BERRYDUNN STYLE POTPOURRI€¦ · Presentation of Financial Statements of Not-for-Profit Entities. Effective for annual periods beginning after December 15, 2017** Financial Accounting
79
CLICK TO EDIT MASTER TEXT STYLES BERRYDUNN STYLE POTPOURRI State regulatory update, financial and reimbursement trends, tax and accounting updates, and a review of our proprietary database
BERRYDUNN STYLE POTPOURRIState regulatory update financial and reimbursement trends tax and accounting updates and a review of our proprietary database
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TAX REFORM UPDATE
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1 QUALIFIED BUSINESS INCOME DEDUCTION
2QUALIFIED PARKING3
OTHER BUSINESS CHANGES
AGENDA
23
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QUALIFIED BUSINESS INCOME (QBI) DEDUCTION
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PASS-THROUGH BUSINESS INCOME
WHAT IS QBI
Net amount of qualified income gain deductions and losses from a Qualified Business
EXCLUDES
bull Wagesguaranteed payments you earned from such entities
bull Certain investment income
25
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TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
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WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
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QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
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NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
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PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
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ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
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OTHER BUSINESS CHANGES
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OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
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QUALIFIED PARKING
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QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
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FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
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NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
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NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
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MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
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AUDIT AND ACCOUNTING UPDATE
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NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
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FEDERAL UPDATEVALUE BASED PURCHASING
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VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
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SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
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SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
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HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
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REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
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INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
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VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
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EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
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VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
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STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
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CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
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PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
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PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
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EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
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MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
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$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
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$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
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STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
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STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
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000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
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(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
