H.B. 249

This document includes House Floor Amendments incorporated into the bill on Wed, Feb 18, 2004 at 5:19 PM by kholt. --> 1

NURSING CARE FACILITY MEDICAID
2 CERTIFICATION AMENDMENTS
3 2004 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Rebecca D. Lockhart
6
7 LONG TITLE
8 General Description:
9 This bill amends the procedure used by the Department of Health to certify nursing care
10 facilities for Medicaid reimbursement.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . prohibits the department from certifying any additional beds for Medicaid
15 reimbursement unless certain criteria are met;
16 . establishes the criteria for certifying additional beds for Medicaid reimbursement;
17 . provides an appeal process when the department rejects a request for additional
18 Medicaid beds; and
19 . provides rulemaking authority.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 This bill takes effect on July 1, 2004.
24 Utah Code Sections Affected:
25 ENACTS:
26 26-18-501, Utah Code Annotated 1953
27 26-18-502, Utah Code Annotated 1953

28 26-18-503, Utah Code Annotated 1953
29 26-18-504, Utah Code Annotated 1953
30
31 Be it enacted by the Legislature of the state of Utah:
32 Section 1. Section 26-18-501 is enacted to read:
33 Part 5. Long Term Care Facility - Medicaid Certification
34 26-18-501. Definitions.
35 As used in this part:
36 (1) "Certified program" means a nursing care facility program with Medicaid
37 certification.
38 (2) "Director" means the director of the Division of Health Care Financing.
39 (3) "Medicaid certification" means the right to Medicaid reimbursement as a provider
40 of a nursing care facility program as established by division rule.
41 (4) (a) "Nursing care facility" means the following facilities licensed by the department
42 under Chapter 21, Health Care Facility Licensing and Inspection Act:
43 (i) skilled nursing homes;
44 (ii) intermediate care facilities; and
45 (iii) intermediate care facilities for the mentally retarded.
46 (b) "Nursing care facility" does not mean a critical access hospital that meets the
47 criteria of 42 U.S.C. 13951-4(c)(2) (1998).
48 (5) "Nursing care facility program" means the personnel, licenses, services, contracts
49 and all other requirements that must be met for a nursing care facility to be eligible for
50 Medicaid certification under this part and division rule.
51 (6) "Physical facility" means the buildings or other physical structures where a nursing
52 care facility program is operated.
53 (7) "Service area" means the boundaries of the distinct geographic area served by a
54 certified program as determined by the division in accordance with this part and division rule.
55 Section 2. Section 26-18-502 is enacted to read:
56 26-18-502. Purpose -- Medicaid certification of nursing care facilities.
57 (1) The Legislature finds:
58 (a) that an oversupply of nursing care facility programs in the state adversely affects the

59 state Medicaid program and the health of the people in the state; and
60 (b) it is in the best interest of the state to prohibit Medicaid certification of nursing care
61 facility programs, except as authorized by this part.
62 (2) Medicaid reimbursement of nursing care facility programs is limited to:
63 (a) the number of nursing care facility programs with Medicaid certification as of
64 H [ January 13, 1989 ] MAY 4, 2004 h ; and
65 (b) additional nursing care facility programs approved for Medicaid certification under
66 the provisions of Subsection 26-18-503 (5).
67 (3) The division shall not:
68 (a) except as authorized by Section 26-18-503 :
69 (i) process initial applications for Medicaid certification or execute provider
70 agreements with nursing care facility programs; or
71 (ii) reinstate Medicaid certification for a nursing care facility whose certification
72 expired or was terminated by action of the federal or state government; or
73 (b) execute a Medicaid provider agreement with a certified program that moves its
74 nursing care facility program to a different physical facility, except as authorized by Subsection
75 26-18-503 (3).
76 Section 3. Section 26-18-503 is enacted to read:
77 26-18-503. Authorization to renew, transfer, or increase Medicaid certified
78 programs.
79 (1) The division may renew Medicaid certification of a certified program if the
80 program, without lapse in service to Medicaid recipients, has its nursing care facility program
81 certified by the division at the same physical facility.
82 (2) (a) The division may issue a Medicaid certification for a new nursing care facility
83 program if a current owner of the Medicaid certified program transfers its ownership of the
84 Medicaid certification to the new nursing care facility program and the new nursing care
85 facility program meets all of the following conditions:
86 (i) the new nursing care facility program operates at the same physical facility as the
87 previous Medicaid certified program;
88 (ii) the new nursing care facility program gives a written assurance to the director in
89 accordance with Subsection (4); and

