No. 32064 (Amendment): R414-27. Medicaid Certification of Nursing Care Facilities

DAR File No.: 32064
Filed: 10/15/2008, 05:55
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to implement Medicaid certification requirements for nursing facilities in accordance with H.B. 366 (2008 General Session). H.B. 366 will not allow, in most cases, any increase in bed capacity for Medicaid-certified nursing facilities. (DAR NOTE: H.B. 366 (2008) is found at Chapter 347, Laws of Utah 2008, and was effective 03/18/2008.)

Summary of the rule or change:

This change specifies Medicaid certification requirements for nursing care facilities. Facilities will not be allowed to increase bed capacity in most cases.

State statutory or constitutional authorization for this rule:

Sections 26-18-3 and 26-18-503

Anticipated cost or savings to:

the state budget:

There may be a savings to the state budget because of this rule change. Additional under-utilized nursing facility beds add costs to the system that are reflected in nursing facility reimbursement rates. With this rule, facilities will not be allowed to expand, in most cases, which may mitigate upward pressure on nursing home reimbursement resulting from excess bed capacity. The exact amount cannot be quantified.

local governments:

Local governments would be minimally affected by this rule. Of the 77 nursing facilities in the state, only 3 are owned by local governments. They would be impacted in the same manner as non-publicly owned facilities.

small businesses and persons other than businesses:

Nursing care facilities will not be allowed to expand. This could have a negative impact on an individual facility's revenue if it has the potential to expand beds and attract more clients. However, the number of its occupied beds may increase as overall bed capacity in the system is stabilized. If so, the fiscal impact of the rule would be positive as facility fixed costs are spread over more resident patient days. The exact amount cannot be quantified.

Compliance costs for affected persons:

This rule is beneficial to the nursing facility industry, as a whole, in that it limits additional beds in the system and allows occupancy rates to rise due to less bed availability. As occupancy rises, efficiency increases and costs are spread across an increased number of resident patient days. The exact cost cannot be quantified.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will have no direct compliance cost for business. Expansion of bed capacity will be limited. Balanced against the current occupancy rate in the industry of below 70%, this rule should have a positive fiscal impact on the industry. David N. Sundwall, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY UT 84116-3231

Direct questions regarding this rule to:

Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/01/2008

This rule may become effective on:

12/08/2008

Authorized by:

David N. Sundwall, Executive Director

RULE TEXT

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

R414-27. Medicaid Certification of Nursing Care Facilities.

R414-27-2. Definitions.

"Third party owner" means any one of or combination of the following:

(1) the owner of a building from which a nursing care facility operates;

(2) the owner of land on which a nursing care facility operates;

(3) the owner of a nursing care facility program licensed by the Department pursuant to the Utah Health Facility Licensing Act;

(4) the holder of a Medicaid certification for a nursing care facility;

(5) the lessor of the building from which a nursing care facility operates;

(6) the lessor of the land on which a nursing care facility operates;

(7) the mortgagor of the building from which a nursing care facility operates;

(8) the mortgagor of the land on which a nursing care facility operates;

(9) the management team responsible for executing the operations of a nursing care facility;

(10) a lien security interest holder in the land on which a nursing care facility operates;

(11) a lien security interest in the building from which a nursing care facility operates; and

(12) a lien security interest holder in the nursing facility business operation.

 

R414-27-[2]3. Medicaid Certification Requirements.

(1) The director of the Division of Health Care Financing (DHCF) within the Department of Health may authorize Medicaid certification for a nursing care facility that:

(a) is in compliance with 42 CFR Part 483 or has a plan of correction approved by the Department to remedy areas of noncompliance;

(b) is in compliance with the Health Care Facility Licensing and Inspection Act, Title 26, Chapter 21, and the rules applicable to nursing homes made pursuant to that act or has a plan of correction approved by the Department to remedy areas of noncompliance;

(c) has not increased its certified bed capacity by more than 30 percent annually after March 31, 2004, except as authorized in Subsection 26-18-503(5);

(d) is Medicare-certified by the Centers for Medicare & Medicaid Services to provide care for Medicare clients;

([d]e) since March 18, 2008, has not increased its licensed bed capacity except in conjunction with an increase in certified bed capacity as authorized in Subsection 26-18-503(5) or for which the DHCF Director has approved the increase in the nursing care facility program's certified bed capacity expansion before October 15, 2007; and

([e]f) since March 18, 2008, has not increased its certified bed capacity except as authorized in Subsection 26-18-503(5).

(2) The "independent analysis" referred to in Subsection 26-18-503(5)(b) must be performed by unrelated certified public accountants in accordance with generally accepted accounting principles.

(3) A nursing care facility is not eligible for Medicaid certification if it expands bed capacity without prior approval from the DHCF Director as authorized in this section.

 

R414-27-4. Medicaid Certification Subsequent to Change of Ownership.

(1) The owner of a nursing care facility program may transfer ownership to another person. The transferred nursing care facility may become Medicaid certified if:

(a) the nursing care facility is in compliance with Section R414-27-3 at the time of transfer;

(b) the transferee operates the nursing care facility at the same physical location as the previous Medicaid-certified program;

(c) the transferee agrees to pay the Department's litigation costs if any third party asserts a right to operate the transferred Medicaid-certified nursing care facility;

(d) the transferee certifies that bed capacity will not expand through a third party owner with a legitimate claim to operate the transferred Medicaid-certified nursing care facility;

(e) the transferee applies for and takes all necessary steps to become Medicaid-certified within one year of the date the previously certified nursing care facility ceased to provide medical assistance to a Medicaid client;

(2) If a third party is found, by final agency action of the Department after exhaustion of all administrative and judicial appeal rights, to be entitled to operate a certified program at the physical facility, the transferee shall voluntarily comply with Subsection 26-18-503(4)(b). The Department of Health may revoke Medicaid certification if the transferee does not comply with Subsection 26-18-503(4)(b).

(3) the transferee that receives Medicaid certification after taking ownership under the provisions of Subsection R414-27-4(1) does not assume the Medicaid liabilities of the previous nursing care facility program if the transferee is not a third party owner in whole or in part of the previous nursing care facility.

 

R414-27-5. Medicaid Certification Subsequent to Renovation or Construction of a New Physical Facility.

A nursing care facility operating in a new or renovated facility is eligible for re-certification if the nursing care facility:

(1) was certified at the time of renovation or new construction;

(2) was in compliance with Sections R414-27-3 and R414-27-4 when it ceased providing care to Medicaid clients at the prior location or before beginning renovations;

(3) is in the same county or within a five-mile, paved public road radius of the original facility;

(4) the construction is completed no later than three years after the date the nursing care facility ceased to operate in the original facility; and

(5) notifies DHCF no later than 90 days after the date outlined in Subsection R414-27-5(1)(a) of its intent to retain its Medicaid certification.

 

KEY: Medicaid

Date of Enactment or Last Substantive Amendment: [July 1], 2008

Notice of Continuation: January 17, 2008

Authorizing, Implemented or Interpreted Law: 26-1-5; 26-18-3; 26-18-503