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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 1417 By: Thompson (Roger)
COMMITTEE SUBSTITUTE
An Act relating to the state Medicaid program;
amending 56 O.S. 2021, Section 1011.5 , which relates
to the nursing facility incentive reimbursement rate
plan; modifying conditions for change s to certain
quality measures; clarifying and updating statutory
language; modifying certain method of reporting;
amending 63 O.S. 2021, Section 1 -1925.2, which
relates to reimbursements from the Nursing Facility
Quality of Care Fund ; requiring certain transition t o
price-based methodology; directing certain adjustment
to direct care payments ; requiring the Oklahoma
Health Care Authority to implement certain
scholarship program subject to available funding;
updating statutory language; updating statutory
reference; providing an effective date; and declaring
an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 56 O. S. 2021, Section 1011.5, is
amended to read as follows:
Section 1011.5. A. 1. The Oklahoma Health Care Authority
shall develop an incentive reimbursement rate plan for nursing
facilities focused on improving resident outcomes an d resident
quality of life.
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2. Under the current rate methodology, the Authority shall
reserve Five Dollars ($5.00) per patient day designated for the
quality assurance component that nursing facilities can earn for
improvement or performance achievement of resident-centered outcomes
metrics. To fund the quality assurance component, Two Dollars
($2.00) shall be deducted from each nursing facility ’s per diem
rate, and matched with Three Dollars ($3.00) per day funded by the
Authority. Payments to nursing facilities that achieve spe cific
metrics shall be treated as an “add back” to their net reimbursem ent
per diem. Dollar values assigned to each metric shall be determined
so that an average of the five -dollar-quality incentive is made to
qualifying nursing facilities.
3. Pay-for-performance payments may be earned quarterly and
based on facility-specific performance achievement of four equally-
weighted, equally weighted Long-Stay Quality Measures , as defined by
the Centers for Medicare and Medicaid Services (CMS).
4. Contracted Medicaid long -term care providers may earn
payment by achieving eithe r five percent (5%) rela tive improvement
each quarter from baseline or by achie ving the National Average
Benchmark or better for each individual quality metric.
5. Pursuant to federal Medicaid approval, any funds that remain
as a result of providers failing to meet th e quality assurance
metrics shall be pooled and redistributed to those who achieve the
quality assurance metrics each quarter. If federal approval is not
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received, any remaining funds shall be de posited in the Nursing
Facility Quality of Care Fund authorized in Sect ion 2002 of this
title.
6. The Authority shall establi sh an advisory group with
consumer, provider and state agency representation to recom mend
quality measures other than those specified in paragraph 7 of this
subsection to be included in the pay-for-performance program and t o
provide feedback on program performance and recommendat ions for
improvement. The quality measures shall be reviewed annually and
shall be subject to change every three (3) years through the
agency’s promulgation of rules as funding is available. The
Authority shall insure ensure adherence to the following criteria in
determining the quality measures:
a. provides direct benefit to resident care outcomes,
b. applies to long-stay residents, and
c. addresses a need for quali ty improvement using the
Centers for Medicare and Medicaid Services (CMS)
ranking for Oklahoma.
7. The Authority shall begin the pay -for-performance program
focusing on improving the following CMS nursing home long-stay
quality measures:
a. percentage of long-stay, percent of high-risk
residents with pressure ulcer s,
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b. percentage of long-stay percent of residents who lose
too much weight,
c. percentage of long-stay percent of residents with a
urinary tract infection, and
d. percentage of long-stay percent of residents who got
received an antipsychotic medication.
B. The Oklahoma Health Care Authorit y shall negotiate with the
Centers for Medicare and Me dicaid Services to include the authority
to base provider reimbursement rates for nursing facilities on the
criteria specified in subsection A of this section.
C. The Oklahoma Health Care Authority shall audit the program
to ensure transparency and integr ity.
D. The Oklahoma Health Care Authority shall provide
electronically submit an annual report of the i ncentive
reimbursement rate plan to the Governor, the Speaker of the House of
Representatives, and the President Pro Tempore of the Senate by
December 31 of each year. The report shall include, but not be
limited to, an analysis of the pre vious fiscal year including
incentive payments, ratings, and notable trends.
