Section 140.94  Medicaid Developmentally Disabled Provider Participation Fee Trust Fund/Medicaid Long Term Care Provider Participation Fee Trust Fund

 

a)         Purpose and Contents

 

1)         Effective June 30, 1992, the provider participation fee methodology created under subsection (b) of this Section terminates in accordance with Public Act 87-861.  All other provisions of this Section remain in effect, including but not limited to, subsection (f) of this Section on penalties and subsection (1) of this Section on annual audit and reconciliation.

 

2)         The Funds were created in the State Treasury upon enactment of Public Act 87-13. Interest earned by the Funds shall be credited to the appropriate Fund. The Funds shall not be used to replace any funds appropriated to the Medicaid program by the General Assembly.

 

3)         The Funds are created for the purpose of receiving and disbursing monies in accordance with this Section and Public Act 87-13.

 

4)         The Funds shall consist of:

 

A)        All monies collected or received by the Department under subsection (b) below;

 

B)        All federal matching funds received by the Department as a result of expenditures made by the Department that are attributable to monies deposited in the Funds;

 

C)        Any interest or penalty levied in conjunction with the administration of the Funds; and

 

D)        All other monies received for the Funds from any other source, including interest earned thereon.

 

b)         Provider Participation Fees

Beginning on July 1, 1991, a fee is imposed upon each facility in an amount equal to 15% of the facility's gross receipts for services provided for the previous State fiscal year as determined and reported by the Department.

 

c)         Payment of Fees Due

 

1)         The fees described in subsection (b) above shall be due and payable on a calendar quarterly basis.

 

2)         The fees shall be payable to and collected by the Department in quarterly amounts due and received by the Department at the address specified on the Provider Participation Fee Notice described in subsection (d) on the first business day of the first calendar quarter following the quarter for which the fee is being paid, with the exception of the initial payment which shall be due within thirty (30) days after the date of the Department's notification of the fee due. The subsequent quarterly amounts shall be due on January 1, April 1, July 1 and October 1 of each year. All monies collected under subsections (b) and (c) shall be deposited into the appropriate Fund. For facilities which sign an amendment to their provider agreement stating they will be terminating operation at a specific point in time, the Department will make an adjustment in the fee based on a quarterly average public assistance occupancy level.

 

3)         All payments received by the Department shall be credited first to any interest or penalty, and then to the fee due.

 

4)         County nursing homes directed and maintained pursuant to Section 5-1005 of the Counties Code may meet their fee obligation by the county government certifying to the Department that county expenditures have been obligated for the operation of the county nursing home in an amount at least equal to the amount of the fee. County governments wishing to provide such certification must:

 

A)        Sign a certification form certifying that the funds represent expenditures eligible for federal financial participation under Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), and that these funds are not federal funds, or are federal funds authorized by federal law to be used to match other federal funds;

 

B)        Submit the certification document to the Department once a year along with a copy of that portion of the county budget showing the funds appropriated for the operation of the county nursing home. These documents must be submitted within 30 days of the final approval of the county budget. However, for state fiscal year 1992, the county budgets covering the periods December 1, 1990 through November 30, 1991 and December 1, 1991 through November 30, 1992 must be submitted;

 

C)        Submit the monthly claim form in the amount of the rate established by the Department minus any third party liability amount. This amount will be reduced by one twelfth of the annual assessment amount prior to payment as a certification statement was provided in lieu of an actual assessment payment; and

 

D)        Make records available upon request to the Department and/or the United States Department of Health and Human Services pertaining to the certification of county funds.

 

d)         Notification

The Department shall notify each facility of the results of its calculations under subsections (b) and (c) above. The notification shall be in writing and shall be submitted to the facility at least 30 days prior to the date on which the provider participation fee is due. Such calculations shall be subject to quarterly reconciliations as described in subsection (e) below and the annual audit/reconciliation described in subsection (1) below.