90 (iii) the new nursing care facility program receives the Medicaid certification within
91 one year of the date the previously certified program ceased to provide medical assistance to a
92 Medicaid recipient.
93 (b) A nursing care facility program that receives Medicaid certification under the
94 provisions of Subsection (2)(a) does not assume the Medicaid liabilities of the previous nursing
95 care facility program if the new nursing care facility program:
96 (i) is not owned in whole or in part by the previous nursing care facility program; or
97 (ii) is not a successor in interest of the previous nursing care facility program.
98 (3) The division may issue a Medicaid certification to a nursing care facility program
99 that was previously a certified program but now resides in a new or renovated physical facility
100 if the nursing care facility program meets all of the following:
101 (a) the nursing care facility program met all applicable requirements for Medicaid
102 certification at the time of closure;
103 (b) the new or renovated physical facility is in the same county or within a five-mile
104 radius of the original physical facility;
105 (c) the time between which the certified program ceased to operate in the original
106 facility and will begin to operate in the new physical facility is not more than three years;
107 (d) if Subsection (3)(c) applies, the certified program notifies the department within 90
108 days after ceasing operations in its original facility, of its intent to retain its Medicaid
109 certification;
110 (e) the provider gives written assurance to the director in accordance with Subsection
111 (4) that no third party has a legitimate claim to operate a certified program at the previous
112 physical facility; and
113 (f) the bed capacity in the physical facility that will be used for additional Medicaid
114 certification has not been expanded by more than 30% over the previously certified program's
115 bed capacity, unless the director has approved additional beds in accordance with Subsection
116 (5).
117 (4) (a) The entity requesting Medicaid certification under Subsections (2) and (3) must
118 give written assurances satisfactory to the director or his designee that:
119 (i) no third party has a legitimate claim to operate the certified program;
120 (ii) the requesting entity agrees to defend and indemnify the department against any

121 claims by a third party who may assert a right to operate the certified program; and
122 (iii) if a third party is found, by final agency action of the department after exhaustion
123 of all administrative and judicial appeal rights, to be entitled to operate a certified program at
124 the physical facility the certified program shall voluntarily comply with Subsection (4)(b).
125 (b) If a finding is made under the provisions of Subsection (4)(a)(iii):
126 (i) the certified program shall immediately surrender its Medicaid certification and
127 comply with division rules regarding billing for Medicaid and the provision of services to
128 Medicaid patients; and
129 (ii) the department shall transfer the surrendered Medicaid certification to the third
130 party who prevailed under Subsection (4)(a)(iii).
131 (5) (a) As provided in Subsection 26-21-502 (2)(b), the director shall issue additional
132 Medicaid certification when requested by a nursing care facility or other interested party if
133 there is insufficient bed capacity with current certified programs in a service area. A
134 determination of insufficient bed capacity shall be based on the nursing care facility or other
135 interested party providing reasonable evidence of an inadequate number of beds in the county
136 or group of counties impacted by the requested Medicaid certification based on:
137 (i) current demographics which demonstrate nursing care facility occupancy levels of at
138 least 90% for all existing and proposed facilities within a prospective three-year period;
139 (ii) current nursing care facility occupancy levels of 90%; or
140 (iii) no other nursing care facility within a 35-mile radius of the nursing care facility
141 requesting the additional certification.
142 (b) In addition to the requirements of Subsection (5)(a), a nursing care facility program
143 must demonstrate by an independent analysis that the nursing care facility can financially
144 support itself at an after tax break-even net income level based on projected occupancy levels.
145 (c) When making a determination to certify additional beds or an additional nursing
146 care facility program under Subsection (5)(a):
147 (i) the director shall consider whether the nursing care facility will offer specialized or
148 unique services that are underserved in a service area;
149 (ii) the director shall consider whether any Medicaid certified beds are subject to a
150 claim by a previous certified program that may reopen under the provisions of Subsections (2)
151 and (3); and

152 (iii) the director may consider how to add additional capacity to the long-term care
153 delivery system to best meet the needs of Medicaid recipients.
154 Section 4. Section 26-18-504 is enacted to read:
155 26-18-504. Appeals of division decision -- Rulemaking authority -- Application of
156 act.
157 (1) A decision by the director under this part to deny Medicaid certification for a
158 nursing care facility program or to deny additional bed capacity for an existing certified
159 program is subject to review under the procedures and requirements of Title 63, Chapter 46b,
160 Administrative Procedures Act.
161 (2) The department shall make rules to administer and enforce this part in accordance
162 with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
163 (3) A nursing care facility may receive Medicaid certification under the rules in effect
164 prior to July 1, 2004 if the nursing care facility, prior to H [ July 1 ] MAY 4 h , 2004:
165 (a) paid applicable fees to the department; and
166 (b) H [ received preliminary approval of the facility's construction plan by the department ]
166a SUBMITS CONSTRUCTION PLANS TO THE DEPARTMENT h ;
167 or
168 (c) is in a current phase of construction approved by the department.
169 Section 5. Effective date.
170 This bill takes effect on July 1, 2004.




Legislative Review Note
as of 1-22-04 1:30 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel