AGING AND DISABILITY SERVICES ADMINISTRATION

January 3, 2001

AASA NH# 01-001

Re: January 1, 2001 Adjusted Medicaid Payment Rate

Notification of Noncapital Portion of Budget Dial

Dear Nursing Home Administrator:

The Rate Computation Worksheet for your facility?s January 1, 2001 adjusted Medicaid payment rate is enclosed.

The January 1, 2001 adjusted rate is calculated using the same data used to calculate your facility?s July 1, 2000 Medicaid payment rate.? The only exception is that the January 1, 2001 adjusted rate was calculated using your facility?s Medicaid Average Case Mix Index (with defaults) from the 3rd Quarter of 2000 (July through September 2000) final RUG report.? Your facility?s July 1, 2000 rate was calculated using your facility?s Medicaid Average Case Mix (with defaults) from the 1st Quarter of 2000 (January through March 2000) final RUG report.

If a timely appeal of the facility?s July 1, 2000 rate was filed with the department and not yet resolved, any change to adjustments made as a result of this appeal will be brought forward to the facility?s January 1, 2001 adjusted rate.

Enclosed you will also find a 3rdQuarter 2000 final RUG report.

RCW 74.46.421 (5) (b) states, in part, ?If the department determines that the weighted average nursing facility payment rate for the noncapital portion of the rate calculated in accordance with this chapter is likely to exceed the weighted average nursing facility payment rate for the noncapital portion of the rate identified in the biennial appropriations act, then the department shall adjust all nursing facility direct care, therapy care, support services, operations, and variable return payment rates proportional to the amount by which the weighted average rate allocation would otherwise exceed the budgeted noncapital portion of the rate amount.?

This part of this letter provides notice that the dial has been exceeded, but the amount is small enough that the department is deferring implementation of the rate reductions.? The deferral is based on the fact that future Case Mix scores could lower the projected annual average rate.

Future notice regarding the budget dial implementation will follow as the department determines the effects of the January 1, 2001 adjusted Medicaid payment rates on the projected annual average rate.

Please call your Medicaid rate analyst or Jim Lochner, Nursing Home Rates Section Manager, at (360) 725-2466 if you have any questions about this letter.

Sincerely,

Tom Kearns, Chief

Office of Rates Management

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Enclosures