OPWDD’s proposed regulatory amendments are necessary due to the approval of an amendment to OPWDD’s Comprehensive Home and Community-Based Services (HCBS) 1915(c) Waiver by the Centers for Medicare and Medicaid Services. These proposed regulations amend Title 10 NYCRR Subpart 86-10 to change calculations of the occupancy adjustment for Individualized Residential Alternatives (IRAs) by eliminating the adjustment based on a system-wide assessment of vacancy utilization and limiting reimbursement for periods when individuals are not present in those residences. There are also changes to conform the regulations for OPWDD waiver services to the approved HCBS waiver agreement with the federal Centers for Medicare and Medicaid Services.

Specifically, Subpart 86-10.2 is amended to make changes to several defined terms in the rate methodology used to set reimbursement rates for IRAs. These definition changes include: a change setting the occupancy adjustment for IRA rates to zero beginning on May 1, 2021; a change limiting reimbursement for retainer days to 50 percent of a provider’s established rate; and a change limiting the number of therapy days the provider may bill each year to 96 days per individual and limiting reimbursement to 50% of the provider’s established rate.

Subpart 86-10.3 is amended to conform the language of certain terms in the rate-setting methodology to the language used in the approved HCBS waiver. Subpart 86-10.5 adds conforming language regarding the April 1, 2015 direct support professionals’ compensation increase. Subpart 86-10.6 amends a reimbursement section to operationalize the changes to the occupancy adjustment, retainer days, and therapy days described above.

Statutory Authority:

The Department of Health (DOH) is the single state agency to supervise the administration of the medical assistance plan, under title XIX of the federal Social Security Act, known as Medicaid in this state, and is authorized to promulgate regulations to implement the Medicaid program, as stated in Social Services Law (SSL) Sections 363-a, 365-a(2)(c), and 365-n(7); and Public Health Law (PHL) Sections 201(1)(v) and 206.

DOH has the statutory authority to develop rate setting methodologies and to promulgate rules and regulations regarding rate setting methodologies applying to facilities under the jurisdiction of OPWDD, pursuant to Mental Hygiene Law Section 43.02.

Legislative Objectives:

The proposed regulations further legislative objectives embodied in MHL sections 13.07, 13.09(b), 16.00, and 43.02; PHL sections 201(1)(v) and 206; and SSL sections 363-a, 365-a(2)(c), and SSL 365-n (7). These proposed regulations amend Title 10 New York Codes Rules and Regulations (NYCRR) Subpart86-10, to amend calculations of the occupancy adjustment for Individualized Residential Alternatives by eliminating the adjustment based on a system-wide assessment of vacancy utilization and limiting reimbursement for periods when individuals are not present in those residences. There are also changes to conform the regulations for OPWDD waiver services to OPWDD’s approved waiver agreement with the federal Centers for Medicare and Medicaid Services.

Needs and Benefits:

These changes are necessary to reflect historical utilization and efficiencies, and to make other operational, technical and streamlining changes to conform the identified regulations to the approved waiver agreement and the State Plan. These targeted actions are designed to preserve Medicaid funding for direct service delivery to individuals with developmental disabilities by reducing payments to residential providers for periods when the individual is away from the residence. These periods are known as retainer days, reserved bed days, therapy days, and leaves of absence.

Costs:

Costs to the Agency and to the State and its Local Governments:

There is an anticipated reduction on Medicaid expenditures as a result of the proposed regulations, resulting in approximately $103.8 million in gross Medicaid (federal and state) savings.

These regulations will not have any fiscal impact on local governments, as the contribution of local governments to Medicaid has been capped by Chapter 58 of the Laws of 2005.

There are no anticipated costs to OPWDD in its role as a provider of services to comply with the new requirements.

Costs to Private Regulated Parties:

The elimination of the occupancy adjustment, and the reduction of retainer day, reserved bed day, therapy day, and leave of absence payments will impose varying costs to regulated facilities based on the volume and length of reserved bed days within their facilities. For all affected OPWDD facilities, the aggregate impact is estimated to be approximately $103.8 million annually.

Local Government Mandates:

This rule would only apply to a small number of local governments that deliver these services via a local department of social services. There are no new requirements imposed by the rule on any other county, city, town, village; or school, fire, or other special district.

Paperwork:

The proposed amendments would not increase paperwork requirements.

Duplication:

The proposed regulations do not duplicate any existing State or Federal requirements on this topic.

Alternatives:

The proposed amendments would conform the regulations to changes approved by CMS in the approved waivers and State Plan Amendments. The alternative would be to maintain existing regulations; however, this alternative was rejected as it would be inconsistent with Budget actions negotiated with the Legislature as well as the waiver provisions approved by CMS.