SECTION 2. AMENDATORY 63 O.S. 2021, Section 1-1925.2, is
amended to read as follows:
Section 1-1925.2. A. The Oklahoma Health Care Authority shall
fully recalculate an d reimburse nursing facilities and Intermediate
Care Facilities for Individuals with Intell ectual Disabilities
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intermediate care facilities for individ uals with intellectual
disabilities (ICFs/IID) from the Nursing Facility Quality of Care
Fund beginning October 1, 2000, the avera ge actual, audited costs
reflected in previously submitted cost reports for the cost -
reporting period that began July 1, 19 98, and ended June 30, 1999,
inflated by the federally published inflationary factors for the two
(2) years appropriate to reflect present-day costs at the midpoint
of the July 1, 2000, through June 30, 20 01, rate year.
1. The recalculations provided for in this subsection shall be
consistent for both nursing facilities and Intermediate Care
Facilities for Individuals with Intellectual Disabilities
intermediate care faci lities for individuals with intellectual
disabilities (ICFs/IID).
2. The recalculated reimbursement rate shall be implemented
September 1, 2000.
B. 1. From September 1, 2000, through August 31 , 2001, all
nursing facilities subject to the Nursing Home Car e Act, in addition
to other state and federal requirements related to the staffing of
nursing facilities, shall maintain the following minimum direct -
care-staff-to-resident ratios:
a. from 7:00 a.m. to 3:00 p.m., one di rect-care staff to
every eight residents, or major fraction thereof,
b. from 3:00 p.m. to 11:0 0 p.m., one direct-care staff to
every twelve residen ts, or major fraction thereof, and
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c. from 11:00 p.m. to 7:00 a.m., one direct -care staff to
every seventeen residents, or major fraction thereof.
2. From September 1, 2001, through August 31, 2003, nursing
facilities subject to the N ursing Home Care Act and Intermediate
Care Facilities for Individuals with Intellectual Disabilities
intermediate care facilities for individuals with intellectual
disabilities (ICFs/IID) with seventeen or more beds shall maintain,
in addition to other sta te and federal requir ements related to the
staffing of nursing facilities, the following minimum direct -care-
staff-to-resident ratios:
a. from 7:00 a.m. to 3:00 p.m., one direct -care staff to
every seven residents, or major fraction thereof,
b. from 3:00 p.m. to 11:00 p.m., one direct-care staff to
every ten residents, or major fraction thereof, and
c. from 11:00 p.m. to 7:00 a.m., one direct-care staff to
every seventeen residents, or maj or fraction thereof.
3. On and after October 1, 2019, nursing facili ties subject to
the Nursing Home Care Act an d Intermediate Care Facilities for
Individuals with Intellect ual Disabilities intermediate care
facilities for individuals with intellectual disabilities (ICFs/IID)
with seventeen or more beds shall maintain, in addition to other
state and federal requirements related to the staffing of nursing
facilities, the following mi nimum direct-care-staff-to-resident
ratios:
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a. from 7:00 a.m. to 3:00 p.m., one direct-care staff to
every six residents, or major fraction ther eof,
b. from 3:00 p.m. to 11:00 p.m., one direct -care staff to
every eight residents, or major fraction t hereof, and
c. from 11:00 p.m. to 7:00 a.m., one direct-care staff to
every fifteen residents, or major fraction thereof.
4. Effective immediately, fa cilities shall have the option of
varying the starting times fo r the eight-hour shifts by one (1) hour
before or one (1) hour after the times designated in this secti on
without overlapping shifts.
5. a. On and after January 1, 2020, a facility may implemen t
twenty-four-hour-based staff scheduling; provided,
however, such facility shall continue to maintain a
direct-care service rate of at least two and nine
tenths nine-tenths (2.9) hours of direct -care service
per resident per day, the same to be calculated based
on average direct care staff maintained over a twenty-
four-hour period.
b. At no time shall direct-care staffing ratios in a
facility with twenty-four-hour-based staff-scheduling
privileges fall below one direct-care staff to every
fifteen residents or major fraction th ereof, and at
least two direct-care staff shall be on duty and awake
at all times.
