Section 641-1.1. [Applicability] Rate Setting For Non-State Providers

[On or after November 1, 2014] R[r]ates of reimbursement for residential habilitation services provided in community residences, including IRAs, and for day habilitation services, other than those provided by OPWDD, shall be determined in accordance with [this Subpart] Title 10 NYCRR 86-10.The rates of payment made for services rendered to title XIX recipients established in accordance with the methodology contained in this Title10 NYCRR Part 86-10 shall be contingent upon Federal financial participation (FFP) and approval.

Existing Sections 641-1.2 – 641-1.4 are REPEALED

Existing Section 635-4.4(c) is amended to read as follows:

(c) A provider may make a written request for a waiver of reduction in reimbursement due to extraordinary and/or unforeseeable circumstances beyond its control, such as a natural disaster, or other circumstance as determined by the OPWDD commissioner, which will prevent it from filing the cost report by the due date. The application must contain detailed facts supporting the request, describe the extraordinary and/or unforeseeable circumstances and explain why the provider believes such circumstances will prevent it from filing the cost report by the due date

Existing clause 635-10.4(d)(4)(vii)(e) is amended to read as follows:

(e) Environmental modifications are selected internal and external changes to a person’s physical home environment, required by the person’s individualized service plan, which provide appropriate site accommodations to meet the person’s fire safety evacuation needs identified pursuant to clause (a)(3)(i)(d) of this section, and which are necessary to ensure the health, welfare and safety of the person or which enable him or her to function with greater independence in the home and without which the person’s continued residence could be jeopardized. A given environmental modification(s) will be provided on a limited one-time only installation/construction basis to a given residence to the extent necessary to enable people with physical infirmities and disabilities to live safely in community homes outside the institutional setting. Nothing herein shall preclude additional environmental modifications at the same site at a time in the future, if the person’s needs substantially change; or at a new site if the move was due to causes beyond the person’s control; or was programmatically justified (e.g., the person chose to live at a greater level of independence). Allowable modifications are subject to limits set in the HCBS Waiver and include:

Existing clause 635-10.4(d)(4)(vii)(f) is amended to read as follows:

(f) Adaptive technologies are those devices, aids, controls, appliances or supplies of either a communication or adaptive type, determined necessary to enable the person to increase his or her ability to function in a home and community-based setting with independence and safety. The equipment, whether of a communication or adaptive type, must be documented in the person’s individualized service plan as being essential to the person’s habilitation, ability to function, or safety (including fire safety evacuation needs); are subject to limits set in the HCBS Waiver; and have an essential relationship to support/maintain (or obtain) the person’s current or desired residence.

1. Statutory Authority:

a. The Department of Health (DOH) is the single state agency to supervise the administration of the medical assistance plan, known as Medicaid, 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.

b. The Office for People With Developmental Disabilities (OPWDD) has the statutory responsibility to provide and encourage the provision of appropriate programs, supports, and services in the areas of care, treatment, habilitation, rehabilitation, and other education and training of persons with intellectual and developmental disabilities, as stated in Mental Hygiene Law (MHL) Section 13.07.

c. OPWDD has the statutory authority to adopt rules and regulations necessary and proper to implement any matter under its jurisdiction as stated in MHL Section 13.09(b).

d. OPWDD has the statutory authority to adopt regulations concerned with the operation of programs and the provision of services, as stated in MHL Section 16.00. The regulation also ensures compliance by OPWDD certified and operated residences with the proper provision of services.

e. OPWDD and DOH have 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.

2. 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 14 New York Codes Rules and Regulations (NYCRR) Subparts 635-10.4, 641-1, and 635-4.4, 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.

3. 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.

4. Costs:

a. 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. Chapter 58 of the Laws of 2005 places a cap on the local share of Medicaid costs and local governments are already paying for Medicaid at the capped level.

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

b. 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.

5. 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.

6. Paperwork: The proposed amendments would not increase paperwork requirements.

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

8. Alternatives: The proposed amendments would conform the regulations to changes approved by CMS in the approved waivers and State Plan Amendments. No alternatives were considered.

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

10. Compliance Schedule: Regulated parties are expected to comply with the proposed regulations when they become effective.

1. Effect of Rule:

a. 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 will conform OPWDD regulations to the publicly noticed HCBS Waiver amendment, 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 situations 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).

2. Compliance Requirements: These regulations will not require additional reporting or compliance requirements.

3. Professional Services: This rule would only apply to a small number of local governments that deliver day habilitation 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.

4. Compliance Costs:

a. 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.

5. 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.

6. Minimizing Adverse Impact: OPWDD considered other potential regulatory revisions in lieu of these amendments that were approved through a federal CMS waiver amendment. OPWDD 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. OPWDD continually reviews regulations as affected by the HCBS Waiver, to assess the impact of these changes.

7. 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. Providers impacted to these changes were provided with opportunities to comment on OPWDD’s public notice of the submission for the HCBS Waiver amendment, approved by CMS, and during two webinar presentations (June 4, 2020), which provided an overview of the proposed Waiver amendments.

8. Establishment or Modification of Penalties: The rule does not modify or establish any new penalties.

9. Initial Review of the Rule: OPWDD will again review the rule within the third calendar year after filing.

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 14 NYCRR Parts 635-10.4, 641-1, and 635-4.4 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 14 NYCRR Parts 635-4.4, 641-1, and 635-10.4 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 new compliance requirements for providers. The regulation will not have a substantial impact on jobs or employment opportunities in New York State.