SENATE BILL 97042
BY SENATORS Rizzuto, Arnold, Hernandez, Hopper, Johnson, Lacy, Martinez, Matsunaka, Mutzebaugh, Norton, Reeves, Rupert, and Wham;
also REPRESENTATIVES Owen, Allen, Bacon, Hagedorn,
Mace, Reeser, and Schwarz.
CONCERNING THE RATE SETTING METHODOLOGY FOR REIMBURSEMENT
OF NURSING FACILITIES PROVIDING SERVICES THROUGH THE MEDICAID
PROGRAM, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. 264410 (4),
Colorado Revised Statutes, 1989 Repl. Vol., as amended, is amended
BY THE ADDITION OF THE FOLLOWING NEW PARAGRAPHS to read:
264410. Providers
nursing facility nursing facility patient program improvement
fund reimbursement maximum allowable quality
of care incentive payment program
legislative declaration repeal. (4) (d) (I) THE
GENERAL ASSEMBLY FINDS THAT THE HISTORICAL GROWTH IN NURSING FACILITY
RATES HAS SIGNIFICANTLY EXCEEDED THE RATE OF INFLATION. THESE
INCREASES HAVE BEEN CAUSED IN PART BY THE INCLUSION OF MEDICARE
COSTS IN MEDICAID COST REPORTS. THE STATE OF COLORADO HAS AN INTEREST
IN LIMITING THESE EXCEPTIONAL INCREASES IN MEDICAID NURSING FACILITY
RATES BY IMPOSING GROWTH CEILINGS ON NURSING FACILITY RATES, INSTITUTING
A CASEMIX REIMBURSEMENT SYSTEM, REMOVING MEDICARE PART B
COSTS FROM THE MEDICAID NURSING FACILITY RATES, AND IMPOSING A
CEILING ON THE MEDICARE PART A ANCILLARY COSTS WHICH ARE INCLUDED
IN CALCULATING MEDICAID NURSING FACILITY RATES.
(II) NOTWITHSTANDING ANY OTHER PROVISION
IN THIS ARTICLE, THE FOLLOWING LIMITATIONS SHALL APPLY TO RATES
FOR REIMBURSEMENT OF NURSING FACILITIES:
(A) FOR ALL RATES EFFECTIVE ON OR AFTER
JULY 1, 1997, FOR EACH CLASS I AND CLASS V FACILITY, ANY INCREASE
IN ADMINISTRATIVE COSTS SHALL NOT EXCEED SIX PERCENT PER YEAR
AND ANY INCREASE IN HEALTH CARE SERVICES COSTS SHALL NOT EXCEED
EIGHT PERCENT PER YEAR; AND
(B) FOR ALL RATES EFFECTIVE ON OR AFTER
JULY 1, 1997, FOR EACH CLASS I AND CLASS V FACILITY, ONLY SUCH
COSTS AS ARE REASONABLE, NECESSARY, AND PATIENTRELATED MAY
BE REPORTED FOR REIMBURSEMENT PURPOSES. NURSING FACILITIES MAY
INCLUDE WHATEVER LEVEL OF MEDICARE PART A ANCILLARY COSTS WAS
INCLUDED AND ALLOWED IN THE FACILITY'S LATEST MEDICAID COST REPORT
FILED PRIOR TO JULY 1, 1997. ANY SUBSEQUENT INCREASE IN THIS AMOUNT
SHALL BE LIMITED TO EITHER THE INCREASE IN THE FACILITY'S ALLOWABLE
MEDICARE PART A ANCILLARY COSTS OR THE PERCENTAGE INCREASE IN
THE COST OF MEDICAL CARE REPORTED IN THE UNITED STATES DEPARTMENT
OF LABOR BUREAU OF LABOR STATISTICS CONSUMER PRICE INDEX FOR THE
SAME TIME PERIOD, WHICHEVER IS LOWER. PART B COSTS FOR MEDICARE
SHALL BE EXCLUDED FROM THE ALLOWABLE REIMBURSEMENT FOR FACILITIES.
(III) THE SPECIFIC METHODOLOGY FOR CALCULATING
THE LIMITATIONS AND COST REPORTING REQUIREMENTS DESCRIBED IN THIS
PARAGRAPH (d) SHALL BE ESTABLISHED BY RULES PROMULGATED BY THE
STATE DEPARTMENT.
