KRS 142.361 — Provider assessment on nursing facility services -- Disposition of revenues -- Administrative regulations -- Application to amend waiver -- Circumstances rendering provisions void

(1) (a) A provider assessment is hereby imposed on nursing facility se rvices as
provided in this subsection.
(b) The base for the assessment shall be determined on July 1 of each year,
beginning on July 1, 2004, by dividing total gross revenues received by all
nursing facilities for nursing facility services during the prior fiscal year by the
total patient days for all nursing facilities attributable to nursing facility
services during the prior fiscal year. The resulting amount shall be the base for
the assessment imposed under this subsection, and shall be called the "average
daily revenue per patient bed."
(c) The assessment shall be imposed as follows:
1. a. At a uniform rate per non -Medicare patient day of up to one
percent (1%) of the average daily revenue per patient bed applied
to actual non-Medicare patient bed days by each nursing facility on
or after July 1, 2004, for the provision of nursing facility services
that are provided at a non-hospital based facility:
i. Containing licensed intermediate care facility beds as of
September 1, 2005; and
ii. With a facility total bed capacity of sixty (60) or fewer beds.
b. This rate shall apply for qualifying providers beginning July 1,
2004. Any tax liability for tax periods beginning on or after July 1,
2004, attributable to the imposition of the levy under KRS 142.307
or the levy imposed by 2004 Ky. Acts ch. 142, sec. 1, shall be
retroactively recalculated at the rate provided in this subsection,
and no penalties or interest shall apply to any outstanding amounts.
2. At a uniform rate per non -Medicare patient day of up t o two percent
(2%) of the average daily revenue per patient bed applied to actual non -
Medicare patient bed days by each nursing facility on or after July 1,
2004, for the provision of nursing facility services that are provided at a
hospital-based nursing facilities; and
3. At a rate per non-Medicare patient day not to exceed six percent (6%) of
the average daily revenue per patient bed applied to actual non-Medicare
patient bed days by each nursing facility on or after July 1, 2004. This
rate shall not apply to any provider assessed under subparagraphs 1. or 2.
of this paragraph.
4. Notwithstanding the provisions of subparagraphs 1. to 3. of this
paragraph, no provider assessment shall be levied under this subsection
on a state veterans' nursing home on or after July 1, 2004.
(d) The rates established by paragraph (c) of this subsection are maximum rates.
The rates may be adjusted annually on July 1 of each year by the Department
for Medicaid Services. Notification of any rate change shall be provided to the
Department of Revenue a nd to taxpayers in writing at least thirty (30) days
prior to the new rate going into effect.
(2) The assessment imposed under subparagraph 3. of paragraph (c) of subsection (1) of
this section is not required to be uniform, and the rate of assessment per non-
Medicare day may be variable based upon a facility's total annual census days if
deemed an acceptable waivered class by the Centers for Medicare and Medicaid
Services.
(3) All revenues collected pursuant to subsection (1) of this section shall be depos ited
in the Medical Assistance Revolving Trust Fund (MART) and transferred on a
quarterly basis to the Department for Medicaid Services.
(4) The Department for Medicaid Services shall promulgate administrative regulations
to ensure that a portion of the re venues generated from the assessment imposed by
subsection (1) of this section and federal matching funds be used to increase
reimbursement rates for nursing facilities. The regulations shall, at a minimum:
(a) Provide that the rate increases shall be used to fully phase in those providers
whose current rates are less than the Medicaid price-based rates;
(b) Correct for inflation adjustments for the past two (2) years; and
(c) Re-base the rates to recognize current wage and benefit levels in the industry.
(5) The remaining revenue generated by the assessments levied under subsection (1) of
this section and federal matching funds shall be used to supplement the medical
assistance related general fund appropriations of the Department for Medicaid
Services. Not withstanding KRS 48.500 and 48.600, the MART fund shall be
exempt from any state budget reduction acts.
(6) (a) On or before July 1, 2004, the Cabinet for Health and Family Services,
Department for Medicaid Services shall submit an application to the Feder al
Centers for Medicare and Medicaid Services to request a waiver of the
uniformity tax requirement pursuant to 42 C.F.R. sec. 433.68(e)(2). If an
application to the Centers for Medicare and Medicaid Services for a waiver of
the uniformity requirements is denied, the Department for Medicaid Services
may resubmit the application with appropriate changes to receive an approved
waiver.
(b) On or before July 1, 2005, the Cabinet for Health and Family Services,
Department for Medicaid Services, shall submit an a pplication to the Federal
Centers for Medicare and Medicaid Services to amend the waiver of the
uniformity tax requirement granted in 2004. If the application to Centers for
Medicare and Medicaid Services for an amendment to the previously granted
waiver i s denied, the Department for Medicaid Services may resubmit the
application with appropriate changes to receive an approved amendment to the
waiver.
(7) Assessments imposed pursuant to this section shall begin on July 1, 2004, but are
not due and payable u ntil rates are increased as provided in subsection (5) of this
section.
(8) The provisions of this section shall be considered null and void if the uniformity
waiver or plan amendment to increase rates is not approved by the Centers for
Medicare and Medicaid Services.