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c. As used in this paragraph, “twenty-four-hour-based-
scheduling” “twenty-four-hour-based staff scheduling”
means maintaining:
(1) a direct-care-staff-to-resident ratio based on
overall hours of direct -care service per resident
per day rate of not less than two and ninety one-
hundredths (2.90) two and nine-tenths (2.9) hours
per day,
(2) a direct-care-staff-to-resident ratio of at least
one direct-care staff person on duty to every
fifteen residents or major fraction thereof at
all times, and
(3) at least two direct-care staff persons on duty
and awake at all times.
6. a. On and after January 1, 2004, the State Department of
Health shall require a facility to maintain the shift -
based, staff-to-resident ratios provided in paragraph
3 of this subsection if the facility has been
determined by the Department to b e deficient with
regard to:
(1) the provisions of paragraph 3 of this subsection,
(2) fraudulent reporting of staffing on the Quality
of Care Report, or
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(3) a complaint or survey investigation that has
determined substandard quality of care as a
result of insufficient staffing.
b. The Department shall require a facility described in
subparagraph a of this paragraph to achieve and
maintain the shift-based, staff-to-resident ratios
provided in paragraph 3 of this subsection for a
minimum of three (3) months b efore being considered
eligible to implement twenty-four-hour-based staff
scheduling as defined in s ubparagraph c of paragraph 5
of this subsection.
c. Upon a subsequent determination by the Department tha t
the facility has achieved and maintained for at least
three (3) months the shift -based, staff-to-resident
ratios described in paragraph 3 of this subsection,
and has corrected any deficiency described in
subparagraph a of this paragraph, the Department shall
notify the facility of its eligibility to impl ement
twenty-four-hour-based staff-scheduling privileges.
7. a. For facilities that utilize twenty -four-hour-based
staff-scheduling privileges, the Department shall
monitor and evaluate facility compliance with the
twenty-four-hour-based staff-scheduling staffing
provisions of paragraph 5 of this su bsection through
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reviews of monthly staffing reports, results of
complaint investigations and inspections.
b. If the Department identifies any quali ty-of-care
problems related to insufficient staffing in such
facility, the Department shall issue a directed plan
of correction to the facility found to be out of
compliance with the provisions of this subsection.
c. In a directed plan of correction, the Department sha ll
require a facility described in sub paragraph b of this
paragraph to maintain shift -based, staff-to-resident
ratios for the following periods of time:
(1) the first determination shall require that shift -
based, staff-to-resident ratios be ma intained
until full compliance is achieved,
(2) the second determination within a two-year period
shall require that shift -based, staff-to-resident
ratios be maintained for a minimum period of
twelve (12) months, and
(3) the third determination within a two -year period
shall require that shift-based, staff-to-resident
ratios be maintained. The facility may appl y for
permission to use twenty-four-hour staffing
methodology after two (2) years.
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C. Effective September 1, 2 002, facilities shall post the names
and titles of direct-care staff on duty each day in a conspicuou s
place, including the name and titl e of the supervising nurse.
D. The State Commissioner of Health shall promulgate rules
prescribing staffing requirements for Intermediate Care Facilities
for Individuals with Intellectual Disabilities intermediate care
facilities for individuals with intellectual d isabilities serving
six or fewer clients (ICFs/IID-6) and for Intermediate Care
Facilities for Individuals with Intellectual Disabilities
intermediate care fa cilities for individuals with intellectual
disabilities serving sixteen or fewer clients (ICFs/IID -16).
E. Facilities shall have the right to appeal and to the
informal dispute resolution process with regard to pena lties and
sanctions imposed due to staffing noncompliance.
F. 1. When the sta te Medicaid program reimbursement rate
reflects the sum of Ninety-four Dollars and eleven cents ($94.11 ),
plus the increases in actual audited costs over and above the actual
audited costs reflected in the cos t reports submitted for the most
current cost-reporting period and the costs estimated by the
Oklahoma Health Care Authority to increase the direct -care, flexible
staff-scheduling staffing level from two and eighty -six one-
hundredths (2.86) hours p er day per occupied bed to three and two-
tenths (3.2) hours per day per occupied bed, all nursing facilities
subject to the provisions of the Nursing Home Car e Act and
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Intermediate Care Facilities for Individuals with Intellectual
Disabilities intermediate care facilities for individuals with
intellectual disabilities (ICFs/IID) with seventeen or more beds, in
addition to other state and federal requirements related to t he
staffing of nursing faci lities, shall maintain direct -care, flexible
staff-scheduling staffing levels based on an overall three and two-
tenths (3.2) hours per day per occupied bed.
