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State Home Per Diem Nursing Home Prevailing Rate Calculation

State Home Per Diem Nursing Home Prevailing Rate Calculation. October 2018.

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State Home Per Diem Nursing Home Prevailing Rate Calculation

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  1. State Home Per Diem Nursing Home Prevailing Rate Calculation October 2018 Colette Alvarez Chief, State Home Per Diem Program

  2. Policy and Regulation • 38 CFR 51.41 Contracts and Provider Agreements for Certain Veterans with Service Connected Disabilities • Federal Register (FR) FR Vol 77, No. 235 Interim Final Rule AO57 • https://www.gpo.gov/fdsys/pkg/FR-2012-12-06/pdf/2012-29521.pdf • VA/NASVH 2013 Provider Agreement

  3. Calculation Factors There are 3 parts to the Per Diem Calculation • Physician Expense (PE) Component • Wage Index (WI) Component • Resource Utilization Group, Version IV (RUG-IV) Average Component

  4. Data Source- Physician Expense The Data for the Physician Expense component can be found on the Center for Medicare Services (CMS) web site. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. There are two parts to the physician expense component. • Practice Expense (PE) per Hour (HR) Data – Total PE HR for all physicians. • The Geographic Practice Cost Index (GPCI). The physician work (PW) GPCI is listed by County and State. Note: The PE data is based on a Calendar Year not Fiscal Year.

  5. Data Source – RUG-IV Average The Resource Utilization Group, Version IV (RUG-IV) data is found on the Federal Register (FR) – either in a Final Rule or a Notice. The data used in the FY 2019 calculation is found in the FR Volume 83, Number 192 (October 3, 2018) Department of Heath and Human Services Center for Medicare & Medicaid Services – Medicare Program; Medicare Program; Prospective Payment System (PPS) and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program; Correction https://www.gpo.gov/fdsys/pkg/FR-2018-10-03/pdf/2018-21499.pdf Table 9 (Urban) Table 10 (Rural).

  6. Data Source – Wage Index The Wage Index data (Tables A and B) are found at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Section 1888(e)(4)(G)(ii) of the Social Security Act requires that the Secretary adjust the Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Federal rates to account for differences in area wage levels, using a wage index that we find appropriate. Since the inception of a PPS for SNFs, we have used hospital wage data in developing a wage index to be applied to SNFs. The SNF PPS wage index values for any fiscal year are calculated from the same data used to compute that fiscal year's acute care hospital inpatient wage index data.

  7. Calculating the Physician Expense The Physician Expense Component is calculated by multiplying the PE HR by the Specific PW GPCI for each state Home. The result is an adjusted PE HR. Note: The national PE HR for CY18 is $116.96 and all applies to all state homes. This has not changed since 2012. The adjusted PE HR is then multiplied by 12 and divided by 365 to get a daily rate. Example: The PW GPCI for the State Veteran Home (SVH) in Grand Island, NE is 1.0 when multiplied by $116.96 the adjusted PE HR is $116.96 which is then multiplied by 12 and divided by 365 to get a daily rate of $3.85. The Physician rate of $3.85 will be added to the Average RUG-IV calculation to get the total per diem.

  8. Calculating the RUG-IV and Wage Index The RUG-IV Average is calculated by taking the labor portion of each RUG and multiplying it by the Wage Index of the specific CBSA or State/Territory and then adding the non-labor component. This calculation is done for all 66 RUGS for all 52 States/Territories (Rural Areas) and 440 CBSA’s (Urban Areas) regardless whether a State home is located in that area. Example: The wage index for the state home in Grand Island, NE is taken from the Urban table and is .9652. When all 66 RUGS are calculated using this Wage Index the average of RUGs rate is $416.91. The Average RUG-IV rate of $416.91 is then add to the physician expense component of $3.85 to get a final per diem of $420.76.

  9. Rate Comparison for NE

  10. FY Comparison 2018 - 2019 A comparison between Fiscal Year (FY) 2018 submitted and FY 2019 for Prevailing Rates was performed. The FY19 average rate for all homes was $404.80, up $4.79 from the $400.01 rates in FY18 or an increase of 1.20%

  11. FY Comparison 2017 - 2018 A comparison between FY 2017 and FY 2018 Prevailing Rates was performed. The FY18 average rate for all homes was $400.01, up $3.28 from the $396.73 rates in FY17 or an increase of .83%

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