(e) (I) THE STATE DEPARTMENT IS AUTHORIZED
TO UTILIZE A CASEMIX SYSTEM FOR REIMBURSING SOME OR ALL
OF COLORADO'S CLASS I AND CLASS V MEDICAID NURSING FACILITIES.
A CASEMIX REIMBURSEMENT SYSTEM REIMBURSES EACH FACILITY
ACCORDING TO THE RESOURCE CONSUMPTION IN TREATING ITS CASE MIX
OF MEDICAID RESIDENTS, WHICH MAY INCLUDE SUCH FACTORS AS THE AGE,
HEALTH STATUS, RESOURCE UTILIZATION, AND DIAGNOSES OF THE FACILITY'S
MEDICAID RESIDENTS.
(II) A CASEMIX REIMBURSEMENT SYSTEM
SHALL BE INSTITUTED IF THE STATE DEPARTMENT AND THE JOINT BUDGET
COMMITTEE OF THE COLORADO GENERAL ASSEMBLY DETERMINE PRIOR TO
IMPLEMENTATION THAT SUCH A REIMBURSEMENT SYSTEM WILL NOT INCREASE
STATE EXPENDITURES FOR NURSING FACILITY CARE.
(III) THE ADMINISTRATIVE COSTS FOR IMPLEMENTING
A CASEMIX REIMBURSEMENT SYSTEM SHALL BE PAID FROM THE SAVINGS
THAT RESULT FROM THE PROVISIONS IN PARAGRAPH (d) OF THIS SUBSECTION
(4).
(IV) THE STATE DEPARTMENT AND THE STATE
BOARD SHALL PROMULGATE SUCH RULES AS MAY BE NECESSARY TO IMPLEMENT
A CASEMIX REIMBURSEMENT SYSTEM.
(V) THE STATE DEPARTMENT SHALL REPORT
TO THE JOINT BUDGET COMMITTEE AND TO THE HEALTH, ENVIRONMENT,
WELFARE, AND INSTITUTIONS COMMITTEES OF THE GENERAL ASSEMBLY NO
LATER THAN NOVEMBER 1, 1997, CONCERNING THE FOLLOWING:
(A) THE STATUS OF THE STATE DEPARTMENT'S
EFFORTS TO DEVELOP A CASEMIX REIMBURSEMENT SYSTEM;
(B) THE FEASIBILITY OF IMPLEMENTING A
CASEMIX REIMBURSEMENT SYSTEM BY JULY 1, 1998; AND
(C) THE IMPACT UPON MEDICAID NURSING FACILITY
RATES CAUSED BY THE INCLUSION OF MEDICARE COSTS IN MEDICAID COST
REPORTS.
SECTION 2. Appropriation in long bill to be adjusted.
(1) For the implementation of this act, appropriations
made in the annual general appropriation act to the department
of health care policy and financing, for the fiscal year beginning
July 1, 1997, shall be adjusted as follows:
(a) The appropriation to medical programs,
administration is increased by seven hundred fiftytwo thousand
four hundred seventynine dollars ($752,479), and 1.0 FTE.
Of said sum, three hundred seventysix thousand two hundred
forty dollars ($376,240) shall be from the general fund and shall
be subject to the "M" notation as defined in the general
appropriation act, and three hundred seventysix thousand
two hundred thirtynine dollars ($376,239) shall be from
matching federal funds.
(b) The appropriation to medical programs,
medical services is decreased by fifteen million seven hundred
thirtyseven thousand four hundred twentyfive dollars
($15,737,425). Of said sum, seven million five hundred fortynine
thousand two hundred fortythree dollars ($7,549,243) shall
be from the general fund and eight million one hundred eightyeight
thousand one hundred eightytwo dollars ($8,188,182) shall
be from federal funds.
SECTION 3. Safety clause.
The general assembly hereby finds, determines, and declares that
this act is necessary for the immediate preservation of the public
peace, health, and safety.
____________________________ ____________________________
Tom Norton Charles E. Berry
PRESIDENT OF SPEAKER OF THE HOUSE
THE SENATE OF REPRESENTATIVES
____________________________ ____________________________
Joan M. Albi Judith M. Rodrigue
SECRETARY OF CHIEF CLERK OF THE HOUSE
THE SENATE OF REPRESENTATIVES
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE OF COLORADO