2. When the state Medicaid program reimbursement rate r eflects
the sum of Ninety-four Dollars and eleven cents ($94.11), plus the
increases in actual audited costs over and above the actual audited
costs reflected in the cost r eports submitted for the most current
cost-reporting period and the costs estimated by the Oklahoma Health
Care Authority to in crease the direct-care flexible staff-scheduling
staffing level from three and two-tenths (3.2) hours per day per
occupied bed to three and eight-tenths (3.8) hours per day pe r
occupied bed, all nursing facilities subject to the provisions of
the Nursing Home Care Act and Intermediate Care Facilities for
Individuals with Intellectual Disabilities intermediate care
facilities for individuals with intellectual disabilities (ICFs/IID)
with seventeen or more beds, in addition to other state and federal
requirements related to the staffing of nursing facilities, shall
maintain direct-care, flexible staff-scheduling staffing levels
based on an overall three and eight-tenths (3.8) hours per day per
occupied bed.
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3. When the state Medicaid program reimbursement rate reflects
the sum of Ninety-four Dollars and eleven cents ($94.11), plus the
increases in actual audited costs over and above th e actual audited
costs reflected in the cost re ports submitted for the most current
cost-reporting period and the costs estimated by the Oklahoma Health
Care Authority to increase the direct -care, flexible staff-
scheduling staffing level from three and eight-tenths (3.8) hours
per day per occupied bed to four and one-tenth (4.1) hours per day
per occupied bed, all nursing facilities subject to the provisions
of the Nursing Home Care Act and Intermediate Care Facilities for
Individuals with Intellectual Disa bilities intermediate care
facilities for individu als with intellectual disabilities (ICFs/IID)
with seventeen or more beds , in addition to other state and federal
requirements related to the staffing of nursing facilities, shall
maintain direct-care, flexible staff -scheduling staffing levels
based on an overall four and one-tenth (4.1) hours per day per
occupied bed.
4. The Commissioner shall promulgate rules f or shift-based,
staff-to-resident ratios for noncompliant facilities denotin g the
incremental increases reflected in direct-care, flexible staff -
scheduling staffing levels.
5. In the event that the state Medicaid progr am reimbursement
rate for facilities subject to the Nursing Home Care Act, and
Intermediate Care Facilities for Individu als with Intellectual
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Disabilities intermediate care facili ties for individuals with
intellectual disabilities (ICFs/IID) having seventeen or more be ds
is reduced below actual audited costs, the requirements for staffing
ratio levels shall be adjust ed to the appropriat e levels provided in
paragraphs 1 through 4 of this subs ection.
G. For purposes of this subsection section:
1. “Direct-care staff” means any nursing or therapy staff who
provides direct, hands -on care to residents in a nursing facility;
2. Prior to September 1, 2003, activity and social services
staff who are not providing direct, hands -on care to residents may
be included in the direct-care-staff-to-resident ratio in any shift.
On and after September 1, 2003, such pe rsons shall not be inclu ded
in the direct-care-staff-to-resident ratio, regardless of their
licensure or certification status; and
3. The administrator shall not be co unted in the direct-care-
staff-to-resident ratio regardless of the admini strator’s licensure
or certification status.
H. 1. The Oklahoma Health Care Authority shall require all
nursing facilities subject to the provisions of the Nursing Home
Care Act and Intermediate Care Facilities for Individuals with
Intellectual Disabilities intermediate care facilities for
individuals with intellectual disabilities (ICFs/IID) with seventeen
or more beds to submit a monthly report on st affing ratios on a form
that the Authority shall develop.
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2. The report shall document the extent to whi ch such
facilities are meeting or are failing to meet the minimum direct -
care-staff-to-resident ratios specified by this se ction. Such
report shall be available to the public upon request.
