VA263-17-R-1093-0003001.docx

B. 3 SCHEDULE OF ITEMS - MEDICARE

1. Rate Determination: The VA is seeking preferred rates, based on patient care need. VA rates are an all -inclusive per diem rate. Items generally included or excluded in the per diem rate are listed in Table A, although some variances may apply in coverage. The per diem rate(s) will apply throughout the term of this Indefinite Quantity Contract (IDIQ).

2. Rate Adjustments: Rate adjustments are made in accordance with the proper federal regulatory standard and in accordance with the IDIQ as mutually agreed upon by both parties. Rate adjustments are not effective until the IDIQ modification is signed by both the Contractor and the VA Contracting Officer. The effective date of the rate adjustment will be the actual “Effective Date” as indicated on the IDIQ or the modification. Throughout the term of the contract, the VA will adjust the Medicare Base Rate in accordance with the EPA clause incorporated into the contract (852.216-71). Any adjustments made to the Medicare Base Rate will be calculated in the same manner as the original rate determination. i.e., “Federal Rates – Labor” X “Wage Index” = “Adjusted Labor” + “Federal Rates – Non‐Labor” = “Medicare Base Rate”).

3. Rate Calculation Example:

(1) The original line item prices for that contract term (Fiscal Year) shall be used for all calculations during that particular contract term and new calculations shall be made for each and every contract adjustment period (Fiscal Year) specified in paragraph (d) during that contract term.

The Medicare Per Diem Rate, which is the rate that the VA should be billed, is calculated by subtracting the percentage discount from the Medicare Base Rate.

The Medicare Base Rate is calculated based on information provided by the Centers for Medicare & Medicaid Services, as published in the Federal Register and on the CMS website. Specifically, the “Federal Rates – Labor” X “Wage Index” = “Adjusted Labor” + “Federal Rates – Non‐Labor” = “Medicare Base Rate”. (The wage index used in the calculation depends on the location of the nursing home (i.e., state, county, and urban/non-urban county). So, for a nursing home that is located in an urban county within any State, the following example represents the calculation of the Medicare Base Rate.

(2) For purposes of this example, the contract prices for the line items as specified in paragraph (c) will be adjusted by the percentage calculated as follows:

RUG-IV Category-URBAN: RUX:

RUX price for this nursing home facility is: $754.60

The “Federal Rates – Labor” X “Wage Index” = “Adjusted Labor” + “Federal Rates – Non-Labor” = “Adjusted Rate Total” - (“Negotiated discount %” X “Medicare Base Rate”) will be the cost of the RUX for this nursing home.

This information is taken from TABLES in the Federal Register and the Wage Index is on the CMS website.

TABLES from the Federal Register.

1. RUG-IV Case-Mix adjusted Federal rates for URBAN SNF’s by Labor and Non-Labor component

2. RUG-IV Case-Mix adjusted Federal rates for RURAL SNF’s by Labor and Non-Labor component

CMS Website: www.cms.gov. The direct link for the wage indexes is: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.

The excel spreadsheet has two tabs on the bottom. One tab is for Urban Wage indexes, the other tab is for Non-Urban Wage Indexes. They are listed by state.

There are three (3) areas of general information needed to determine which Wage Index to use:

1. Which State is the facility in?

2. Which County is the facility in?

3. Is that County Urban or Non-Urban (Rural)?

The Urban Wage Index was used to calculate in the Example above.

Table A

Pre-approval required (Paragraph 3) of this Schedule of Items

Pre-approval required(Paragraph 3) of this Schedule of Items

Pre-approval required(Paragraph 3) of this Schedule of Items

Pre-approval required for additional visits

Paragraph 4 of this Schedule of Items

Durable medical Equipment

Specialized beds

Hospice Care

Dialysis

Transportation

UC/ER visits

Hospitalizations

Psychology Services

TPN/IV Therapy

Dental Care

Audiology Care

Eye Care

Custom Prosthetics

Specialized Wound Care

See Paragraph 5 of this Schedule of Items

See Paragraph 6 of this Schedule of Items

4. Rehabilitation Therapy: Any type of rehabilitation therapy (physical therapy, occupational therapy, speech therapy, etc.) requires the pre-approval of the VA before the initiation of therapy.

5. Medications: All Medications administered to VA-contracted Veterans residing in a CNH will be charged according to Average Warehouse Price (AWP) or the State Medicaid rate or Pharmacy bill, whichever is less. Medication costs up to 8.5% of billed care are included in the RUG rate pricing. Medication costs which exceed 8.5% of the monthly per diem will be billed as a separate line item in addition to the applicable RUG rate(s). All calculations will be made on a monthly basis. When a patient’s medication costs are determined to be in excess of the 8.5%, the VA must be promptly alerted to establish an appropriate course of action. This course of action may include the VA providing medication(s) to the CNH for the contracted Veteran or requiring an acceptable alternative medication be substituted. If for any reason the VA provides patient medications, the rate of reimbursement will be decreased by an agreed upon amount. The VA also reserves the right to deny payment for medication, which at its sole discretion, is determined by the VA to be of no clinical benefit to the veteran.

6. Private Rooms: A private room rate for clinical concerns such as communicable diseases or infections (e.g., MRSA, VRE), or other pertinent clinical needs may be charged above the negotiated RUG rate for that facility with prior approval by the VA CNH Coordinator or designated VA staff. However, no additional private room charge will be allowed in the following circumstances: where the CNH only maintains private rooms; no double-occupancy rooms are available; and for ventilator-dependent patients with prior-negotiated rates.

7. Ventilator Care: Veterans requiring the use of a ventilator will only be placed in a CNH-trained and equipped for those types of specialty patients. The CNH must be inspected and approved by the VA prior to any placements in the ventilator-designated room. Rates for ventilator care will be detailed in the rate table and will be an all-inclusive per diem rate (including ventilator and supplies).

8. Specialized Prosthetics Equipment (e.g., special bed and/or bariatric equipment): Veterans may be eligible for specialized equipment when clinically indicated. Pre-approval required by VA.

9. Minimum and Maximum Amounts for this IDIQ. An administrative fee of $50.00 will be obligated at the time of contract award. The maximum amount for this IDIQ shall not exceed $10 million dollars.

10. Economic Price Adjustment. Medicare pricing changes by law annually, and rate modifications are accomplished under the contract by bilateral modification.