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 Virginia Administrative Code (Last Updated: January 10, 2017)
 Title 12. Health
 Agency 30. Department of Medical Assistance Services
 Chapter 90. Methods and Standards for Establishing Payment Rates for Long-Term Care

  Section 310. Normalized Case Mix Index (NCMI)  

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  • Appendix V. Normalized Case Mix Index

    A. This appendix illustrates how a specialized care provider's Normalized Case Mix Index (NCMI) is used to adjust the prospective routine operating cost base rate and prospective operating ceiling.

    B. Assumptions.

    1. The nursing facility's fiscal years are December 31, 1996, and December 31, 1997.

    2. The average allowable routine nursing labor and nonlabor base rate for December 31, 1996, is $205.

    3. The average allowable indirect patient care operating base rate for December 31, 1996, is $90.

    4. The allowance for inflation is 3.0% for the fiscal year end beginning January 1, 1997.

    5. The nursing facility's statewide ceiling for the fiscal year end beginning January 1, 1997, is $300.

    6. The nursing facility's normalized HCFA nursing wage index is 1.0941 for the fiscal year end beginning January 1, 1997.

    7. The nursing facility's semiannual normalized NCMIs are as follows:

    1996 First semiannual NCMI

    1.2000

    1996 Second semiannual NCMI

    1.2400

    1997 First semiannual NCMI

    1.2600

    C. Calculation of nursing facility's operating ceiling.

    1. Period January 1, 1997, through June 30, 1997.

    FYE 1997 Statewide Ceiling

    $300

    Nursing Labor Component Percentage

    x 67.22%

    = $201.66

    Normalized Wage Index

    x 1.0941

    Adjusted Nursing Labor Ceiling Component

    = $220.64

    Nursing Nonlabor Ceiling Component

    + $11.49

    Adjusted Nursing Labor and Nonlabor Ceiling

    = $232.13

    FYE 1996 Second semiannual NCMI

    x 1.2400

    = $287.84

    Indirect Patient Care Ceiling Component

    ($300.00
    - 201.66
    - 11.49)

    = $86.85

    Total Facility Operating Ceiling

    $287.84

    = $374.69

    2. Period July 1, 1997, through December 31, 1997.

    Adjusted Nursing Labor and Nonlabor Ceiling per subdivision 1 of this subsection

    $232.13

    FYE 1997 First semiannual NCMI

    x 1.2600

    = $292.48

    Indirect Patient Care Ceiling Component

    + 86.85

    Total Facility Operating Ceiling

    = $379.33

    D. Calculation of nursing facility's prospective operating cost rate.

    1. Prospective operating cost base rate.

    FYE 1996 Nursing Labor and Nonlabor Operating Base Rate

    $205

    Allowance for Inflation - FYE 1997

    x 1.03

    Prospective Nursing Labor and Nonlabor Cost Rate

    = $211.15

    FYE 1996 Indirect Patient Care Operating Base Rate

    $90.00

    Allowance for Inflation - FYE 1997

    x 1.03

    Prospective Indirect Patient Care Operating Cost Rate

    = $92.70

    2. Calculation of FYE 1996 Average NCMI.

    First semiannual Period NCMI

    1.2000

    Second semiannual Period NCMI

    1.2400

    Average FYE 1996 NCMI

    1.2200

    3. Calculation of FYE 1997 NCMI Rate Adjustments.

    a. Rate adjustment for the period January 1, 1997, through June 30, 1997.

    1996 Second semiannual NCMI

    1.2400

    1996 Average NCMI (from subdivision 2 of this subsection

    1.2200

    Calculation:

    1.2400/1.2200

    Rate Adjustment Factor

    = 1.0164

    Prospective Nursing Labor and Nonlabor Operating Cost Base Rate (from subdivision 1 of this subsection)

    $211.15

    x 1.0164

    = $214.61

    Prospective Indirect Patient Care Operating Cost Rate (from subdivision 1 of this subsection)

    + $92.70

    Total Prospective Operating Cost Rate

    = $307.31

    b. Rate Adjustment for the Period July 1, 1997, through December 31, 1997.

    1997 First semiannual NCMI

    1.2600

    1996 Average NCMI (from subdivision 2 of this subsection)

    1.2200

    Calculation:

    1.2600/1.2200

    Rate Adjustment Factor

    = 1.0328

    Prospective Nursing Labor and Nonlabor Operating Cost Rate (from subdivision 1 of this subsection)

    $211.15

    Rate Adjustment Factor

    x 1.0328

    Prospective Indirect Patient Care Operating Cost Rate (from subdivision 1 of this subsection)

    $ 92.70

    Total Prospective Operating Cost Rate

    = $310.78

    D. In this illustration the nursing facility's operating reimbursement rate for FYE 1997 would be as follows:

    1. For the period January 1, 1997, through June 30, 1997, the operating reimbursement rate would be $307.31 since the prospective operating cost rate is lower than the nursing facility's NCMI adjusted ceiling of $374.69 (from subdivision C 1 of this section).

    2. For the period July 1, 1997, through December 31, 1997, the operating reimbursement rate would be $310.78 since the prospective operating cost rate is lower than the nursing facility's NCMI adjusted ceiling of $379.33 (from subdivision C 2 of this section).

Historical Notes

Derived from Volume 14, Issue 01, eff. December 1, 1997.

Statutory Authority

§ 32.1-325 of the Code of Virginia and Item 322(D)(2a) of Chapter 912 of the 1996 Acts of Assembly.