Maryland Register
Issue Date:  October 13, 2017
Volume 44 • Issue 21 • Page 1001
Title 10
10.09.10 Nursing Facility Services
Authority: Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland
Notice of Proposed Action
The Secretary of Health proposes to amend Regulations .07-1 and .07-2 under COMAR 10.09.10 Nursing Facility Services.
Statement of Purpose
The purpose of this action is to:
(1) Extend the interim working capital fund; and
(2) Establish the budget adjustment factor in order to provide a rate increase of 2 percent in accordance with the Fiscal Year 2018 budget.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
I. Summary of Economic Impact. In accordance with the Program’s budget for Fiscal Year 2018, rates for nursing facility services will increase by 2 percent. In addition, working capital advances will result in loss of potential interest income to the State.
Revenue (R+/R-)
II. Types of Economic Impact.

A. On issuing agency:
B. On other State agencies:
C. On local governments:
Benefit (+)
Cost (-)

D. On regulated industries or trade groups:
E. On other industries or trade groups:
F. Direct and indirect effects on public:
III. Assumptions. (Identified by Impact Letter and Number from Section II.)
A(1). The average reimbursement rate for nursing facility services in Fiscal Year 2017 was $250.84. After a 2 percent increase in Fiscal Year 2018 under the provisions of the proposed amendments, the average rate will be $255.86. Based on a projected 5,656,320 Medicaid days in Fiscal Year 2017, and 5,595,744 days in Fiscal Year 2018, total Medicaid expenditures for nursing facility services will increase by $12,895,751.
($255.86 x 5,595,744) – ($250.84 x 5,656,320) = $12,895,751
A(2). The interim working capital fund will provide approximately $16,000,000 to providers during Fiscal Year 2018, resulting in loss of potential interest income of $211,360, based on a rate of return of 1.321 percent.
D. Provider reimbursement for nursing facilities will increase by $12,895,751 during Fiscal Year 2018 as described in Section III.A. Providers will also benefit from the State’s loss of potential interest income in the amount of $211,360 due to providing working capital advances.
Economic Impact on Small Businesses
The proposed action has a meaningful economic impact on small business. An analysis of this economic impact follows.
Eight nursing homes, which qualify as small businesses, are expected to account for 46,026 Medicaid days during Fiscal Year 2018. At an average increase in rates of $5.02 per day, the impact on small businesses is estimated as an increase in revenue of $231,051. The amount of benefit to small businesses due to the interim working capital fund is indeterminate.
Impact on Individuals with Disabilities
The proposed action has an impact on individuals with disabilities as follows:
The proposed action affects payments for services used by individuals with disabilities, but is not expected to have an impact on availability or access to services.
Opportunity for Public Comment
Comments may be sent to Michele Phinney, Director, Office of Regulation and Policy Coordination, Maryland Department of Health, 201 West Preston Street, Room 512, Baltimore, MD 21201, or call 410-767-6499 (TTY 800-735-2258), or email to, or fax to 410-767-6483. Comments will be accepted through November 13, 2017. A public hearing has not been scheduled.
.07-1 Interim Working Capital Fund.
A.—H. (text unchanged)
I. The Interim Working Capital Fund expires on May 1, [2017] 2018. Providers shall repay all outstanding funds to the Department by May 1, [2017] 2018. The Department may grant repayment extensions of not longer than 60 days under extraordinary circumstances.
.07-2 Prospective Rates Effective January 1, 2015.
A.—M. (text unchanged)
N. Final facility rates for the period July 1, 2017, through June 30, 2018, shall be each nursing facility’s quarterly rate, exclusive of the amount identified in Regulation .11-8A(2) of this chapter, reduced by the budget adjustment factor of 9.652 percent, plus the Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter and the ventilator care add-on amount identified in Regulation .11-8A(2) of this chapter when applicable.
Secretary of Health