(4) In cases where more than one enhanced rate level
is in effect during the reporting period, the spending requirement
will be based on the weighted average enhanced rate level in effect
during the reporting period calculated as follows.
(A) Multiply the first enhanced rate level in effect
during the reporting period by the most recently available reliable
Medicaid days of service utilization data for the time period the
first enhanced rate level was in effect.
(B) Multiply the second enhanced rate level in effect
during the reporting period by the most recently available reliable
Medicaid days of service utilization data for the time period the
second enhanced rate level was in effect.
(C) Sum the products from subparagraphs (A) and (B)
of this paragraph.
(D) Divide the sum from subparagraph (C) of this paragraph
by the sum of the most recently available reliable Medicaid days of
service utilization data for the entire reporting period used in subparagraphs
(A) and (B) of this paragraph.
(j) Determine each participating facility's total nursing
rate component. Each participating facility's total nursing rate component
will be equal to the nursing care staff base rate as defined in subsection
(b)(6) of this section, plus any add-on payments associated with staffing
enhancements selected by and awarded to the facility during open enrollment.
HHSC will determine a per diem add-on payment for each enhanced staffing
level informed by analysis of the most recently available reliable
data relating to staff compensation levels and available appropriations
for the program as specified in subsection (h) of this section.
(k) Spending requirements for participants. Participating
facilities are subject to a nursing care staff spending requirement
with recoupment calculated as follows.
(1) Effective September 1, 2023, HHSC will complete
calculations associated with nursing care rate increases and spending
requirements in compliance with §355.304 of this subchapter (relating
to Direct Care Staff Spending Requirement on or after September 1,
2023).
(2) At the end of the rate year, a spending floor will
be calculated by multiplying accrued Medicaid fee-for-service and
managed care nursing care staff revenues by 0.70.
(3) Accrued allowable Medicaid nursing care staff fee-for-service
expenses for the rate year will be compared to the spending floor
from paragraph (2) of this subsection. HHSC or its designee will recoup
the difference between the spending floor and accrued allowable Medicaid
nursing care staff fee-for-service expenses from facilities whose
Medicaid nursing care staff spending is less than their spending floor.
(4) At no time will a participating facility's nursing
care rates after spending recoupment be less than the nursing care
staff base rates.
(l) Dietary and Fixed Capital Mitigation. Recoupment
of funds described in subsection (k) of this section may be mitigated
by high dietary and fixed capital expenses as follows.
(1) Calculate dietary cost deficit. At the end of the
facility's rate year, accrued Medicaid dietary per diem revenues will
be compared to accrued, allowable Medicaid dietary per diem costs.
If costs are greater than revenues, the dietary per diem cost deficit
will be equal to the difference between accrued, allowable Medicaid
dietary per diem costs and accrued Medicaid dietary per diem revenues.
If costs are less than revenues, the dietary cost deficit will be
equal to zero.
(2) Calculate dietary revenue surplus. At the end of
the facility's rate, accrued Medicaid dietary per diem revenues will
be compared to accrued, allowable Medicaid dietary per diem costs.
If revenues are greater than costs, the dietary per diem revenue surplus
will be equal to the difference between accrued Medicaid dietary per
diem revenues and accrued, allowable Medicaid dietary per diem costs.
If revenues are less than costs, the dietary revenue surplus will
be equal to zero.
(3) Calculate fixed capital cost deficit. At the end
of the facility's rate year, accrued Medicaid fixed capital asset
per diem revenues will be compared to accrued, allowable Medicaid
fixed capital asset per diem costs. Allowable fixed capital asset
costs are defined in §355.318(d)(4)(C) of this subchapter. If
costs are greater than revenues, the fixed capital cost per diem deficit
will be equal to the difference between accrued, allowable Medicaid
fixed capital per diem costs and accrued Medicaid fixed capital per
diem revenues. If costs are less than revenues, the fixed capital
cost deficit will be equal to zero. For purposes of this paragraph,
fixed capital per diem costs of facilities with occupancy rates below
85 percent are adjusted to the cost per diem the facility would have
accrued had it maintained an 85 percent occupancy rate throughout
the rate year.