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3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
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NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
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LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
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HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
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PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
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bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
TAX REFORM UPDATE
CLICK TO EDIT MASTER TEXT STYLES
1 QUALIFIED BUSINESS INCOME DEDUCTION
2QUALIFIED PARKING3
OTHER BUSINESS CHANGES
AGENDA
23
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED BUSINESS INCOME (QBI) DEDUCTION
CLICK TO EDIT MASTER TEXT STYLES
PASS-THROUGH BUSINESS INCOME
WHAT IS QBI
Net amount of qualified income gain deductions and losses from a Qualified Business
EXCLUDES
bull Wagesguaranteed payments you earned from such entities
bull Certain investment income
25
CLICK TO EDIT MASTER TEXT STYLES
TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
1 QUALIFIED BUSINESS INCOME DEDUCTION
2QUALIFIED PARKING3
OTHER BUSINESS CHANGES
AGENDA
23
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED BUSINESS INCOME (QBI) DEDUCTION
CLICK TO EDIT MASTER TEXT STYLES
PASS-THROUGH BUSINESS INCOME
WHAT IS QBI
Net amount of qualified income gain deductions and losses from a Qualified Business
EXCLUDES
bull Wagesguaranteed payments you earned from such entities
bull Certain investment income
25
CLICK TO EDIT MASTER TEXT STYLES
TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
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QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
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OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
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EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED BUSINESS INCOME (QBI) DEDUCTION
CLICK TO EDIT MASTER TEXT STYLES
PASS-THROUGH BUSINESS INCOME
WHAT IS QBI
Net amount of qualified income gain deductions and losses from a Qualified Business
EXCLUDES
bull Wagesguaranteed payments you earned from such entities
bull Certain investment income
25
CLICK TO EDIT MASTER TEXT STYLES
TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
PASS-THROUGH BUSINESS INCOME
WHAT IS QBI
Net amount of qualified income gain deductions and losses from a Qualified Business
EXCLUDES
bull Wagesguaranteed payments you earned from such entities
bull Certain investment income
25
CLICK TO EDIT MASTER TEXT STYLES
TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
TYPES OF ENTITIES THAT CAN HAVE QBI
bull S Corporations
bull Partnerships (LLCs LPs and General Partnerships)
bull Sole Proprietorships- Schedule C
bull Trusts and Estates
bull Schedule E (maybe)
26
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
WHAT IS A QUALIFIED TRADE OR BUSINESSSECTION 199A DEFINES A QUALIFIED TRADE OR BUSINESS BY EXCLUSION
Every trade or business is qualified other thanbull The trade or business of performing services as an employee andbull A specified service trade or business (SSTB)
27
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
QBI DEDUCTION
LESSER OFbull Combined Qualified Business Income deduction of taxpayer orbull 20 of the excess of taxable income over sum of net capital gain
QUALIFIED BUSINESS INCOME DEDUCTION CALCULATIONLesser ofbull 20 of QBI orbull GREATER of
bull 50 of allocable share of W-2 wages paid by entity orbull 25 of allocable share of W-2 wages PLUS 25 of allocable
share of unadjusted basis of the entityrsquos qualified assets
NOTE W-2ASSET LIMITATIONS IGNORED IF TAXABLE INCOME BEFORE QBI DEDUCTION lt $315000 (MFJ) OR $157500 FOR ALL OTHER FILERS
28
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
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$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
NON-SSTB SSTB
Taxable Income lt $315000(MFJ $157500 Single) 20 Deduction 20 Deduction
Taxable Income gt $315000 but less than $415000
LimitationPhased-In
DeductionPhase-Out
Taxable Income gt $415000 W-2 Property Limit Applies Limit Applies
29
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
PerformingArts
Athletics
Accounting
ldquoAny trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its
employees or ownersrdquo
Investment Management
Financial Services
Actuarial Services
Law
Consulting
Health
BrokerageServices
QBI DEDUCTIONSpecified service businesses prohibited
30
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
ASSISTED LIVING FACILITIES
Proposed Regulations define performance of services in the field of health asldquothe provision of medical services by individuals such as physicians pharmacists nurses dentists veterinarians physical therapists psychologists and other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient)rdquo
31
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
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FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
