Chapter 514 - Nursing Facility Services - DHHR - State of West ...

514.13.12 Allowable Costs for Cost CentersReimbursement for nursing facility services is limited to those costs required to deliver care toresidents. These are costs related to inpatient care, i.e., facility operating costs and the cost ofdirect services to residents, which are considered for reimbursement. Allowed costs are subjectto the regulations prescribing the treatment of specific items in this manual.The cost centers are standard services, mandated services, nursing services and capital. Acost standard is developed for each cost center which becomes the maximum allowable cost forreimbursement purposes. Allowable costs are determined by the following four methodologies:Standard Services, Mandated Services, Nursing Services, and Cost of Capital.514.13.13 Standard ServicesThe cost standard for standard services is comprised of 4 departmental cost centers: Dietary,Laundry & Housekeeping, Medical Records and Administration. A separate cost standard iscalculated for each of these cost centers by bed group based on bed size (0-90 beds and 91+beds). Within each cost center, the per patient day (PPD) allowable costs are arrayedassuming 100% occupancy on a facility specific basis. Extremes are eliminated by includingonly those values falling within plus or minus one standard deviation; this is 90% occupancylevel. The cost standard for standard services is the sum of the cost center CAP for Dietary,Laundry & Housekeeping, Medical Records and Administration. The cost standard thenestablishes the maximum allowable cost by bed group for Standard Services.514.13.14 Mandated ServicesThe Mandated Services component is comprised of (4) four departmental cost centers:Activities, Maintenance, Utilities and Taxes & Insurance. A separate cost standard is calculatedfor each of these costs centers by bed group. Within each cost center the PPD allowable costsare arrayed from highest to lowest. The 90 th percentile value of each cost center is thenselected as the CAP. The Mandated Services cost standard is the sum of the cost center CAPfor Activities, Maintenance, Utilities and Taxes & Insurance. The cost standard then establishesthe maximum allowable cost by bed group for Mandated Services.514.13.15 Nursing ServicesThe cost standard for Nursing Services is shown as the Resident Assessment calculation on therate sheet. This calculation provides for professional staffing levels and supply costs that arerecognized as representative of those necessary for delivery of the core level of resident needs.It incorporates all minimum Federal and State mandates for licensure and certification of nursingfacilities.The professional staffing hours on the Resident Assessment calculation serve as a benchmarkand are held constant over time. A factor of 0.35 hours PPD is included in the LPN hours for 0-90 beds and 0.30 hours PPD for 91+ beds to account for restorative services. Additionally, 0.05hours PPD is included in the standard Aides hours for restorative services.Department of Health and Human Resources Chapter 514: Nursing Facility Services Page 57January 1, 2013DISCLAIMER: This manual does not address all the complexities of Medicaid policies and procedures,and must be supplemented with all State and Federal Laws and Regulations.