(4) Calculate fixed capital revenue surplus. At the
end of the facility's rate year, accrued Medicaid fixed capital asset
per diem revenues will be compared to accrued, allowable Medicaid
fixed capital asset per diem costs. Allowable fixed capital asset
costs are defined in §355.318(d)(4)(C) of this subchapter. If
revenues are greater than costs, the fixed capital revenue per diem
surplus will be equal to the difference between accrued Medicaid fixed
capital per diem revenues and accrued, allowable Medicaid fixed capital
per diem costs. If revenues are less than costs, the fixed capital
revenue surplus will be equal to zero. For purposes of this paragraph,
fixed capital per diem costs of facilities with occupancy rates below
85 percent are adjusted to the cost per diem the facility would have
accrued had it maintained an 85 percent occupancy rate throughout
the rate year.
(5) Mitigation of a dietary per diem cost deficit.
Facilities with a dietary per diem cost deficit will have their dietary
per diem cost deficit reduced by their fixed capital per diem revenue
surplus, if any. Any remaining dietary per diem cost deficit will
be capped at $2.00 per diem.
(6) Mitigation of a fixed capital cost per diem deficit.
Facilities with a fixed capital cost per diem deficit will have their
fixed capital cost per diem deficit reduced by their dietary revenue
per diem surplus, if any. Any remaining fixed capital per diem cost
deficit will be capped at $2.00 per diem.
(7) Recoupment calculation. Each facility's recoupment,
as calculated in subsection (k) of this section, will be reduced by
the sum of that facility's dietary per diem cost deficit, as calculated
in paragraph (5) of this subsection, and its fixed capital per diem
cost deficit as calculated in paragraph (6) of this subsection.
(m) Adjusting spending requirements. Facilities that
determine that they will not be able to meet their spending requirements
from subsection (k) of this section may request a reduction in their
spending requirements and associated rate add-on. These requests will
be effective on the first day of the month following approval of the
request.
(n) Voluntary withdrawal. Facilities wishing to withdraw
from participation must notify HHSC in writing by certified mail,
and the request must be signed by an authorized representative as
designated per the HHSC signature authority designation form applicable
to the provider's contract or ownership type. Facilities voluntarily
withdrawing must remain nonparticipants for the remainder of the rate
year. The participation end date for facilities voluntarily withdrawing
from the program will be effective on the date of the withdrawal,
as determined by HHSC.
(o) Notification of recoupment based on annual staffing
and compensation report or cost report. The estimated amount to be
recouped is indicated in STAIRS. STAIRS will generate an email to
the entity contact, indicating that the facility's estimated recoupment
is available for review. If HHSC's subsequent review of the staffing
and compensation report results in report adjustments that change
the amount to be repaid to HHSC or its designee, the facility's entity
contact will be notified by email that the adjustments and the adjusted
amount to be repaid are available in STAIRS for review. HHSC or its
designee will recoup any amount owed from a facility's vendor payments
following the date of the initial or subsequent notification.
(p) Change of ownership and contract terminations.
(1) Facilities required to submit a staffing and compensation
report due to a change of ownership or contract termination as described
in subsection (d) of this section will have funds held as per 26 TAC §554.210
(relating to Change of Ownership and Notice of Changes) until HHSC
receives an acceptable staffing and compensation report and funds
identified for recoupment from subsection (k) of this section are
repaid to HHSC or its designee. Informal reviews and formal appeals
relating to these reports are governed by §355.110 of this chapter(relating
to Informal Reviews and Formal Appeals). HHSC or its designee will
recoup any amount owed from the facility's vendor payments that are
being held. In cases where funds identified for recoupment cannot
be repaid from the held vendor payments, the responsible entity, as
defined in subsection (b)(10) of this section, will be jointly and
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