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EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGES
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
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$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
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STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
OTHER BUSINESS CHANGESbull Business Interest Limitationbull Bonus depreciation- 100 for 2018bull New and used property eligible for bonus depreciationbull Section 179 expense increasebull Corporate rate reduction to 21bull Repeal of corporate AMT
33
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKING
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
QUALIFIED PARKINGNew change affects nonprofit and for-profit entities
What is qualified parkingThe term ldquoqualified parkingrdquo means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A) in a commuter highway vehicle or by carpool Such term shall not include any parking on or near property used by the employee for residential purposes
35
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
FOR-PROFIT ENTITIESSection 274(a)(4) states that employers will now lose their traditional business deduction with respect to their expense of providing certain disallowed qualified transportation fringe benefits to their employees including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
36
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
NONPROFIT ENTITIESSection 512(a)(7) states that nonprofit organizations will now be subject to unrelated business income tax (UBIT) for certain disallowed qualified transportation fringe benefits including items such as a commuter highway vehicle transit passes qualified parking and on-premises athletic facilities
37
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
NOTICE 2018-99Two separate categories identified
1 Employers that pay a third party for employee parking spots
For-Profit The employer loses its deduction for the cost of parking If the amount of the parking provided is more than $260month (allowable for 2018) then the excess over the $260 threshold will be includible in employee income and will be allowed as a wage deduction
Nonprofit The costs paid to a third party for employee parking up to the IRC Section 132(f)(2) limitation (which is currently $260 per month) are taxable as unrelated business income (UBI) Any excess over the limitation is taxable compensation to the employee
2 Employers that own or lease all or a portion of a parking facility
For-Profit Employers are required to use any reasonable method to calculate the amount of any disallowed deductionNonprofit A four-step approach to determining whether or not you have taxable costs (UBI) related to providing employees with parking if you own or lease a portion of your parking lot 38
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
MEDICAID LEGISLATIVE amp REGULATORY UPDATEStatus of the Industry LD 925 Emergency amp Proposed Rules and Proposed Legislation
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
AUDIT AND ACCOUNTING UPDATE
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
NEW ACCOUNTING PRONOUNCEMENTS
bull FASB ASU No 2014-09 Revenue from Contracts with Customers (Topic 606)Effective for annual periods beginning after December 15 2018
bull FASB ASU No 2016 - 02 Leases (Topic 842)Effective for annual periods beginning after December 15 2019
bull FASB ASU No 2016-14 Presentation of Financial Statements of Not-for-Profit EntitiesEffective for annual periods beginning after December 15 2017
Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) Effective date is for non-public business entities
41
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEVALUE BASED PURCHASING
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASINGPROTECTING ACCESS TO MEDICARE ACT OF 2014 (PAMA)Links financial outcomes to quality performance
How the program worksbull Starting October 1 2018 Medicare Part A payments will be cut 2 to
fund an incentive payment poolbull 60 of the pool will be returned to providers as an incentive
paymentbull Incentives based on managing hospital readmissions
43
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
SNF 30-DAY ALL-CAUSE READMISSION MEASURE bull Used in VBP for fiscal years (FY) 2019 2020 2021 and maybe more
bull SNF RM will eventually be replaced by SNF PPR bull Calculated using Medicare Fee-For-Service Part A claims
bull Includes re-hospitalizations during 30 day window from admission to the SNF
bull Excludes planned readmissions and observation stays bull Risk adjusted
44
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
SNF RE-HOSPITALIZATIONS ARE NOW LINKED TO PAYMENTbull Statute specifies to start with an all cause readmission measure
(SNF RM) and transition to a potentially preventable readmission measure (SNF PPR) after FY 20
bull Payment adjustment of 2 cut and potentially up to a 165 increase in SNF Part A rates applied for 1 year (fiscal year) based on SNFrsquos national ranking on their re-hospitalization score
45
