DEPARTMENT OF PUBLIC WELFARE
Office of Medical Assistance Programs; Payments to Nursing Facilities; Notice of Change in Methods and Standards of Setting Payment Rates
[27 Pa.B. 4792]
The purpose of this announcement is to provide advance notice under 42 CFR 447.205 that the Department of Public Welfare (Department) proposes to make changes in its methods and standards for setting payment rates for nursing facilities during FY 1997-98. Specifically, the Department proposes to amend its payment standards to specify the circumstances in which the Department will make capital component payments for replacement beds. This notice also announces the Department's intention to issue a policy establishing a process and guidelines to review requests by applicants or participating providers to increase the number of Medical Assistance (MA) certified nursing facility beds.
The Department's Replacement Bed Statement Policy
Department regulations relating to reimbursement for nursing facilities enrolled and participating in the Commonwealth's Medical Assistance (MA) Program authorize capital component payments for replacement beds only if the nursing facility was ''issued a Certificate of Need or a letter of nonreviewability for the project by the Department of Health.'' 55 Pa. Code § 1187.113(a)(3). Because Chapter 7 and all other portions of the Health Care Facilities Act (35 P. S. §§ 448.701--448.712) pertaining to Certificate of Need (CON) sunset on December 18, 1996, the Department must amend its regulations to authorize capital payments for replacement beds constructed subsequent to the sunset of the CON program. Pending the promulgation of these amendments, the Department will issue a statement of policy and amend its State Plan to clarify the circumstances under which the Department will make capital component payments for replacement beds. The purpose of the replacement bed policy is to ensure that the Commonwealth will authorize capital component payments for replacement beds (up to applicable regulatory limits) only when the Department has determined that there is a need for the beds.
The Department's new policy will require a nursing facility provider that intends to seek capital payments for replacement beds to obtain the Department's approval before it begins construction. To qualify for capital component payments as a replacement bed, a replacement bed must replace a pre-moratorium bed, that is, a bed that was built under a CON dated on or before August 31, 1982 and for which the Department is making a capital payment under these regulations. The new policy will also specify the factors that the Department will consider in determining to grant approval of a replacement bed project. The Department will consider, among other things, bed shortages or surpluses in the provider's service area, the basis for the construction of replacement beds and the economic feasibility of the project.
If the Department determines that a provider's project qualifies for capital component payments as a replacement bed project, those payments will be calculated consistent with the Department's case-mix regulations (55 Pa. Code §§ 1187.1--1187.141). Since the policy would simply authorize the Department to continue to make capital payments for replacement beds in accordance with existing payment methods and standards, the Department does not anticipate any change in aggregate annual expenditures.
The Department's Policy Regarding Enrollment and Expansion of Nursing Facilities
Federal law requires, among other things, that the Department guard against over utilization and misutilization of MA services and to avoid unnecessary costs to the MA Program. See 42 U.S.C.A. § 1396a(a)(30)(A). Prior to December 19, 1996, the Department relied, in part, upon the CON process to meet these Federal requirements. With the sunset of the CON program, the Department took steps to enable it to continue to fulfill its obligations under Federal law.
The Department, by statement of policy effective December 19, 1996, adopted an interim policy announcing that, as a general matter, it intended to exercise its discretion to terminate or to refuse to enter into a MA provider agreement with a provider of nursing facility services that sought to increase the number of MA certified nursing facility beds through enrollment or expansion, unless the Department granted an exception on a case-by-case basis to permit that provider to enroll or expand; or, in the case of an enrolled provider, the provider did not expand by more than ten beds or 10%, whichever was less, over a 2-year period. See 26 Pa.B. 5996 (December 14, 1996). The Department revised its interim policy effective August 11, 1997, to prohibit enrolled nursing facility providers from expanding their existing licensed bed capacity, under any circumstances, without first receiving an exception from the Department. See 27 Pa.B. 4005 (August 9, 1997).
When it published its initial interim statement of policy, the Department announced its intention to supersede the interim policy with a permanent MA/Long Term Care (LTC) participation review process. To that end, the Department developed a process and guidelines that it intends to use to grant exceptions on a case-by-case basis to its general policy to deny or terminate MA enrollment. In conducting its case-by-case reviews under these guidelines, the Department will consider, among other things: the extent to which MA recipients, day-one MA recipients, and/or technology-dependent recipients have access to nursing facility services in the applicant's or provider's primary service area; the availability and potential availability of other support services for MA recipients, including home and community-based services; the need for additional nursing facility beds in the applicant's or provider's primary service area; and the economic and financial feasibility of the project. The guidelines also specify the time frame within which the Department will review exceptions requests.
Because the guidelines do not alter existing payment methods and standards, but only specify the information that the Department views as relevant in determining whether to grant exceptions permitting the enrollment or expansion of nursing facility providers, the Department does not anticipate any change in aggregate annual expenditures.
Public Comments on the Replacement Bed and MA/LTC Participation Review Policies
Before it implements its Replacement Bed and MA/LTC Participation review policies, the Department is making them available for public review and comment. Copies of both policies are available for review at the local County Assistance Offices throughout the Commonwealth. The Department will also discuss and solicit input on these policies at meetings that will be held in Room 327, Health and Welfare Building, Harrisburg on September 24, 1997, 1 p.m. (Medical Assistance Advisory Committee (MAAC) Consumer Subcommittee) and September 25, 1997, 10 a.m. (MAAC). These meetings are open to the public. In addition, the Department invites interested persons to submit written comments about the proposed statements of policy to the Department by September 30, 1997.
Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (Voice users). Persons who require another alternative should contact Thomas Vracarich in the Office of Legal Counsel at (717) 783-2209. Comments should be addressed to: Regulations Coordinator, Office of Medical Assistance, Room 515 Health and Welfare Building, Harrisburg, PA 17120, (717) 787-1870.
Following review and consideration of comments, the Department anticipates publishing statements of policy on the reimbursement of replacement beds and the MA/LTC Participation Review process in the Pennsylvania Bulletin by November 1, 1997.
FEATHER O HOUSTOUN,
Fiscal Note: 14-NOT-152. No fiscal impact; (8) recommends adoption. There is no cost associated with this policy change since facilities will still have to obtain the Department of Public Welfare's approval before constructing replacement beds and the existing payment methods and standards will remain the same.
[Pa.B. Doc. No. 97-1483. Filed for public inspection September 12, 1997, 9:00 a.m.]
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