3. The Authority may assess administrative penalties for the
failure of any facility to submit the report as required by the
Authority. Provided, however:
a. administrative penalt ies shall not accrue until the
Authority notifies the facility in writing th at the
report was not timely submitted as required, and
b. a minimum of a one-day penalty shall be asse ssed in
all instances.
4. Administrative penalties shall not be assessed for
computational errors made in preparing the report.
5. Monies collected from administrative penalties shall be
deposited in the Nursing Facility Quality of Care Fund established
in Section 2002 of Title 56 of the Oklahoma Statutes and utilized
for the purposes specified in the Oklahoma Healthcare Initiative Act
such section.
I. 1. All entities regulated by this state that provide long-
term care services shall utilize a single asse ssment tool to
determine client services needs. The tool shall be developed by the
Oklahoma Health Care Author ity in consultation with the State
Department of Health.
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2. a. The Oklahoma Nursing Facility Funding Advisory
Committee is hereby created and shall consist of the
following:
(1) four members selecte d by the Oklahoma Association
of Health Care Providers Oklahoma,
(2) three members selected by the Oklahoma
Association of Homes and Services f or the Aging,
and
(3) two members selected by the Oklahoma State
Council on Aging and Adult Protective Services.
The Chair chair shall be elected by the committee. No
state employees may be appointed to serve.
b. The purpose of the adv isory committee will be to
develop a new methodology for calculating state
Medicaid program reimburse ments to nursing facilities
by implementing facil ity-specific rates based on
expenditures relating to direct care staffing. No
nursing home will receive less than the current rate
at the time of implementation of facility-specific
rates pursuant to this subpara graph.
c. The advisory committee shall be staffed and advised by
the Oklahoma Health Care Authority.
d. The new methodology will be submitted for app roval to
the Board of the Oklahoma Health Care Authority Board
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by January 15, 2005, and shall be fina lized by July 1,
2005. The new methodology will apply only to new
funds that become available for Medicaid nursing
facility reimbursement after the methodology of this
paragraph has been fina lized. Existing funds paid to
nursing homes will not be subject to the meth odology
of this paragraph. The methodology as outlined in
this paragraph will only be applied to any new funding
for nursing facilities appropriated above and beyond
the funding amounts e ffective on January 15, 2005.
e. The new methodology sha ll divide the payment into two
components:
(1) direct care which includes allowable costs for
registered nurses, licensed practical n urses,
certified medication aides and certified nurse
aides. The direct care component of the rate
shall be a facility-specific rate, directly
related to each facility’s actual expenditure s on
direct care, and
(2) other costs.
f. The Oklahoma Health Care Authority, in calculating t he
base year prospective direct care rat e component,
shall use the following criteria:
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(1) to construct an array of facility per diem
allowable expenditures on direct care, the
Authority shall use the most recent data
available. The limit on this array shall be no
less than the ninetieth p ercentile,
(2) each facility’s direct care base-year component
of the rate shall be the lesser of the facility’s
allowable expenditures on direct care or the
limit,
(3) the Authority shall transition the payment rate
methodology of nursing facilities to a price -
based methodology when data for such a
methodology becomes available and has been
analyzed by the Authority. Under the price-based
methodology, the direct care payment amount of
each facility shall be adjusted to reflect the
resident case mix of eac h facility using a
percentage of funds i n the direct care pool as
determined by the Authority ,
(4) other rate components shall be determined by t he
Oklahoma Nursing Facility Funding Advisory
Committee or the Authority in accordance with
federal regulations and requirements,
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(4) (5) prior to July 1, 2020, the Authori ty shall
seek federal approval to calculate the upper
payment limit under the authority of CMS the
Centers for Medicare and Medicaid Services (CMS)
utilizing the Medicare equivalent payment rate,
and
(5) (6) if Medicaid payment rates t o providers are
adjusted, nursing home ra tes and Intermediate
Care Facilities for Individuals with Intellectual
Disabilities intermediate care facilities for
individuals with intellectual disabilities
(ICFs/IID) rates shall not be adj usted less
favorably than the average p ercentage-rate
reduction or increase applicable to the majority
of other provider groups.
