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

514.13.37 Cost AdjustmentReported facility costs are subject to review and analysis through document/desk reviewprocess. Adjustments are made to exclude non-allowable costs and by application of theagency’s established cost standards using the following methodologies: Standard Services,Mandated Services, and Nursing Services (described below).514.13.38 Standard ServicesTotal reported allowable costs in the standard services area are compared against the total coststandard for these cost centers using the appropriate bed group for the facility. If the totalreported allowable exceeds the total cost standard, then the facility rate is limited to thestandard services CAP.514.13.39 Mandated ServicesTotal reported allowable costs in the mandated services area are fully recognized for these costcenters, providing they do not exceed the 90th percentile of total reported costs by bed group.514.13.40 Nursing ServicesAllowable costs and reimbursement for nursing services will be determined on a facility byfacility basis by the kind and amount of services needed and being delivered to the resident.The staffing required to deliver the care and the restorative and rehabilitative programs offeredby the facility will be based on the application of a minimum staffing pattern and adjustments toreflect needs determined by the case mix characteristics.Monthly billing information for services rendered to nursing facility residents will include dataderived directly from the computerized assessment instrument for each resident, which may beused to determine case mix scores for each resident and composite score for the facility. Thesecase mix scores will measure the relative intensity and service needs of the facility’s residentsand will comprise the basis for determining allowable adjustments to per diem staffing andnursing costs required to deliver the kind and amount of services needed.514.13.41 Cost of CapitalCapital costs will be determined on a facility-by-facility basis applying the Standard AppraisalValue (SAV) methodology.A. Capitalization RateA capitalization rate is established to reflect the current SAV of the real property andspecialized equipment. This overall rate includes an interest rate for land, building andequipment, an allowance for return on the equity investment in the land, building andequipment, and an appraisal factor used to index all facilities to the cost reporting periodending June 30.Department of Health and Human Resources Chapter 514: Nursing Facility Services Page 66January 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.