N.Y. Comp. Codes R. & Regs. tit. 14 § 577.7
Current through Register Vol. 46, No. 43, October 23, 2024
(a) Payment rates shall be established on a prospective basis effective January 1, 1992 and each January 1st thereafter, except that the rate of payment effective January 1, 2012 through December 31, 2012, and January 1, 2013 through December 31, 2013, shall be a continuance of the rate of payment effective December 31, 2011, and shall be provisional pending the completion of an audit in accordance with section 577.6 of this Part.(b) Payment rates are computed on a per diem basis by dividing allowable costs by allowable patient days. Allowable patient days shall not exceed a maximum utilization of 98 percent of certified capacity. The allowable costs and patient days shall include the cost of psychiatric inpatient and related ancillary services, and as applicable, the cost of alcoholism inpatient and related ancillary services.(c) Allowable costs are determined from hospital cost reports, as defined in section 577.5 of this Part, subject to the following priority of definitions of allowable cost: (2) allowable costs under Federal Medical Assistance Program;(3) allowable cost under the Medicare Program;(4) generally accepted accounting principles; and(5) as determined by audit in accordance with section 577.6 of this Part.(d) For any rate year, operating and capital costs are determined from the allowable costs in the base year. The base year is the year two years prior to the rate year.(e) Operating costs from the base year are subject to a cost limitation. The limitation is the allowable costs one year prior to the base year, increased by inflation for one year. (1) Allowable operating costs in the rate year are calculated by choosing the lower of the base year cost computed on a per diem basis or the limitation cost computed on a per diem basis, and trending this amount forward two years by the inflation factor, except for the rate period effective January 1, 2010 to December 31, 2010, when the inflation factor used to trend costs will be limited to the inflation factor for the first year of the two-year period, and the rate period effective January 1, 2014, to December 31, 2014, when there will be no inflation factor used to trend costs. Administration costs, as contained in and part of operating costs, shall be subject to an administrative cost screen. Two separate administrative cost screens shall be calculated, one for hospitals with greater than 100 beds (group one), and one for hospitals with 100 or less beds (group two). The administrative cost screen is derived from the costs in the fiscal year one year prior to the base year (i.e., the same cost year from which the limitation is derived), and shall be the group average per diem cost plus 10 percent.(2) The inflation factor is the Medicare inflation factor for hospitals and units excluded from the prospective payment system.(f) Capital costs which are the allowed costs from the base year, as defined in subdivision (d) of this section, are the capital related costs as reported in the hospital financial reports. Interest and depreciation costs associated with all asset acquisitions are subject to approval under Part 551 of this Title. No capital expenditure for which approval by the Office of Mental Health is required under the applicable provisions of the Mental Hygiene Law or Part 551 of this Title shall be included in allowable capital costs for purposes of computing a rate of payment unless such approval shall have been secured. Capital costs are computed on a per diem basis.(g) Allowed days are the patient days applicable to the costs for psychiatric and, if applicable, alcoholism inpatient services, as defined in section 577.4(f) of this Part.(h) Payment rates for new hospitals which have no prior cost experience from which to establish base year costs and a cost limitation, as defined in subdivision (e) of this section, shall be determined as follows:(1) Payment rates shall be for the time period as approved in a financial plan submitted by the hospital and approved by the commissioner under Part 551 of this Title.(2) Allowed capital costs during the period of the financial plan will be computed based upon the approved budgeted capital costs, divided by the approved budgeted patient days for the rate year, and retroactively adjusted to actual certified cost divided by the higher of actual patient days or approved budgeted patient days. Capital costs are subject to the provisions of subdivision (f) of this section.(3) Operating costs during the period of the financial plan will be the lower of the approved budgeted operating costs divided by the approved budgeted patient days or 110 percent of the statewide weighted average of the operating cost per diem of all private psychiatric hospitals for which the Office of Mental Health promulgates rates of payment pursuant to this Part.(4) The operating cost component of the rate will be updated annually, except for the period January 1, 2010 to December 31, 2010, and the period January 1, 2014, to December 31, 2014, with the Medicare inflation factor for hospitals and units excluded from the prospective payment system, until the hospital has operated for six months at a minimum occupancy level of at least 75 percent and files its first cost report for that same period in accordance with section 577.5 of this Part.(5) The actual cost report data will be used to establish the rate of payment for that hospital on a retroactive basis to the period covered by the hospital cost report. If the resulting rate of payment is higher than the per diem costs approved in the financial plan, the hospital will continue on the budget based method described in paragraphs (1)-(4) of this subdivision, until such time as the hospital submits subsequent financial reports and the methodology in subdivision (e) of this section can be applied.N.Y. Comp. Codes R. & Regs. Tit. 14 § 577.7
Amended, New York State Register March 19, 2014/Volume XXXVI, Issue 11, eff. 3/19/2014