Payment to facilities.

In this subsection: 1. “Active treatment” has the meaning specified in 42 USC 1396r (e) (7) (G) (iii). 2. “Cost center” means a group of similar facility expenses. 3. “Facility” means a nursing home or a community-based residential facility that is licensed under s. 50.03 and that is certified by the department as a provider of medical assistance. 5. “Nursing home” has the meaning given under s. 50.01 (3). 6. “Resource Utilization Groupings” means a comparative resource utilization grouping that classifies each facility resident based on information obtained from performing, for the resident, a minimum data set assessment developed by the federal Centers for Medicare and Medicaid Services.

Payment for care provided in a facility under this subsection made under s. 20.435 (4) (b), (gm), (o), (pa), or (w) shall, except as provided in pars. (bg), (bm), and (br), be determined according to a prospective payment system updated annually by the department. The payment system shall implement standards that are necessary and proper for providing patient care and that meet quality and safety standards established under subch. II of ch. 50 and ch. 150. The payment system shall reflect all of the following: 1. A prudent buyer approach to payment for services, under which a reasonable price recognizing selected factors that influence costs is paid for service that is of acceptable quality. 2. Except as provided in subd. 3r., standards established by the department that shall be based upon allowable costs incurred by facilities in the state as available from information submitted under par. (c) 3. and compiled by the department. 3m. For each state fiscal year, rates that shall be set by the department based on information from cost reports for costs specified under par. (am) 1. bm., 4., 5m., and 6. for the most recently completed fiscal year of the facility. 3p. For all costs specified under par. (am) 1. bm., an acuity-based payment rate system to which all of the following applies: a. The system may incorporate acuity measurements under the most recent Resource Utilization Groupings methodology to determine factors for case-mix adjustment. b. Four times annually, for each facility resident who is a Medical Assistance recipient on March 31, June 30, September 30, or December 31, as applicable, the system shall determine the average case-mix index by use of the factors specified under subd. 3p. a. c. The system shall incorporate payment adjustments for dementia, behavioral needs, or other complex medical conditions. d. The system may include incentives for providing high quality of care. 3r. Flat-rate payment for all costs specified under par. (am) 1. a. and 2. 5. Consideration for special needs of facility residents. 6. Standards for capital payment that will be based upon replacement value of a facility as determined by a commercial estimator with which the department contracts and criteria and limitations as determined by the department. 7. Assurance of an acceptable quality of care for all medical assistance recipients provided nursing home care.

In determining payments for a facility under the payment system in par. (ag), the department shall consider all of the following cost centers: 1. Allowable direct care costs, including, if provided, any of the following: a. Personal comfort supplies; medical supplies; over-the-counter drugs; and nonbillable services of a ward clerk, activity person, recreation person, social worker, volunteer coordinator, teacher for residents aged 22 and older, vocational counselor for residents aged 22 and older, religious person, therapy aide, therapy assistant, and counselor on resident living. bm. Nonbillable services of a registered nurse, licensed practical nurse, and nurse aide. 2. Allowable support service costs, including the following allowable facility expenses: a. Dietary service for the provision of meals to facility residents. b. Environmental service for the provision of maintenance, housekeeping, laundry and security service. c. Allowable fuel and utility costs, including the facility expenses that the department determines are allowable for the provision of electrical service, water and sewer services, and heat. d. Allowable administrative and general costs, including costs related to the facility’s overall management and administration and allowable expenses that are not recognized or reimbursed in other cost centers and including the costs of commercial estimators approved by the department under par. (ar) 6. 4. Property tax or municipal service costs paid by the owner of the facility for the facility. 5m. Allowable interest expense of the facility, less interest income of the facility and less interest income of affiliated entities, to the extent required under the approved state plan for services under 42 USC 1396. 6. Capital payment necessary for the provision of service over time, including allowable facility expenses for suitable space, furnishings, property insurance and movable equipment for patient care.

If the bed occupancy of a nursing home is below the minimum patient day occupancy standards that are established by the department under par. (ar) (intro.), the department may approve a request by the nursing home to delicense any of the nursing home’s licensed beds. If the department approves the nursing home’s request, all of the following apply: 1. The department shall delicense the number of beds in accordance with the nursing home’s request. 2. The department may not include the number of beds of the nursing home that the department delicenses under this paragraph in determining the costs per patient day under the minimum patient day occupancy standards under par. (ar). 3. The nursing home may not use or sell a bed that is delicensed under this paragraph. 4. a. Every 12 months following the delicensure of a bed under this paragraph, for which a nursing home has not resumed licensure under subd. 5., the department shall reduce the licensed bed capacity of the nursing home by 10 percent of all of the nursing home’s beds that remain delicensed under this paragraph or by 25 percent of one bed, whichever is greater. The department shall reduce the statewide maximum number of licensed nursing home beds under s. 150.31 (1) (intro.) by the number or portion of a number of beds by which the nursing home’s licensed bed capacity is reduced under this subdivision. b. Subdivision 4. a. does not apply with respect to the delicensure of beds between October 14, 1997, and the date that is 60 days after October 14, 1997, during the period of any contract entered into by a nursing home prior to January 1, 1997, if the contract requires the nursing home to maintain its current licensed bed capacity. 5. A nursing home retains the right to resume licensure of a bed of the nursing home that was delicensed under this paragraph unless the licensed bed capacity of the nursing home has been reduced by that bed under subd. 4. The nursing home may not resume licensure of a fraction of a bed. The nursing home may resume licensure 18 months after the nursing home notifies the department in writing that the nursing home intends to resume the licensure. If a nursing home resumes licensure of a bed under this subdivision, subd. 2. does not apply with respect to that bed. 6. If subd. 4. b. applies and the nursing home later resumes licensure of a bed that was delicensed between October 14, 1997, and the date that is 60 days after October 14, 1997, the department shall calculate the costs per patient day using the methodology specified in the state plan that is in place at the time that the delicensed beds are resumed.