g. (1) Effective October 1, 2019 , if sufficient funding
is appropriated for a rate increase, a new
average rate for nursing facilities sha ll be
established. The rate shall be equal to the
statewide average cost as derived from audited
cost reports for SFY 201 8, ending June 30, 2018,
after adjustment for inflation. After such new
average rate has been estab lished, the facility
specific reimbursement rate shall be as f ollows:
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(a) amounts up to the existing base rate amount
shall continue to be distributed as a part
of the base rate in acc ordance with the
existing State Plan, a nd
(b) to the extent the new rate exce eds the rate
effective before the effective date of this
act October 1, 2019, fifty percent (50%) of
the resulting increase on October 1, 2019,
shall be allocated toward an increase of the
existing base reimbursement rate and
distributed accordingly. The remaining
fifty percent (50%) of t he increase shall be
allocated in accordance with the currently
approved 70/30 reimbursement rate
methodology as outlined in the existing
State Plan.
(2) Any subsequent rate increases, as determined
based on the provisions set forth in this
subparagraph, shall be allocated in accordance
with the currently approved 70/30 reimburse ment
rate methodology. The rate shall not exceed the
upper payment limit established by the Medicare
rate equivalent establis hed by the federal CMS .
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h. Effective October 1, 2019, in coordination with the
rate adjustments identified in the precedi ng section,
a portion of the funds shall be utilized as follows:
(1) effective October 1, 2019, the Oklahoma Health
Care Authority shall increase the person al needs
allowance for residents of nursing homes a nd
Intermediate Care Faci lities for Individuals with
Intellectual Disabilities intermediate care
facilities for individuals with intellectual
disabilities (ICFs/IID) from Fifty Dollars
($50.00) per month to Seventy-five Dollars
($75.00) per month per resident. The increase
shall be funded by Medicaid nursing home
providers, by way of a r eduction of eighty-two
cents ($0.82) per day deducted from the base
rate. Any additional cost shall be funded by the
Nursing Facility Qualit y of Care Fund, and
(2) effective January 1, 2020, all c linical employees
working in a licensed nursing facility shall be
required to receive at least four (4) hours
annually of Alzheimer ’s or dementia training, to
be provided and paid for by the facilities.
3. The Department of Human Services shall expand it s statewide
toll-free, Senior-Info Line Senior Info-line for senior citizen
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services to include assistance with or inf ormation on long-term care
services in this state.
4. The Oklahoma Health Care Authority shal l develop a nursing
facility cost-reporting system that reflects the most curr ent costs
experienced by nursing and speci alized facilities. The Oklahoma
Health Care Authority sh all utilize the most current cost report
data to estimate costs in determining daily per diem rates.
5. The Oklahoma Health Care Authority shall provide access to
the detailed Medicaid payment audit adjustments and implement an
appeal process for disputed payment audit adjustments to the
provider. Additionally, the Oklahoma Health Care Authority shall
make sufficient revisions to the nursing facility cost re porting
forms and electronic data input sy stem so as to clarify what
expenses are allowable and app ropriate for inclusion in cost
calculations.
J. 1. When the state Medicaid program reimbursement rate
reflects the sum of Ninety -four Dollars and eleven cents ($94.11),
plus the increases in actual audited costs, over and above the
actual audited costs reflected in the cost reports submitted for the
most current cost-reporting period, and the direct-care, flexible
staff-scheduling staffing level has been pro spectively funded at
four and one-tenth (4.1) hours per day per occupied bed, the
Authority may apportion funds for the implementation of the
provisions of this section.
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2. The Authority shall make application to the United States
Centers for Medicare and Medicaid Service for a waiver of the
uniform requirement on health -care-related taxes as permitted by
Section 433.72 of 42 C.F.R., Section 433.72.
3. Upon approval of the waiver, the Authority shall de velop a
program to implement the provisions of the wa iver as it relates to
all nursing faciliti es.
K. Subject to the availability of funds, the Authori ty shall
design and implement a sc holarship program for nurse aides who work
in Medicaid-certified nursing facilities or intermediate care
facilities for individuals with intellectual disabilities (ICFs/IID)
and who are attending a program of practical nursing approved by the
Oklahoma Board of Nursing.
SECTION 3. This act shall become effective July 1, 2024.
SECTION 4. It being immediately necessary for the preservati on
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
59-2-3575 DC 2/22/2024 11:14:06 AM