Sec.17-313b-8. Client-based service rate determination process

The client-based service rate is for payment of costs for the provision of services for eligible persons in community living arrangements whose admission into the CLA is authorized by the Department of Mental Retardation pursuant to 17a-228 of the Connecticut General Statutes and regulations promulgated thereunder. Residential client needs assessments serve to establish basic staffing patterns used in the annual negotiation of this rate.

(1) Cost settlement

(i) An organization will not be reimbursed for costs in excess of the sum of the negotiated rates for all community living arrangements operated by the organization, unless such reimbursement is otherwise authorized pursuant to these regulations. The ACOR will serve as the basis for review of actual expenditures for the preceding contract year. There shall be a bottom line cost settlement for costs at or below the sum total of the negotiated rates for the preceding contract year. Cost settlement decisions shall be made within approximately 120 days of the filing of the ACOR for the preceding contract year. Such decisions shall be effected through the adjustment of current payments for the three months after cost settlement decisions are made or shall be reimbursed entirely to the Department of Mental Retardation for community living arrangements which cease operation.

(ii) Cost settlement occurs when actual expenditures are below the sum total of the established rates for all community living arrangements operated by the organization for the preceding contract year. For all allowable expenditures made pursuant to such contract with the department of mental retardation by an organization in compliance with performance requirements thereof, 50% of the difference between such actual expenditures made and the amount received by the organization from the department of mental retardation per such contract shall be reimbursed to the department of mental retardation.

(iii) Reductions may be made to the negotiated rate for community living arrangements to the extent they fall below 85% of the total available occupancy for the preceding contract year, for reasons other than the failure of the Department of Mental Retardation to place clients, if the organization fails to adequately justify the reduced occupancy rate. For purposes of this section occupancy is the actual client days in residence based on attendance records. Total available occupancy is the number of clients for whom the rate was established times 365. The occupancy rate is established by dividing actual client days in residence by the total available occupancy. Reductions made pursuant to this section shall be reflected in the bottom line cost settlement.

(iv) Grants, gifts, fundraising or endowment income, and expenditures from such income, shall be reported in the ACOR. To the extent such income is specifically designated for operating costs included in the client-based service rate the expenditures from such income shall be deducted from the total operating costs which serve as the basis for negotiating the next year's rate. If an organization demonstrated that such income is not available for the succeeding contract year there will be no deduction and the overpayment shall be recovered through the line item cost settlement.

Grants, gifts, fundraising, or endowment income not specifically designated but used for payment of operating costs reported in the ACOR shall be deducted from the total operating costs which serve as the basis for negotiating the next year's rate.

(v) For the 1992 contract year only, an organization may elect the cost settlement methodology in effect immediately prior to the effective date of these regulations. Such election shall be made at the time of submission of the organization's 1992 contract year ACOR.

(2) The client-based service rate for each community living arrangement includes:

(1) Salary, wage and benefit costs for administrative and general and direct service personnel; and

(2) Non-salary costs which are not included in the per diem room and board reimbursement rate as specified in Sec. 17a-313b-6 of these regulations. Nothing in this section shall be construed to require the Department of Mental Retardation to pay for costs which were disallowed in the calculation of the room and board rate.

(3) Administrative costs will be reviewed for reasonableness as a percentage of direct service and total operating costs based on statewide averages. Administrative costs are necessary to manage and operate community living arrangements but are not assignable to the cost of services rendered to an individual client.

(4) Staff development and training costs for new employees and ongoing direct service staff, a component of non-salary costs reimbursable under this rate, will be negotiated based on core development and training modules specified by the Department of Mental Retardation and other training negotiated and agreed to by the department and the organization.

(5) Analyses of the operation plan, ACOR, and other relevant information relating to management, financial and programmatic performance will be used in the rate negotiation process.

(6) Inadequate management, financial and programmatic performance may result in a contract term of less than twelve months.

(7) Client-based service rates are established prospectively and payments will be made retrospectively each month for costs incurred during the preceding month.

(8) The annual appropriation to the Department of Mental Retardation of funds for community living arrangements, and the allocation of these funds to the respective Department of Mental Retardation regions, shall be taken into account in establishing client-based service rates. In no event shall the Department of Mental Retardation be required to make payments in excess of funds appropriated for this purpose and allocated to the regions.

(9) When negotiations between the organization and the DMR result in agreed upon client-based service rates for the community living arrangements operated by an organization, the Commissioner of Mental Retardation shall certify these rates and shall issue rates in accordance with such certification. If negotiations fail to result in agreed-upon client-based service rates by the first business day following May 15, the Commissioner of Mental Retardation shall certify his department's last best offer and shall issue rates in accordance with such certification.

(10) Newly licensed community living arrangements, for which client-based service rates are established pursuant to this section, shall be fully reimbursed in accordance with the negotiated rate for the first 60 days after the first client is in residence. After 60 days there shall be a proportional adjustment, reflected in the line item cost settlement for each day the community living arrangement is not fully occupied unless the organization provides adequate justification for the reduced occupancy.

(Effective September 28, 1994)