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
HOW DOES VALUE BASED PURCHASING PROGRAM WORK
Calculate your re-hospitalization RATE using the SNF RM measure
Calculate your score based on your re-hospitalization rate during performance period OR improvement from baseline to performance period whichever is better
Rank based on your score
Link your rank to payment
Based on your rank each SNF is assigned an ldquoincentive payment multiplierrdquo used to adjust your SNF Part A payments
RE-HOSPITALIZATIONRATE
SCORE AND RANK
PAYMENT
46
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
REHOSPITALIZATION SCORES
YEAR 1Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 1If SNF RM rate lt 164 then performance score is 100If SNF RM rate gt 204 then performance score is 0
IMPROVEMENT SCORE YEAR 1If SNF RM rate lt 164 then improvement score is 90If SNF RM CY rate gt CY2015 rate then improvement score is 0
YEAR 2Better of your achievement or improvement score
ACHIEVEMENT SCORE YEAR 2If SNF RM rate lt 163 then achievement score is 100If SNF RM rate gt 198 then achievement score is 0
CMS WANTS TO REWARD IMPROVEMENT OVER TIME AS WELL AS CURRENT PERFORMANCE 47
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
INCENTIVE PAYMENT IPM IS MULTIPLIED BY YOUR REIMBURSEMENT RATE FOR ALL YOUR SNF PART A CLAIMS FOR A FYFirst Year Oct 1 2018 to Sept 30 2019IPM IN FY19 WILL RANGE FROM (098) TO 10165SNFs with less than 25 part A admissions per year assigned IPM = 100000 (Neutral ndash no gain or loss under the program)
48
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
VBP SCORES GRADED ON A CURVE TO BE SURE 60 OF WITHHOLD IS RETURNED
Order of adjustments1 Market basket adjustments2 Quality program adjustments3 VBP adjustments (net adjustment)4 Sequestration
49
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
EXCLUSIONS FROM VALUE BASED PURCHASING PROGRAM
bull Defined as lt25 eligible stays during the performance period
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
bull Defined as zero eligible stays during the baseline and performance periods
bull Receive a net neutral incentive multiplier you will not lose or gain money under VBP
LOW VOLUME
SNFrsquos
NEWSNFrsquos
bull Defined as zero eligible stays during the baseline but gt=25 during the performance period
bull SNF scored based only on achievement No restriction on what SNF can lose or gain
MISSING BASELINE
PERIOD
Can be natural or man made disasters(fire terrorism hurricane) If approved period of time will be excluded from calculation of SNF readmission rate
EXTRAORDINARY EXCEPTIONS
50
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
VALUE BASED PURCHASING TIMELINE ndash WHAT CAN YOU DO
VBP IMPACTYEAR
BASELINEPERIOD
PERFORMANCE PERIOD
FY 2019 (Oct18-Sep19)
CY 2015 (Jan15-Dec15)
CY 2017 (Jan17-Dec17)
FY 2020 (Oct19-Sep20)
CY 2016 (Oct15-Sep16)
FY 2018 (Oct17-Sep18)
FY 2021 FY 2017 FY 2019
FY 2022 FY 2018 FY 2020
51
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
STEPS TO PREVENT HOSPITAL READMISSIONSbull Assume all hospitalizations are preventablebull Understand and focus on what causes hospitalizations bull Evaluate residents on risk of readmissionbull Focus on transitions of carebull Improve communicationsbull Track hospitalizations and set a goal (quarterly feedback reports)
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
SIMILAR TO SNF RM EXCEPT THE SCOPE IS LIMITED TO 4 POTENTIALLY PREVENTABLE CLINICAL CATEGORIZES bull Inadequate mgmt of chronic conditions bull Inadequate mgmt of infections bull Inadequate mgmt of other unplanned events bull Inadequate injury prevention
53
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
FEDERAL UPDATEPATIENT DRIVEN PAYMENT MODEL
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
CHANGES TO THE SNF PPS CASE-MIX CLASSIFICATION SYSTEM
Rugs IV RCS-1 (proposed) PDPM
55
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
PROMOTING PATIENT DRIVEN VALUE-BASED CARE PDPM EFFECTIVE OCTOBER 1 2019
bull Designed to treat the whole patient rather than volume of services patient receives
bull Focuses on clinically relevant factorsbull Utilizes ICD-10 diagnosis codesbull Payment based on each aspect of residents carebull PDPM adjusts payment to reflect varying costs throughout staybull Reduces reporting burden associated with patient assessment
56
CLICK TO EDIT MASTER TEXT STYLES
PATIENT DRIVEN PAYMENT MODEL (PDPM)
SOURCE AHCA PDPM RESOURCE CENTER
Per-diem Payment
Therapy minutes no longer drive
payment
Total therapy delivery
capped at 25 for group
and concurrent
Patient characteristics drive payment
MDS coding now drives payment
COMPLETE DEPARTURE FROM RUGrsquoS IV
KEY PDPM FEATURES IMPACT ALL AREAS OF OPERATIONS AND CARE DELIVERY
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
NEW MDS ITEM SETSbull Interim Payment Assessment (IPA)bull Optional State Assessment (OSA)
NEW MDS ITEMSbull Section I SNF Primary Diagnosisbull Section J Patient Surgical Historybull Section O Discharge Therapy Itemsbull Section GG Interim Performance
62
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
EDUCATEYOURSELF
DEVELOPCAPABILITIES
ALIGN RESOURCES
