The North Carolina assurance given in the CMS waiver application is that the "average per capita fiscal year expenditures under the waiver will not exceed the average per capita expenditures that would have been made in the fiscal year for ICF-MR
level of care had the waiver not been granted." According to the Thomson/Medstat statistics, North Carolina spent over 446 million dollars on ICF-MR
level of care facilities in FY 2005.
Despite the large outlays for ICF-MR services, methods for determining reimbursement to a given facility are often based on historical average costs, which may have little or no relationship to the disability level of the residents being served (Myers and Stauffer, 1994).
The direct cost of care includes staff and resource requirements necessary to provide disability-level-appropriate care to an individual resident of an ICF-MR. Direct costs are closely related to an individual resident's level of disability, but the link between these costs and resident disability level is not well developed.
The DDP data for our sample were validated on a 10-percent random sample, stratified on individual and facility characteristics, drawn from the population of ICF-MR residents.
In addition to these parcels, we added several variables that ICF-MR staff felt were important for predicting resource use: whether the resident uses a wheelchair or has a psychiatric diagnosis, and the resident's age and age squared.
Instead we use the predicted log cost as a predicted resource use (PRU) weight, in order to capture the intensity of resources needed to care for a given individual, relative to all other ICF-MR residents in the State.
The results of our study confirm earlier work in New York that showed that the DDP can reasonably predict expected resource consumption for individual residents in ICF-MR facilities.
However, more research is needed to control for these facility-specific differences to determine the extent to which the DDP accurately captures the particular individual resource needs across the array of disabilities seen in the ICF-MR setting.
Of particular note in this respect are long-term institutional care services, such as NF, inpatient mental health, and ICF-MR
services, where white people constitute more than two-thirds of the users.