In determining payments for a facility under par. (ag), the department may establish minimum patient day occupancy standards for determining costs per patient day and shall apply the following methods to calculate amounts payable for the rate year for the cost centers described under par. (am): 1. For direct care costs: a. The department shall establish standards for payment of allowable direct care costs under par. (am) 1. bm., for facilities that do not primarily serve the developmentally disabled, that take into account direct care costs for a sample of all of those facilities in this state and separate standards for payment of allowable direct care costs, for facilities that primarily serve the developmentally disabled, that take into account direct care costs for a sample of all of those facilities in this state. The standards shall be adjusted by the department for regional labor cost variations. The department shall treat as a single labor region the counties of Dane, Dodge, Iowa, Columbia, Richland, Sauk, and Rock and shall adjust payment so that the direct care cost targets of facilities in Dane, Iowa, Columbia, and Sauk counties are not reduced as a result of including facilities in Dodge, Richland, and Rock Counties in this labor region. For facilities in Douglas, Dunn, Pierce, and St. Croix counties, the department shall perform the adjustment by use of the wage index that is used by the federal department of health and human services for hospital reimbursement under 42 USC 1395 to 1395ggg. b. The department shall establish the direct care component of the facility rate for each facility by comparing actual allowable direct care cost information of that facility adjusted for inflation to the standards established under subd. 1. a. c. If a facility has an approved program for provision of service to residents who have an intellectual disability, residents dependent upon ventilators, or residents requiring supplemental skilled care due to complex medical conditions, a supplement to the direct care component of the facility rate under subd. 1. b. may be made to that facility according to a method developed by the department. cm. Funding distributed to facilities for the provision of active treatment to residents with a diagnosis of developmental disability shall be distributed in accordance with a method developed by the department which is consistent with a prudent buyer approach to payment for services. 2. For support service costs, the department shall establish one or more standards for the payment of support service costs that take into account support service costs for a sample of all facilities within the state. 4. For net property taxes or municipal services, payment shall be made for the amount of the previous calendar year’s tax or the amount of municipal service costs for a period specified by the department, subject to a maximum limit as determined by the department. 6. Capital payment shall be based on a replacement value for a facility. The replacement value shall be determined by a commercial estimator contracted for by the department and paid for by the facility. The replacement value shall be subject to limitations determined by the department.

The department shall calculate a payment rate for a facility by applying the criteria set forth under pars. (ag) 1. to 5. and 7., (am) 1. bm., 4., 5m. and 6., and (ar) 1., 4., and 6. to information from cost reports submitted by the facility, as affected by any adjustment for ancillary services and materials under par. (b).

The charges for ancillary materials and services that would be incurred by a prudent buyer may be included as an adjustment to the rate determined by par. (av) when so determined by the department. The department may not authorize any adjustments to the rate established under par. (av) to pay for a cost overrun that the department fails to approve under s. 150.11 (3). Ancillary materials and services for which payment may be made include, if provided, oxygen, medical transportation and laboratory and X-ray services. Payment for these services and materials shall not exceed medical assistance limitations for reimbursement of the services and materials. For services in a facility for which the department may make payment to a service provider other than a facility, the department may make payment to the facility but not in excess of the estimated amount of payment available if a separate service provider provided the service. The department may promulgate rules setting forth conditions of and limitations to this paragraph.

Except as provided in par. (bo), the department may establish payment methods for a facility for which any of the following applies: 1. The facility is newly constructed. 2. The total of licensed beds for the facility has significantly increased or decreased prior to calculation of its rate under the payment system. 3. The facility has undergone a change in certification or licensure level. 5. The facility has received approval or disapproval for provision of service to residents requiring supplemental skilled care due to complex medical conditions. 6. The facility has received approval or been disapproved for provision of service to residents who have any of the following: a. Brain injury, as defined in s. 51.01 (2g). b. A diagnosis of acquired immunodeficiency syndrome. c. An HIV infection, as defined in s. 252.01 (2), and illness or injury associated with the development of acquired immunodeficiency syndrome.

The department may establish payment methods for capital payment for a newly constructed facility that first provided services after June 30, 1984.