 

e)         Procedure for Reconsideration and Quarterly Reconciliation

 

1)         Reconsiderations. Upon notification of the results of the Department's calculations under subsections (b) and (c) above, each facility shall have the right to reconsideration of the calculation of its provider participation fee for that quarter. Only requests for reconsideration of the assessment calculation shall be considered during the quarterly reconciliation period. All appeals based on utilization/spending estimates shall be addressed during the annual audit/reconciliation described in subsection (k) below.

 

A)        Requests for reconsideration must be received in writing within 30 calendar days of the date of the Department's notification of the fee due. The request shall be accompanied by written materials setting forth the grounds for reconsideration.

 

B)        A facility shall be required to pay its provider participation fee amount for the time period in question. In the event that a request for reconsideration results in the need for an adjustment to the fee due for the subject quarter, such adjustment shall be made during the quarterly reconciliation for the subject quarter.

 

2)         Quarterly Reconciliation. A quarterly reconciliation shall be performed by the Department to make adjustments to the fees calculated by the Department under subsections (b) and (c) above. During the quarterly reconciliation, the Department shall consider all requests for reconsideration which are received in compliance with subsection (e)(1) above. The Department shall notify each facility of the results of the quarterly reconciliation. The notification shall be in writing and shall be submitted to the facility at least ten (10) working days prior to the date on which the subsequent provider participation fee is due.  If, as a result of the reconciliation, the Department determines that the amount of the reconsidered fee was incorrect, this notification shall include an adjustment to the amount of the provider participation fee which is next due, the facility shall be obligated to pay the amount shown on the reconciliation notification if that amount differs from the amount in the notification described in subsection (d).

 

f)          Penalties

 

1)         Any facility that fails to pay the fee when due, or pays less than the full amount due as described in subsections (b) and (c) above, shall be assessed a penalty of ten (10%) percent of the delinquency or deficiency for each month, or fraction thereof, computed on the full amount of the delinquency or deficiency, which includes any penalty accrued and not paid, from the time the fee was due.

 

2)         Within five days from the due date, the Department will begin immediate recoupment actions against the delinquent facility by withholding the amount due from future payments. No payments will be made to the facility until the entire provider fee, including any penalties, is satisfied. Recoupment proceedings against the same facility two times in a fiscal year shall be cause for termination from the Program.

 

3)         If the facility is no longer doing business with the Department or the Department cannot recover the full amount due, including penalties and interest, within three months of the fee due date, the Department may begin legal action to recover the monies owed plus court costs.

 

4)         The Director of the Department of Public Aid is authorized to establish delayed payment schedules for individual facilities that are unable to make timely payments under this Section due to financial difficulties. The delayed payment provisions are described in subsections (g) and (h) below.

 

g)         Delayed Payment – Groups of Facilities

The Director may establish delayed payment of fees and/or waive the payment of interest and penalties for groups of facilities when:

 

1)         the State delays payments to facilities due to problems related to state cash flow, or

 

2)         a cash flow bond pool's or any other group financing plans' requests from providers for loans are in excess of its scheduled proceeds such that a significant number of facilities will be unable to obtain a loan to pay the fee.

 

h)         Delayed Payment – Individual Facilities

In addition to the provisions of subsection (g) above, the Director may waive or delay fees for individual facilities that are unable to make timely payments under this Section due to financial difficulties. No delayed payment arrangements shall extend beyond the last business day of the calendar quarter in which the provider participation fee was to have been received by the Department as described in subsection (c) above.

 

1)         Criteria. Delayed payment provisions may be instituted only under extraordinary circumstances to qualified facilities of medical assistance services. Delayed payment provisions shall be made only to qualified facilities who meet all of the following requirements:

 

A)        the facility has experienced an emergency which necessitates institution of delayed payment provisions. Emergency in this instance is defined as a circumstance under which institution of the payment and penalty provisions described in subsections (c)(1), (c)(2), (f)(1), (f)(2) and (f)(3) above would impose severe and irreparable harm to the clients served. Circumstances which may create such emergencies include, but are not limited to, the following:

 

i)          Department system errors (either automated system or clerical) which have precluded payments, or which have caused erroneous payments such that the facility's ability to provide further services to clients is severely impaired;

 

ii)         cash flow problems encountered by a facility which are unrelated to Department technical system problems and which result in extensive financial problems to a facility adversely impacting on its ability to serve its clients.

