shall be defined as follows:

1. A facility that is newly enrolled and new construction has taken place through the COPN process; or

2. A facility that is newly enrolled that was previously denied payments for new admissions and was subsequently terminated from the program.

B. The following provisions sunset effective July 1, 2015, when applied to indirect reimbursement but remain in effect when applied to capital reimbursement.

1. Upon a showing of good cause, and approval of DMAS, an existing NF that expands its bed capacity by 50% or more shall have the option of retaining its prospective rate or being treated as a new NF.

2. A replacement facility or one that has changed location may not be considered a new facility if it serves the same inpatient population. An exception may be granted by DMAS if the provider can demonstrate that the occupancy substantially changed as a result of the facility being replaced or changing location. A decline in the replacement facility's total occupancy of 20 percentage points, in the replacement facility's first cost reporting period, shall be considered to indicate a substantial change when compared to the lower of the old facility's previous two prior cost reporting periods. The replacement facility shall receive the previous operator's operating rates if it does not qualify to be considered a new facility.

3. A change in either ownership or adverse financial conditions (e.g., bankruptcy), or both, of a provider does not change a nursing facility's status to be considered a new facility.

4. Effective July 1, 2001, for all new NFs the required occupancy percentage for indirect and capital costs shall be waived for establishing the first cost reporting period interim rate. The required occupancy percentage for dates of service on or before June 30, 2013, shall be 90%, and for dates of service on or after July 1, 2013, shall be 88%. This first cost reporting period shall not exceed 13 months from the date of the NF's certification.

5. The required occupancy percentage for indirect and capital costs shall be applied to the first and subsequent cost reporting periods' actual indirect and capital costs for establishing such NFs second and future cost reporting periods' prospective reimbursement rates. The required occupancy percentage shall be considered as having been satisfied if the new NF achieved the required occupancy percentage at any point in time during the first cost reporting period.

a. The department may grant an exception to the minimum occupancy requirement for reimbursement purposes for beds taken out of service for the purpose of renovation. In this case, the occupancy requirement shall be calculated as the required occupancy percentage of available bed days for the period of the exception plus the required occupancy percentage of licensed bed days for the remainder of the cost report year.

b. The provider shall notify DMAS and the Virginia Department of Health (VDH), Division of Long Term Care Services, Office of Licensure and Certification in advance and present a renovation plan including a reasonable timetable for when the beds will be placed back into service.

c. The provider shall keep the appropriate documentation of available beds and days during the renovation period, which will provide the evidence of the beds and days taken out of service for renovation purposes. This supporting documentation, along with a copy of the provider's notification letter to the VDH Division of Long Term Care Services, Office of Licensure and Certification shall be submitted with the filing of the provider's cost report, as applicable. The provider's notification letter shall account for the number of beds not in use for the defined period of time.

6. A new NF's interim rate for the first cost reporting period shall be determined based upon the lower of its anticipated allowable cost determined from a detailed budget (or pro forma cost report) prepared by the provider and accepted by DMAS, or the appropriate operating ceilings or charges.

7. Effective July 1, 2001, on the first day of its second cost reporting period, a new nursing facility's interim plant or capital, as appropriate, rate shall be converted to a per diem amount by dividing its allowable plant or capital costs for its first cost reporting period by the required occupancy percentage of the potential number of patient days for all licensed beds during the first cost reporting period.

8. During its first semiannual period of operation, a newly constructed or newly enrolled NF shall have an assigned CMI based upon its peer group's normalized average Medicaid CMI for direct patient care. An expanded NF receiving new NF treatment shall receive the CMI calculated for its last semiannual period prior to obtaining new NF status.

Statutory Authority

§ 32.1-325 of the Code of Virginia; 42 USC § 1396 set seq.

Historical Notes

Derived from VR460-03-4.1940:1 Article 4 eff. July 1, 1994; amended, Virginia Register Volume 12, Issue 16, eff. July 1, 1996; Volume 17, Issue 18, eff. July 1, 2001; Volume 18, Issue 18, eff. July 1, 2002; Volume 27, Issue 15, eff. April 27, 2011; Volume 30, Issue 19, eff. June 18, 2014; Volume 32, Issue 9, eff. February 11, 2016.

12VAC30-90-65. Final rate and effective for dates of services beginning July 1, 2001, through June 30, 2014.

A. This section shall apply to dates of services beginning July 1, 2001, through June 30, 2014.

B. DMAS shall reimburse the lower of the appropriate operating ceilings, charges or actual allowable cost for a new NF's first cost reporting period of operation, subject to the procedures outlined in subdivisions 4, 5, and 6 of 12VAC30-90-60.

C. Upon determination of the actual allowable operating cost for direct patient care and indirect patient care the per diem amounts shall be used to determine if the provider is below the peer group ceiling used to set its interim rate. If indirect costs are below the ceiling, an efficiency incentive shall be paid at settlement of the first year cost report.

D. This incentive will allow a NF to be paid up to 25% of the difference between its actual allowable indirect operating cost and the peer group ceiling used to set the interim rate. (Refer to 12VAC30-90-41 F.)

Statutory Authority

§ 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.

Historical Notes

Derived from Virginia Register Volume 12, Issue 16, eff. July 1, 1996; amended, Virginia Register Volume 17, Issue 18, eff. July 1, 2001; Volume 32, Issue 9, eff. February 11, 2016.

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