STRENGTHENCAPABILITIES
HOW CAN YOU PREPARE FOR PDPM NOW
63
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
MinimumWage
Increases
Labor MarketShortage
MaineCare Shortfall
Occupancy amp Payor Mix
Trends
Limited Reserves
Closures
STATUS OF THE INDUSTRY
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
October 1 2009 $725 to $750
January 1 2017
January 1 2018
January 1 2019
$750 to $900
$900 to $1000
$1000 to $1100
January 1 2020 $1100 to $1200
On January 1 2021 and each January 1st thereafter the minimum hourly wage then in effect must be increased by the increase if any in the cost of living
STATUS OF THE INDUSTRYMINIMUM WAGE INCREASES
65
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
$298 $352 $528
$1152
$1578
$-
$500
$1000
$1500
$2000
$2500
$3000
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGESKILLEDLONG-TERM CARE UNIT AVERAGE ALLOWABLE CONTRACT LABOR COST PER PATIENT DAY BY REGION AND STATE-WIDE
66
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
$13838
$10923 $11089
$11440
$12294
$12978
$9000
$9500
$10000
$10500
$11000
$11500
$12000
$12500
$13000
$13500
2013 2014 2015 2016 2017
Region 1 Region 2 Region 3 Region 4 State Average
STATUS OF THE INDUSTRY ndash LABOR MARKET SHORTAGENURSING FACILITY AVERAGE ALLOWABLE DIRECT CARE COST PER PATIENT DAY BY REGION AND STATE-WIDE
67
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE REVENUE AND COST PER PATIENT DAY (PPD)
68
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
MaineCare Cost PPD
18285
20015
18359
20594
19001
21131
20255
21861
21289
23012
218997531746
2414710645155
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Year
MaineCare Revenue PPD
MaineCare Cost PPD
Column2
Column3
2012
$18285
$20015
2013
$18359
$20594
2014
$19001
$21131
2015
$20255
$21861
2016
$21289
$23012
2017
$21900
$24147
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLNF ndash MAINECARE SHORTFALL
69
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Chart1
REBASED 712014
REBASED 712016
MaineCare Revenue PPD
[]
-26684790
-33915596
-31300070
-20368940
-25779875
-33287999
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
2012
2013
2014
2015
2016
2017
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Year
MaineCare Revenue PPD
Column1
Column2
Column3
2012
($26684790)
2013
($33915596)
2014
($31300070)
2015
($20368940)
2016
($25779875)
2017
($33287999)
CLICK TO EDIT MASTER TEXT STYLES
(35000000)
(30000000)
(25000000)
(20000000)
(15000000)
(10000000)
(5000000)
0
50000002015 2016 2017
Direct Care Shortfall Total Shortfall Column1
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLDIRECT CARE SHORTFALL GROWTH AND TOTAL MAINECARE SHORTFALL GROWTH
70
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
CLICK TO EDIT MASTER TEXT STYLES
STATUS OF THE INDUSTRY ndash MAINECARE SHORTFALLRCF - MAINECARE SHORTFALL
71
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Chart1
NF Based
Freestanding
Total Over (Under) Paid
-4928678
411705
-4516973
-5239036
808819
-4430217
-5111272
830514
-4280758
-5689384
519768
-5169616
-6006264
1241390
-4764874
-5504507
2105159
-3399348
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
2017
2017
2017
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
NF Based
Freestanding
Total Over (Under) Paid
2012
($4928678)
$411705
($4516973)
2013
($5239036)
$808819
($4430217)
2014
($5111272)
$830514
($4280758)
2015
($5689384)
$519768
($5169616)
2016
($6006264)
$1241390
($4764874)
2017
($5504507)
$2105159
($3399348)
CLICK TO EDIT MASTER TEXT STYLES
9107 9106
9053
8978
8836
8700
8750
8800
8850
8900
8950
9000
9050
9100
9150
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRYOCCUPANCY TREND (STATE-WIDE)
72
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
000
1000
2000
3000
4000
5000
6000
7000
8000
2013 2014 2015 2016 2017
MaineCare Medicare Private Other
STATUS OF THE INDUSTRYPAYOR MIX TREND (STATE-WIDE)
73
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
(093)
170
247
(002)
(128)(150)
(100)
(050)
000
050
100
150
200
250
300
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESTOTAL MARGIN TREND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
74
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
3854 3804 3761
2971
2194
000
500
1000
1500
2000
2500
3000
3500
4000
4500
2013 2014 2015 2016 2017
STATUS OF THE INDUSTRY LIMITED RESERVESDAYS CASH ON HAND (BERRYDUNN MAINE SENIOR LIVING CLIENTS)
75
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITY CLOSURES COUNTY 2014 2015 2016 2017 2018
Bridgton Health Care Center Cumberland X
Freeport Nursing Home Cumberland X
Fryeburg Health Care Center Oxford X
Ledgeview Manor Oxford X
MGRNC ndash Jackman Regional Health Center Somerset X
Mountain Heights Health Care Facility Penobscot X
Oceanview Nursing Home Washington X
Penobscot Nursing Home Hancock X
Sebasticook Valley Health Care Facility Somerset X
St Josephrsquos Nursing Home Aroostook X
Sunrise Care Facility Washington X
Winthrop Manor Kennebec X
STATUS OF THE INDUSTRY ndash CLOSURES
76
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
LD 925 An Act making certain appropriations and allocations and changing certain provisions of the law necessary to the proper operations of state government