 

B)        the facility serves a significant number of clients under the Medical Assistance Program. Significant in this instance means:

 

i)          85 percent or more of their residents must be eligible for public assistance;

 

ii)         for government-owned facilities, subsection (h)(1)(B)(i) may be waived if the cash flow criteria under subsection (h)(1)(A)(ii) is met; and

 

iii)         for providers who have filed for Chapter 11 bankruptcy, subsection (h)(1)(B)(i) may be waived if the cash flow criteria under subsection (h)(1)(A)(ii) is met.

 

C)        the facility must file a Cash Position Statement which is based upon current assets, current liabilities and other data for a date which is less than sixty (60) days prior to the date of filing. Any liabilities payable to owners or related parties must not be reported as current liabilities on the Cash Position Statement. A deferral of assessment payments will be denied if any of the following criteria are met:

 

i)          the ratio of current assets divided by current liabilities is greater than 2.0;

 

ii)         cash, short term investments and long term investments equal or exceed the total of accrued wages payable and the assessment payment. Long term investments which are unavailable for expenditure for current operations due to donor restrictions or contractual requirements will not be used in this calculation;

 

iii)         cash or other assets has been distributed during the previous 90 days to owners or related parties in an amount equal to or exceeding the assessment payment for dividends, salaries in excess of those allowable under Section 140.541 or payments for purchase of goods or services in excess of cost as defined in Section 140.537.

 

D)        the facility, with the exception of government owned facilities, must show evidence of denial of an application to borrow provider participation fee funds through a cash flow bond pool or financial institutions such as a commercial bank.

 

E)         the facility must sign an agreement with the Department which specifies the terms and conditions of the delayed payment provisions. The agreement shall contain the following provisions:

 

i)          specific reason(s) for institution of the delayed payment provisions;

 

ii)         specific dates on which payments must be received and the amount of payment which must be received on each specific date described;

 

iii)         the interest or a statement of interest waiver that shall be due from the facility as a result of institution of the delayed payment provisions;

 

iv)        a certification stating that, should the entity be sold, the new owners will be made aware of the liability and any agreement selling the entity will include provisions that the new owners will assume responsibility for repaying the debt to the Department according to the original agreement;

 

v)         a certification stating that all information submitted to the Department in support of the delayed payment request is true and accurate to the best of the signator's knowledge; and

 

vi)        such other terms and conditions that may be required by the Department.

 

2)         A facility which does not meet the above criteria may request a delayed payment schedule and/or the waiver of interest and penalties. The Director may approve the request, notwithstanding the facility not meeting the above criteria, upon a sufficient showing of financial difficulties and good cause by the facility. If the request for a delayed payment schedule and/or waiver of interest and penalties is approved, all other conditions of this subsection (h) shall apply.

 

3)         Approval Process

 

A)        In order to receive consideration for delayed payment provisions, facilities must submit their request in writing (telefax requests are acceptable) to the Bureau of Program and Reimbursement Analysis. The request must be received within ten (10) working days of the date of the Department's notification of the provider participation fee due for the subject quarter as described in subsection (c) above.  Requests must be complete and contain all required information before they are considered to have met the time requirements for filing a delayed payment request.  All telefax requests must be followed up with original written requests by certified mail postmarked no later than the date of the telefax. The request must include:

 

i)          an explanation of the circumstances creating the need for the delayed payment provisions;

 

ii)         supportive documentation to substantiate the emergency nature of the request and risk of irreparable harm to the clients; and

 

iii)         specification of the specific arrangements requested by the facility.

 

B)        The facility shall be notified by the Department, in writing, of the Department's decision with regard to the request for institution of delayed payment provisions.  An agreement shall be issued to the facility for all approved requests.  The agreement must be signed by the administrator, owner or other authorized representative and be received by the Department prior to the first scheduled payment date listed in such agreement.

