P - Present
Roll Call
OTHERS PRESENT: See Original Minutes
The committee met jointly with House Appropriations.
The meeting was called to order by Chairman Drake
Department of Social Services
Secretary Jim Ellenbecker, Department of Social Services (DSS), approached the committee and
introduced Mr. Leonard Chick, Program Administrator of the Provider Reimbursement Program.
The nursing facility medicaid reimbursement presentation was handed out. (Document #1)
Mr. Chick explained the definitions found in the case mix payment system and RUG's III
Classification System. (See pages two and three of Document #1)
Representative Pummel asked who classifies the nursing home residents. Mr. Chick said the nursing
home facilities classify their own residents.
Representative Pummel asked how often the condition of the residents is updated. Secretary
Ellenbecker said that each new resident must be classified within fourteen days of arrival and again
every ninety days thereafter. If there is a significant change in a resident, the facility can reassess
them at that time.
Senator Madden asked if the nursing home facilities are responsible for paying for equipment used
to assist residents. Mr. Chick said that each facility must purchase their own equipment, the cost is
reported as part of their actual cost and DSS then adds that to their direct aid cost.
Mr. Chick explained South Dakota's method of determining rates for long-term care facilities and
gave an example of a rate calculation. (See page four of Document #1)
Senator Drake asked how the rates fluctuate. Mr. Chick said that the average case mix is more than
the cost.
Representative Clark asked what the definition of direct care cost is. Secretary Ellenbecker said that
direct care costs are costs associated with the direct care of a nursing home resident, i.e., salaries for
nurses and nurses aides, occupational therapy, and supplies.
Representative Clark asked if the facilities raised the salaries of their employees, would it be built
into their budget and are they given increased funding. Mr. Chick said that the program is cost-based
and the nursing homes would have to spend the money to raise salaries and then ask for a rebatement
for those costs; the initial two years of salary increases would have to come from the facility's
budget.
Representative Klaudt asked if nursing homes unable to afford increasing the salaries of
Representative Lange asked how the state of Minnesota was able to afford equalization of the state
and privately funded residents. Mr. Ellenbecker said that in Minnesota and North Dakota, they have
equalized all of the nursing home facilities. This increases the responsibility of the state, decreases
the level of control that each facility has, and the state then determines the rates charged, and levels
of profit the facilities will make.
Mr. Chick explained the steps taken when determining rate calculations, including direct care rates
and non direct care rates. He explained an example of the resident specific payment system.
Senator Drake asked how the residents are classified. Mr. Chick said that a form is filled out for
each resident providing detailed information such as the number of days the resident was in the
facility and the amount of care they received, which determines their classification. The facilities
are paid for each day the resident is there at a resident specific rate.
Representative Clark asked if an increase in the state general funds was made available to nursing
home facilities for the increase of staff salaries, would it be possible to raise the salaries of the
facility staff. Secretary Ellenbecker said unless the cost-based system was replaced or inflation rates
increased, an addition to general funds would not change the ability for the Department to aid in
increasing staff salaries in nursing home facilities.
Representative Clark asked for Secretary Ellenbecker's opinion on how to address the issue of
nursing home salary increases and high staff turnover rates in the case of the facility being unable
to afford to increase the staff salaries for two years before reimbursement. Secretary Ellenbecker
said the issue has been discussed and the two resolutions found are: wage pass throughs and/or an
increase in the inflation rate used.
Senator Drake asked what the average inflation rate was for FY2002. Secretary Ellenbecker said the
inflation rate is 1.8 percent with a rebase of $3,800,000, which equals $5,800,000 put into the cost,
resulting in an average of 5.1 percent increase from FY2001.
Senator Kleven asked if there are regulations put on the nursing homes to maintain a percentage of
occupancy to receive medicaid. Secretary Ellenbecker said the average occupancy rate throughout
the state is decreased by three percent and facilities must match that percentage of occupancy. If they
do not, they must decertify a number of their beds or they can recertify those beds as assisted living
quarters.
Senator Dennert asked how the monies for the trust fund are appropriated. Ms. Darla Blaseg
approached the committee to answer Senator Dennert's question. Ms. Blaseg explained the process
for appropriating the federal funds.
Mr. Ken Senger, Director, South Dakota Association Health Care Organization, approached the
committee. Mr. Senger stated the Organization's stance on the inflation rate calculations and the
importance of the rebasement program.
Senator Apa asked if the inflation rate calculation was a rate used by other nursing home facilities.
Mr. Senger answered affirmatively, but stated that the Organization feels the rate being used is
debatable.
Secretary Ellenbecker approached the committee in response to Mr. Senger's testimony and stated
that the inflation rate is one that reflects the rates used by other nursing home facilities in the nation.
The amount of funds facilities receive from the inflation rate can be spent as each individual facility
determines.
MOTION:
TO APPROVE THE MINUTES OF JANUARY 23, 2001
LeAnn Allstot
E - Excused
A - Absent
P Sen. Drake, Chair
P Sen. Putnam, Vice-Chair
P Sen. Apa
P Sen. Dennert
P Sen. Duxbury
P Sen. Greenfield
P Sen. Kleven
P Sen. Koskan
P Sen. Madden
its staff could ever receive funds prior to paying the additional salary amount in order to give
increases to their staff. Mr. Ellenbecker stated that because the medicaid program is a cost-based
program, the facilities would have to pay the salaries up-front.
Representative Clark asked if private pay resident percentages has to be higher than medicaid paid
fees for residents in the facilities. Mr. Chick said that it does not have to be more than, but must be
equal to.
Moved by: Madden
Second by: Koskan
Action: Prevailed by voice vote.
MOTION:
TO APPROVE THE MINUTES OF JANUARY 24, 2001
Moved by: Apa
Second by: Duxbury
Action: Prevailed by voice vote.
MOTION:
ADJOURN
Moved by: Duxbury
Second by: Dennert
Action: Prevailed by voice vote.
Committee Secretary
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