Notwithstanding pars. (am) 6. and (ar) 6., the department may establish payment methods based on actual costs for capital payment for a facility to which, after December 31, 1982, any of the following applies: 1. The facility was constructed. 2. The facility was purchased. 3. The facility incurred annual remodeling costs of more than $600,000. 4. The facility incurred remodeling costs necessary to meet physical plant requirements under 42 USC 1396a (a) (13) (A).

If the federal department of health and human services disallows use of the allocation of matching federal medical assistance funds under applicable federal acts or programs for the reduction of operation deficits under sub. (6u), all of the following apply: 1. Notwithstanding s. 20.435 (7) (b) or 20.437 (1) (cj) or (q) or (2) (dz), the department shall reduce allocations of funds to counties in the amount of the disallowance from the appropriation account under s. 20.435 (7) (b), or the department shall direct the department of children and families to reduce allocations of funds to counties or Wisconsin Works agencies in the amount of the disallowance from the appropriation account under s. 20.437 (1) (cj) or (2) (dz), in accordance with s. 16.544 to the extent applicable. 2. If a city, village or town owns and operates a facility that has received funds to reduce an operating deficit, the city, village or town shall reimburse the county in which the city, village or town is located in the amount of funds so received.

As a condition of payment under this section a facility shall: 1. Meet the staffing standard requirements for direct care costs including the supplement, if any, made under par. (ar) 1. c. and maintain such records as prescribed by the department to document that such level of care was actually provided. 2. Provide at the time of a patient’s admission to a home, for the development and implementation of a rehabilitation plan including the development of an alternate care plan for the patient. 3. Provide, upon request, cost information relating to the overall financial operation of the facility, including, but not limited to wages and hours worked, costs of food, housekeeping, maintenance and administration. 4. Agree to admit patients 7 days of the week. 5. Admit only patients if required under s. 50.035 (4n) or 50.04 (2h), who have been referred to a resource center. 6. Provide, upon request, such information as the department considers necessary to determine allowable interest expenses under par. (am) 5m.

The department shall: 2. Terminate payment to a facility for a patient, unless a utilization review team established pursuant to federal regulations upon review of the patient’s needs and the implementation of a rehabilitation plan for that patient determines that the patient’s need for care and services can only be provided in a facility and determines the appropriate level of care. 3. Establish, maintain, and periodically update a patient needs evaluation system to be used in determining the need and level of care at a facility, which shall include the social and rehabilitative needs of the patient, provide levels of care to correspond to the actual staff time required to provide such care, and define the contents of the services to be provided. 4. Periodically audit all nursing homes and intermediate care facilities receiving funds under this paragraph, and recover payments made where the home is not meeting the conditions under which the payment was made as specified in par. (c) 1. and 2. Erroneous information provided under par. (c) 3. shall constitute grounds for recovery. 5. Beginning October 1, 1989, deny payment to a facility for a patient who is admitted to the facility after the department has provided newspaper notice and notice under s. 50.03 (2m) (b) that the facility violates 42 USC 1396 to 1396s and before the date, if any, that the department determines that the facility is in substantial compliance with 42 USC 1396 to 1396s.

Payment under this section to a facility may not include the cost of care reimbursable for persons eligible for medicare benefits under 42 USC 1395 to 1395zz. Medical assistance recipients are not liable for these costs. The department may require that a facility recover these costs from the appropriate agencies. The department may, by rule, require medicare certification under 42 USC 1395 to 1395zz, in whole or in part, of skilled nursing facilities. Any intermediate care facility or skilled nursing facility is subject to a fine of not less than $10 nor more than $100 for each day it refuses to recover costs or refuses to obtain the required certification.

The department may require by rule that all claims for payment of services provided facility residents under this subchapter be submitted or countersigned by the respective facility administrator. The department may specify those categories of services for which payment will be made only if the services are rendered or authorized in writing by a primary health care provider designated by the recipient for the particular category of services.

1. On or after October 1, 1981, medical assistance payment for inpatient nursing care may only be provided for persons receiving skilled, intermediate, or limited levels of nursing care as these levels are defined under s. DHS 132.13, Wis. Adm. Code. 2. Payment for personal or residential care is available for a person in a facility certified under 42 USC 1396 to 1396p only if the person entered a facility before the date specified in subd. 1. and has continuously resided in a facility since the date specified in subd. 1. If the person has a primary diagnosis of developmental disabilities or serious and persistent mental illness, payment for personal or residential care is available only if the person entered a facility on or before November 1, 1983.

The department may develop a separate rate of payment, under this subsection, for persons requiring intense skilled nursing care, as defined by the department.

Notwithstanding pars. (ag) to (b), (bp) and (br), the department may participate in a demonstration project on case mix nursing home reimbursement authorized under 42 USC 1315 (a) and may modify the payment system under this section, on an experimental basis, as necessary for participation in the demonstration project.

For purposes of s. 46.277 (5) (e), the department shall, by July 1 annually, determine the statewide medical assistance daily cost of nursing home care and submit the determination to the department of administration for review. The department of administration shall approve the determination before payment may be made under s. 46.277 (5) (e).

To hold a bed in a facility, the department may pay the full payment rate under this subsection for up to 30 days for services provided to a person during the pendency of an undue hardship determination, as provided in s. 49.453 (8) (b) 3.