 

4)         Waiver of Penalties. The penalties described in subsections (f)(1) and (f)(2) may be waived upon approval of the facility's request for institution of delayed payment provisions. In the event a facility's request for institution of delayed payment provisions is approved and the Department has received the signed agreement in accordance with subsection (h)(3)(B) above, such penalties shall be permanently waived for the subject quarter unless the facility fails to meet the terms and conditions of the agreement. In the event the facility fails to meet the terms and conditions of the agreement, the agreement shall be considered null and void and such penalties shall be fully reinstated.

 

5)         Interest. The delayed payments shall include interest at a rate not to exceed the State of Illinois borrowing rate. The applicable interest rate shall be identified in the agreement described in subsection (h)(1)(E) above. The interest may be waived by the Director if the facility's current ratio, as described in subsection (h)(1)(C) above is 1.5 or less and the facility meets the criteria in (h)(1)(A) and (B). Any such waivers granted shall be expressly identified in the agreement described in subsection (h)(1)(E) above.

 

6)         Subsequent Delayed Payment Arrangements. Once a facility has requested and received approval for delayed payment arrangements, the facility shall not receive approval for subsequent delayed payment arrangements until such time as the terms and conditions of any current delayed payment agreement have been satisfied. The waiver of penalties described in subsection (h)(3) shall not apply to a facility that has not satisfied the terms and conditions of any current delayed payment agreement.

 

i)          Disbursements from the Fund

 

1)         Disbursements from the Funds shall be made only:

 

A)        for facility expenditures made under Title XIX of the Social Security Act;

 

B)        for the reimbursement of monies collected by the Department from facilities through error or mistake;

 

C)        for payment of administrative expenses incurred by the Department or its agent in performing the activities authorized by subsections (b), (c), (d), (e) and (f) above; and

 

D)        for payments of any amounts which are reimbursable to the federal government for payments from these Funds which are required to be paid by State warrant. Disbursements from these Funds shall be by warrants drawn by the State Comptroller upon receipt of vouchers duly executed and certified by the Department.

 

2)         Disbursements from the Fund are conditional on:

 

A)        expiration of the time limitations for reconsiderations requested by facilities under subsection (e)(1) above; and

 

B)        the availability of sufficient monies in the Funds to make the payments required after the quarterly reconciliation determined under subsection (e)(2) above and the annual audit reconciliation determined under subsection (1) below.

 

j)          Court Orders. If one or more facilities file suit in any court challenging any part of this Section, payments to facilities under this Section shall be made only to the extent that sufficient monies are available in the appropriate Fund and only to the extent that any monies in the Fund are not prohibited from disbursement under any order of the Court.

 

k)         Federal Approval. Payments under the disbursement methodology described in this Section are subject to approval by the federal government in an appropriate State plan amendment. Fees under this Section are conditioned on the disbursement methodology being approved by the federal government in an appropriate State plan amendment.

 

l)          Annual Audit/Reconciliation

 

1)         The Department shall conduct an annual review and reconciliation of the provider participation fees paid by facilities within 9 months from the end of the State fiscal year in which the fee described in subsection (b) is due.  The purpose of the reconciliation shall be to adjust the provider participation fees paid by a facility to reflect:

 

A)        the actual services provided by the facility to clients of the Medical Assistance Program during the period to which the provider participation fee relates; and

 

B)        the payments actually received by the facility related to those services during the period to which the provider participation fee relates.

 

2)         Where the estimated utilization of services or gross receipts as determined and utilized by the Department in the calculation of fees due under subsection (b) does not reflect the facility's actual utilization or actual gross receipts during the period to which the provider participation fee relates, the Department shall recalculate the facility's provider participation fee in accordance with subsection (b), using the facility's actual utilization and actual gross receipts for the period to which the provider participation fee relates.

 

A)        If the recalculation indicates that the facility should have been required to pay, but did not pay, a higher provider participation fee based upon actual utilization, the facility shall be required to pay to the Fund within 60 days of the date of notification from the Department that monies are owed to the Department, the difference between the provider participation fee amount actually paid and the provider participation fee amount which should have been paid.