Federal Standards:

The proposed amendments do not exceed any minimum standards of the federal government for the same or similar subject areas.

Compliance Schedule:

Regulated parties are expected to comply with the proposed regulations when they become effective.

Effect of Rule:

This regulation would apply to OPWDD voluntary providers who deliver day habilitation and/or residential habilitation services pursuant to OPWDD’s Home and Community Based Services 1915(c) Comprehensive Waiver agreement (HCBS Waiver) with the federal Centers for Medicare and Medicaid Services (CMS). OPWDD has determined, through a review of the certified cost reports, that many OPWDD-funded services are provided by not-for-profit agencies which employ more than 100 people. Smaller agencies that employ fewer than 100 employees are classified as small businesses. OPWDD is unable to estimate the number of agencies that may be considered to be small businesses.

This rule would only apply to a small number of local governments that deliver day habilitation services via a local department of social services. Furthermore, this action would conform the state’s regulations to the HCBS Waiver amendment that was previously publicly noticed and later approved by CMS with an effective date of October 1, 2020. The approved HCBS Waiver amendment revised the rate setting methodology for calculating the occupancy adjustment for Residential Habilitation services by eliminating the adjustment based on a system-wide assessment of vacancy utilization. The amendment also limited reimbursement in certain situation in which individuals are not present in the residence by limiting the amount of reimbursement that providers can receive for “therapy days” (defined as days when the individual is away from the supervised residence for the purpose of a visiting with family or friends, or a vacation) and “retainer days” (defined as days of Medical leave or where any other institutional or in-patient Medicaid payment is made for providing services to the beneficiary).

Compliance Requirements:

These regulations will not require additional reporting or compliance requirements.

Professional Services:

This rule would only apply to a small number of local governments that deliver these services via a local department of social services. Entities that provide affected services will not require additional professional services as they all already have compliance managers or staff tasked with following other OPWDD regulations.

Compliance Costs:

There will be no additional compliance costs. There is an anticipated reduction on Medicaid expenditures as a result of the proposed regulations, resulting in approximately $103.8 million in Medicaid (Federal and state) savings.

Economic and Technological Feasibility:

The entities required to comply with this rule already have the technological capability to comply with this rule. Additionally, there are no extra costs for compliance.

Minimizing Adverse Impact:

OPWDD and DOH considered other potential rate actions in lieu of the instant actions that were approved via CMS. OPWDD and DOH concluded that these regulatory amendments are appropriate to maintain reimbursement in direct care services, rather than in situations when an individual is not receiving services from a provider. DOH continually reviews regulations as affected by the HCBS Waiver, to assess the impact of these changes.

Small Business and Local Government Participation:

This rule would only apply to a small number of local governments that deliver day habilitation services via a local department of social services. Regulated entities impacted by these changes were provided with opportunities to comment on OPWDD’s public notice of the submission for the HCBS Waiver amendment. After public comment DOH and Office for People With Developmental Disabilities (OPWDD) held stake holder meetings on June 4, 2020, open to the public, to walk through the changes being made to the Waiver. Following the approval of the waiver by the Centers for Medicaid Services (CMS) on September 28, 2020, the Waiver and the response to public comment were published on OPWDD’s web page.

A Rural Area Flexibility Analysis for these amendments is not being submitted because the regulation will not impose any disproportionate adverse impact or significant reporting, record keeping or other compliance requirements on public or private entities in rural areas, as these are changes to rate methodologies under a federal program, requiring equitable application across all providers. There are no professional services, capital, or other compliance costs imposed on public or private entities in rural areas as a result of the proposed regulation.

The proposed regulation amends 10 NYCRR Part 86-10 to amend calculations of the occupancy adjustment for Individualized Residential Alternatives by eliminating the adjustment based on a system-wide assessment of vacancy utilization and limiting reimbursement for periods when individuals are not present in those residences. There are also changes to conform the regulations for OPWDD waiver services to OPWDD’s approved waiver agreement with the federal Centers for Medicare and Medicaid Services. The regulation will not result in an adverse impact on rural communities because the regulation applies to all providers of these services.

A Job Impact Statement for the proposed regulation is not being submitted because it is apparent from the nature and purpose of the regulation that they will not have a substantial adverse impact on jobs and/or employment opportunities.

The proposed regulation amends 10 NYCRR Part 86-10 to amend calculations of the occupancy adjustment for Individualized Residential Alternatives by eliminating the adjustment based on a system-wide assessment of vacancy utilization and limiting reimbursement for periods when individuals are not present in those residences. The regulation will not result in new compliance requirements for providers. The regulation will not have a substantial impact on jobs or employment opportunities in New York State.