77
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
HOLD HARMLESS
The rate of reimbursement for nursing facilities for direct care and routine costs that results from
amending the law or the rules to reflect the revised
method of rebasing the nursing facilitys base year
pursuant to this section may not result for any
nursing facility in a rate of reimbursement that is lower
than the rate in effect on June 30 2018
For state fiscal year beginning 7118 base year for each facility is its FY that ended in the calendar year 2016 For state FYs beginning on or after 7119 subsequent rebasing must be based on most recent cost report filings available
An amount equal to 10 of allowable wages and associated benefits and taxes as reported on each facilitys as-filed cost report for its fiscal year ending in calendar year 2016 must be added to the cost per resident day
For the state FYs ending 63019 63020 and 63021 the reduction in allowable cost per day in the fixed costs component based on minimum occupancy standards applies only for an annual level of occupancy less than 70
Beginning 7119hellipthe supp pmt increases to 60centresident day is not subject to cost settlement and must be retained by the facility in its entirety for facilities with gt 80 MaineCare utilization and whose base year direct and routine aggregate costsday are lt the median aggregate direct and routine allowable costs for the facilitys peer group
REBASING
SUPPLEMENTAL WAGE ALLOWANCE
CHANGE IN OCCUPANCY PENALTY
LOW COST HIGH MEDICAID FACILITIES
12
43
LD 925 SUMMARY ndash NURSING FACILITIES
78
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
DIRECT CARE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT) IN THE RESPECTIVE BASE
YEARS
LD 925 ndash REBASING TRENDING OF MEDIAN LIMITS
79
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
Chart1
Column2
7311
7607
816
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
2011
2013
2016
Sheet1
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Column1
Column2
2011
$ 7311
2013
$ 7607
2016
8160
Chart1
Column2
7849
8029
8896
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
2011
2013
2016
Sheet1
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Column1
Column2
2011
7849
2013
8029
2016
89
Chart1
Column2
8632
8836
10375
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
2011
2013
2016
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Column1
Column2
2011
8632
2013
8836
2016
104
CLICK TO EDIT MASTER TEXT STYLES
PEER GROUP 1 - lt= 60 BEDS PEER GROUP 2 - gt 60 BEDS
PEER GROUP 3 - HOSPITAL BASED
ROUTINE
AMOUNTS REPRESENT 110 OF CALCULATED MEDIANS (USED TO SET THE LIMIT)IN THE RESPECTIVE BASE
YEARS80
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Chart1
Column2
7348
7678
8082
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
2011
2013
2016
Sheet1
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Column1
Column2
2011
$ 7348
2013
$ 7678
2016
8082
Chart1
Column2
10104
9446
11255
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
2011
2013
2016
Sheet1
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Column1
Column2
2011
10104
2013
9446
2016
113
Chart1
Column2
7365
7541
8228
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
2011
2013
2016
Sheet1
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
Column1
Column2
2011
7365
2013
7541
2016
82
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES
1 2Supplemental wage allowance for
the year ending June 30 2019Inflation for rates for fiscal year
2019-2020 and thereafter
81
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
CLICK TO EDIT MASTER TEXT STYLES
bull ldquoHaircutrdquo supplemental wage allowancebull Inflation shortfallbull Wage supplemental allowance does not consider contract
dollarsbull Case-mix direct care add-onbull Correction to hold harmless provisionbull Timing of ldquoultrardquo high MaineCare utilization low cost facility
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES PROPOSED RULES
EFFECTIVE NOVEMBER 1 2017bull Extraordinary circumstance languagebull $350k threshold for prior approval of renovations amp new construction
now $500kbull Cost for changes in law shall be paid via supplemental payment
EFFECTIVE AUGUST 1 2018bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxes
OTHERbull Depreciation recapturebull Modified or new definitions for licensed capacity occupancy proper
interest and swap investmentsbull Computer hardware is a fixed costs Software will be considered a
routine cost 84
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
CLICK TO EDIT MASTER TEXT STYLES
OTHER CHANGES NOT IDENTIFIED IN SUMMARY LETTERbull Included in proper interest definition is a statement that retroactive
approvals for refinancings energy efficient improvements renovationsnew projects over $500k will not be allowed
bull 201 ndash Removed Stated that all costs not specifically identified as included in routine shall be capital
bull Interest payment terms cannot exceed estimated useful life of the asset being financed
