CMS pays for Medicare and Medicaid nursing home survey, certification, and enforcement activities using a price-based budgeting process. Under the price-based methodology, national standard measures of workload and costs are used to project individual state workloads and budgets. Payments to states are based on allowable costs up to a ceiling of 115 percent of the national average. If states exceed this average, their payments are frozen at the previous year's level for that facility, unless the state can successfully justify the causes for costs exceeding 115 percent.17 At the time of our study, no states have argued that their costs in excess of the 115 percent ceiling should have been allowable.18 The federal budget for fiscal year 2003 includes almost $250 million for state survey and certification activities.
In 2001, the average number of hours required per survey was 108. Across states, the average ranged from 66 hours per survey in Maine to 195 hours in Delaware. Based on last year's budget, any state taking more than 131 hours would be frozen at the previous year's funding levels. (Source: Interview with Steven Pelovitz, Director, Survey and Certification Group, Center for Medicare and Medicaid Services).
Source: Discussion with Steve Pelovitz, Director of CMS Survey and Certification Group, January 2002.