Effective 28 Aug 1996

208.169. Reimbursement rate for nursing care services — not revised on change of ownership, management, operation — assignment to new facilities entering program — calculation — determination of trend factor, effect — expiration date of certain provisions. — 1. Notwithstanding other provisions of this chapter, including but not limited to sections 208.152, 208.153, 208.159 and 208.162:

*(1) There shall be no revisions to a facility's reimbursement rate for providing nursing care services under this chapter upon a change in ownership, management control, operation, stock, leasehold interests by whatever form for any facility previously licensed or certified for participation in the Medicaid program. Increased costs for the successor owner, management or leaseholder that result from such a change shall not be recognized for purposes of reimbursement;

*(2) In the case of a newly built facility or part thereof which is less than two years of age and enters the Title XIX program under this chapter after July 1, 1983, a reimbursement rate shall be assigned based on the lesser of projected estimated operating costs or one hundred ten percent of the median rate for the facility's class to include urban and rural categories for each level of care including ICF only and SNF/ICF. The rates set under this provision shall be effective for a period of twelve months from the effective date of the provider agreement at which time the rate for the future year shall be set in accordance with reported costs of the facility recognized under the reimbursement plan and as provided in subdivisions (3) and (4) of this subsection. Rates set under this section may in no case exceed the maximum ceiling amounts in effect under the reimbursement regulation;

*(3) Reimbursement for capital related expenses for newly built facilities entering the Title XIX program after March 18, 1983, shall be calculated as the building and building equipment rate, movable equipment rate, land rate, and working capital rate.

(a) The building and building equipment rate will be the lower of:

a. Actual acquisition costs, which is the original cost to construct or acquire the building, not to exceed the costs as determined in section 197.357; or

b. Reasonable construction or acquisition cost computed by applying the regional Dodge Construction Index for 1981 with a trend factor, if necessary, or another current construction cost measure multiplied by one hundred eight percent as an allowance for fees authorized as architectural or legal not included in the Dodge Index Value, multiplied by the square footage of the facility not to exceed three hundred twenty-five square feet per bed, multiplied by the ratio of forty minus the actual years of the age of the facility divided by forty; and multiplied by a return rate of twelve percent; and divided by ninety-three percent of the facility's total available beds times three hundred sixty-five days.

(b) The maximum movable equipment rate will be fifty-three cents per bed day.

(c) The maximum allowable land area is defined as five acres for a facility with one hundred or less beds and one additional acre for each additional one hundred beds or fraction thereof for a facility with one hundred one or more beds.

(d) The land rate will be calculated as:

a. For facilities with land areas at or below the maximum allowable land area, multiply the acquisition cost of the land by the return rate of twelve percent, divide by ninety-three percent of the facility's total available beds times three hundred sixty-five days.

b. For facilities with land areas greater than the maximum allowable land area, divide the acquisition cost of the land by the total acres, multiply by the maximum allowable land area, multiply by the return rate of twelve percent, divide by ninety-three percent of the facility's total available beds times three hundred sixty-five days.

(e) The maximum working capital rate will be twenty cents per day;

*(4) If a provider does not provide the actual acquisition cost to determine a reimbursement rate under subparagraph a. of paragraph (a) of subdivision (3) of subsection 1 of this section, the sum of the building and building equipment rate, movable equipment rate, land rate, and working capital rate shall be set at a reimbursement rate of six dollars;

(5) For each state fiscal year a negotiated trend factor shall be applied to each facility's Title XIX per diem reimbursement rate. The trend factor shall be determined through negotiations between the department and the affected providers and is intended to hold the providers harmless against increase in cost. In no circumstances shall the negotiated trend factor to be applied to state funds exceed the health care finance administration market basket price index for that year. The provisions of this subdivision shall apply to fiscal year 1996 and thereafter.

2. The provisions of subdivisions (1), (2), (3), and (4) of subsection 1 of this section shall remain in effect until July 1, 1989, unless otherwise provided by law.

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(L. 1983 H.B. 825, A.L. 1986 S.B. 463 & 629, A.L. 1987 S.B. 277, A.L. 1995 S.B. 366, A.L. 1996 H.B. 1081)

*Subdivisions (1), (2), (3), & (4) of subsection 1 expired 7-1-89.