 

B)        If the recalculation indicates that the facility paid a total provider participation fee during the twelve-month period which exceeded that which the facility should have been required to pay based upon actual utilization, the Department shall refund within 60 days of the date of notification from the Department that monies are due the facility to the facility the difference between the amount the facility actually paid and the amount of the provider participation fee the facility should have paid.

 

3)         In no event shall the payments to a facility, less the fees paid by the facility under subsections (b) and (c) above, equal less than the payments from the facility's State fiscal year 1991 weighted average payment rates reduced by 5% unless current rates are lowered by the Inspection of Care survey or rates are reduced due to lowered costs as reported in the cost report used to calculate the current rate.

 

4)         Amounts recovered from a facility shall be credited to the appropriate Fund.  A facility is entitled to recover amounts paid to the Department and to receive refunds and payments from the Department under this Section only to the extent that monies are available in the appropriate Fund.

 

5)         Upon notification of the results of the Department's annual audit/reconciliation, each facility shall have the right to reconsideration of the results of such annual audit/reconciliation. Such requests for reconsideration must be received in writing within thirty (30) calendar days of the date of the Department's notification of the fee due. Such request shall include a clear explanation of the error and documentation of the desired correction. The Department shall notify the facility of the results of the review within 30 days of the receipt of all required review material. If the facility fails to request a reconsideration pursuant to this subsection, the Department's determination shall be final.

 

m)        Applicability

The requirements of this Section shall apply only as long as federal funds under Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) are available to match the fees collected and disbursed under this Section and only as long as reimbursable expenditures are matched at the Federal Medicaid percentage of at least 50 percent. Whenever the Department is informed that federal funds are not available for these purposes, or shall be available at a lower percentage, this Section shall no longer apply and the Department shall promptly refund to each facility the amount of money currently in the Funds that has been paid by the facility, plus any investment earnings on that amount.

 

n)         Definitions

 

1)         "Actual gross receipts" means the gross receipts, as determined and reported by the Department, for services provided during the previous fiscal year which have been paid within nine (9) months from the end of such previous State fiscal year (for example, services provided in fiscal year 1991 and paid no later than March 31, 1992, for fees described in subsection (b) which are imposed in State fiscal year 1992; services provided in fiscal year 1992 and paid no later than March 31, 1993, for fees described in subsection (b) which are imposed in State fiscal year 1993; etc.).

 

2)         "Actual utilization" means the actual utilization of services provided during the State fiscal year in which the fee described in subsection (b) is due and which have been paid within nine (9) months from the end of such State fiscal year (for example, services provided in fiscal year 1992 and paid no later than March 31, 1993 for fees imposed in State fiscal year 1992; services provided in fiscal year 1993 and paid no later than March 31, 1994 for fees imposed in State fiscal year 1993; etc.).

 

3)         "Estimated rate year utilization" means the facility's project utilization for the State fiscal year in which the fee described in subsection (b) is due (for example, fiscal year 1992 for fees imposed in State fiscal year 1992, fiscal year 1993 for fees imposed in State fiscal year 1993, etc.).

 

4)         "Facility" means a Medicaid certified intermediate care facility for the developmentally disabled or intermediate care facility for the developmentally disabled of 16 beds or less, skilled or intermediate nursing facility, including county nursing homes directed and maintained pursuant to Section 5-1005 of the Counties Code, but shall not include state-operated facilities or campus facilities as defined in Section 140.583.

 

5)         "Fee" means a provider participation fee paid by facilities under this Section.

 

6)         "Fund" means the Medicaid Developmentally Disabled Provider Participation Fee Trust Fund and/or Medicaid Long Term Care Provider Participation Fee Trust Fund.

 

7)         "Gross Receipts" means all annualized payments for medical services delivered under Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and Article V of the Public Aid Code (Ill. Rev. Stat. 1991, ch. 23, par. 5-1 et seq.) and shall mean any and all payments made by the Department, or a Division thereof, to a facility certified to participate in the Medical Assistance Program, for services rendered eligible for Medical Assistance under Article V of the Public Aid Code, State regulations and the federal Medicaid Program as defined in Title XIX of the Social Security Act and federal regulations.

 

(Source:  Amended at 17 Ill. Reg. 3421, effective February 19, 1993)