bull If prior approval in writing for a refinance is not obtained the lower of actual interest paid or interest per the historical approved amortization schedule shall be allowed Also costs to refinance will be unallowable
bull The Department will not pay for swap investmentsbull Additional vehicle requests must be in writing
PNMI APPENDIX C bull Annual COLA for wagesbull Supplemental allowance for 10 of wages and benefits and taxesbull Requires test to retain 10 85
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
CLICK TO EDIT MASTER TEXT STYLES
NURSING FACILITIES PROPOSED RULESEFFECTIVE AUGUST 2 2018 UPON CMS APPROVALbull Base year definition
bull Removal of 1851 ndash ldquonecessary and proper interest on both current and capital indebtedness is an allowable costrdquo
bull Addition of ldquoallowable loanrdquo languagebull Addition of 1852 specifically excluding swaps from allowable interestbull Substantial changes to refinancing approval languagebull Changes to occupancy adjustment threshold per LD 925bull Additional language for Ultra High MaineCare Utilization payment per
LD 925 effective 070119bull New Principle 1813 ndash Supplemental Wage Allowance haircut and test
to retain the 10bull New Principle 1814 ndash Aggregate Hold Harmlessbull Remove funding adjustment language left over from LD 1776bull Changes to Community Based Specialty Nursing Facility Units language 86
CLICK TO EDIT MASTER TEXT STYLES
RESIDENTIAL CARE FACILITIES NURSING FACILITIES
Emergency rule November 20 2018Public hearing December 17 2018Comment deadline December 27 2018
Emergency rule December 4 2018 Public hearing January 2 2019Comment deadline January 12 2019
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
LD 925 FIXES AND ADDITIONAL ELEMENTS
AMEND THE PRINCIPLES OF REIMBURSEMENT TO ALLOW CERTAIN BAD DEBTS amp HEALTH INSURANCE AS A FIXEDCAPITAL COST
RESTORE BED-BANKING amp RETAIN SOFTWARE AS A FIXEDCAPITAL COST
123
EXEMPT PNMI APPENDIX C FROM SERVICE PROVIDER TAXES 4
PROPOSED LEGISLATION
89
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
RATES LETTERS AND COST REPORT IMPLICATIONS
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
PURPOSEbull Clientbull Legislative industry support
FINANCIALbull Key financial indicatorsbull BerryDunn attestation clients only
MAINECARE COST REPORTSbull Key cost report informationbull All nursing and facility-based residential care facilities in Maine
MEDICARE COST REPORTS bull Key cost report informationbull All skilled nursing facilities in the country
95
6796 6750
6780
6699
6413
6200
6250
6300
6350
6400
6450
6500
6550
6600
6650
6700
6750
6800
6850
2014 2015 2016 2017 2019
NF BEDS AVAILABLE
96
HISTORICAL AND PROJECTED TRENDS IN THE PERCENTAGE OF POPULATIONS 65 AND OLDER MAINE NEW ENGLAND AND THE UNITED STATES 2000-2030
SOURCE MAINErsquo STATE PLAN ON AGING 2016-2020 97
CLICK TO EDIT MASTER TEXT STYLES
QUESTIONS
98
CLICK TO EDIT MASTER TEXT STYLES
CONTACT US
TAMMY BRUNETTI CPA
OLGA GROSS-BALZANO CPA
2075412258tbrunettiberrydunncom
2078428025ogross-balzanoberrydunncom
2075412209dkennedyberrydunncom
DAVID KENNEDY CPALISA TRUNDY-WHITTEN CPA
2075412263ltrundyberrydunncom
2075412269solsonberrydunncom
2079915181kwareberrydunncom
SARAH OLSON
KEVIN WARE CPA
JOSEPH BYRNE CPA
2075412385jbyrneberrydunncom
2075412361mlitzberrydunncom
MATTHEW LITZ CPA
99
NFbull June 2 2017 ndash 7117 ndash 63018bull August 1 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 9740bull Supplemental wage allowance funded at 4649bull Supplemental wage allowance included contract labor and
central office and included as a single amountbull September 21 2018 ndash 7118 ndash 63019
bull Direct and routine components funded at 100bull Supplemental wage allowance funded at 6498bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull December 7 2018 ndash 8118 ndash 63019
bull Supplemental wage allowance broken out into direct and routine components and adjusted to reimburse providers over 11 vs 12 months by increasing funding to 7812 due to effective day of legislation
91
RCFbull December 6 2017 ndash 1118 ndash 63018bull June 5 2018 ndash 7118 ndash 123118
bull Normal case-mix adjusted rates and fixed costs adjustmentsbull July 23 2018 ndash 7118 ndash 123118
bull Supplemental wage allowance included contract labor and central office
bull September 17 2018 ndash 7118 ndash 123118bull Supplemental allowance adjusted to include wages and related
benefits and taxes onlybull November 29 2018 ndash 8118 ndash 123118
bull Supplemental wage allowance adjusted to reimburse providers over 11 vs 12 months due to effective date of legislation
NOTE WE HAVE NOTED OTHER ADJUSTMENTS (IE FIXED COSTS DIRECT CARE ADD-ONS HOLD HARMLESS) IN ADDITION TO THE ITEMS NOTED ABOVE 92
Implications
bull Did you rebill the rate changes (some all or none) or notCash flow implications
bull If you did not rebill did you adjust your accounting records to reflect the rate changes
bull If you did not rebill you will need to include an optional schedule to adjust Schedule J remittances received to amounts actually billed
bull Ensure you have included the correct cap amounts in the preparation of the cost report ndash whether you rebilled or not
