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S.B. 54

             1     

LICENSING OF NURSING CARE FACILITY BEDS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Curtis S. Bramble

             5     
House Sponsor: James A. Dunnigan

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the licensing of non-Medicaid nursing care facility beds for a facility
             10      with 100 or more beds and provides continuity of care provisions for patients who have
             11      exhausted Medicare benefits.
             12      Highlighted Provisions:
             13          This bill:
             14          .    authorizes the department to license non-Medicaid nursing care facility beds for a
             15      facility that will have at least 100 beds;
             16          .    if a facility has 100 or more beds, authorizes the department to convert a limited
             17      number of non-Medicaid certified beds in the nursing care facility to Medicaid
             18      certified beds for continuity of care for patients who have exhausted personal
             19      resources and Medicare reimbursements; and
             20          .    extends the moratorium on licensing of non-Medicaid certified beds until July 1,
             21      2018.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:


             28          26-18-502, as last amended by Laws of Utah 2011, Chapter 297
             29          26-18-503, as last amended by Laws of Utah 2011, Chapters 120 and 297
             30          26-21-23, as last amended by Laws of Utah 2008, Chapter 382
             31          63I-1-226, as last amended by Laws of Utah 2012, Chapters 171 and 328
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 26-18-502 is amended to read:
             35           26-18-502. Purpose -- Medicaid certification of nursing care facilities.
             36          (1) The Legislature finds:
             37          (a) that an oversupply of nursing care facility programs in the state adversely affects the
             38      state Medicaid program and the health of the people in the state; and
             39          (b) it is in the best interest of the state to prohibit Medicaid certification of nursing care
             40      facility programs, except as authorized by this part.
             41          (2) Medicaid reimbursement of nursing care facility programs is limited to:
             42          (a) the number of nursing care facility programs with Medicaid certification as of May
             43      4, 2004; and
             44          (b) additional nursing care facility programs approved for Medicaid certification under
             45      the provisions of [Subsection] Subsections 26-18-503 (5) and (7).
             46          (3) The division may not:
             47          (a) except as authorized by Section 26-18-503 :
             48          (i) process initial applications for Medicaid certification or execute provider
             49      agreements with nursing care facility programs; or
             50          (ii) reinstate Medicaid certification for a nursing care facility whose certification
             51      expired or was terminated by action of the federal or state government; or
             52          (b) execute a Medicaid provider agreement with a certified program that moves its
             53      nursing care facility program to a different physical facility, except as authorized by Subsection
             54      26-18-503 (3).
             55          Section 2. Section 26-18-503 is amended to read:
             56           26-18-503. Authorization to renew, transfer, or increase Medicaid certified
             57      programs -- Reimbursement methodology.
             58          (1) (a) The division may renew Medicaid certification of a certified program if the


             59      program, without lapse in service to Medicaid recipients, has its nursing care facility program
             60      certified by the division at the same physical facility as long as the licensed and certified bed
             61      capacity at the facility has not been expanded, unless the director has approved additional beds
             62      in accordance with Subsection (5).
             63          (b) The division may renew Medicaid certification of a nursing care facility program
             64      that is not currently certified if:
             65          (i) since the day on which the program last operated with Medicaid certification:
             66          (A) the physical facility where the program operated has functioned solely and
             67      continuously as a nursing care facility; and
             68          (B) the owner of the program has not, under this section or Section 26-18-505 ,
             69      transferred to another nursing care facility program the license for any of the Medicaid beds in
             70      the program; and
             71          (ii) the number of beds granted renewed Medicaid certification does not exceed the
             72      number of beds certified at the time the program last operated with Medicaid certification,
             73      excluding a period of time where the program operated with temporary certification under
             74      Subsection 26-18-504 (4).
             75          (2) (a) The division may issue a Medicaid certification for a new nursing care facility
             76      program if a current owner of the Medicaid certified program transfers its ownership of the
             77      Medicaid certification to the new nursing care facility program and the new nursing care
             78      facility program meets all of the following conditions:
             79          (i) the new nursing care facility program operates at the same physical facility as the
             80      previous Medicaid certified program;
             81          (ii) the new nursing care facility program gives a written assurance to the director in
             82      accordance with Subsection (4);
             83          (iii) the new nursing care facility program receives the Medicaid certification within
             84      one year of the date the previously certified program ceased to provide medical assistance to a
             85      Medicaid recipient; and
             86          (iv) the licensed and certified bed capacity at the facility has not been expanded, unless
             87      the director has approved additional beds in accordance with Subsection (5).
             88          (b) A nursing care facility program that receives Medicaid certification under the
             89      provisions of Subsection (2)(a) does not assume the Medicaid liabilities of the previous nursing


             90      care facility program if the new nursing care facility program:
             91          (i) is not owned in whole or in part by the previous nursing care facility program; or
             92          (ii) is not a successor in interest of the previous nursing care facility program.
             93          (3) The division may issue a Medicaid certification to a nursing care facility program
             94      that was previously a certified program but now resides in a new or renovated physical facility
             95      if the nursing care facility program meets all of the following:
             96          (a) the nursing care facility program met all applicable requirements for Medicaid
             97      certification at the time of closure;
             98          (b) the new or renovated physical facility is in the same county or within a five-mile
             99      radius of the original physical facility;
             100          (c) the time between which the certified program ceased to operate in the original
             101      facility and will begin to operate in the new physical facility is not more than three years;
             102          (d) if Subsection (3)(c) applies, the certified program notifies the department within 90
             103      days after ceasing operations in its original facility, of its intent to retain its Medicaid
             104      certification;
             105          (e) the provider gives written assurance to the director in accordance with Subsection
             106      (4) that no third party has a legitimate claim to operate a certified program at the previous
             107      physical facility; and
             108          (f) the bed capacity in the physical facility has not been expanded unless the director
             109      has approved additional beds in accordance with Subsection (5).
             110          (4) (a) The entity requesting Medicaid certification under Subsections (2) and (3) shall
             111      give written assurances satisfactory to the director or the director's designee that:
             112          (i) no third party has a legitimate claim to operate the certified program;
             113          (ii) the requesting entity agrees to defend and indemnify the department against any
             114      claims by a third party who may assert a right to operate the certified program; and
             115          (iii) if a third party is found, by final agency action of the department after exhaustion
             116      of all administrative and judicial appeal rights, to be entitled to operate a certified program at
             117      the physical facility the certified program shall voluntarily comply with Subsection (4)(b).
             118          (b) If a finding is made under the provisions of Subsection (4)(a)(iii):
             119          (i) the certified program shall immediately surrender its Medicaid certification and
             120      comply with division rules regarding billing for Medicaid and the provision of services to


             121      Medicaid patients; and
             122          (ii) the department shall transfer the surrendered Medicaid certification to the third
             123      party who prevailed under Subsection (4)(a)(iii).
             124          (5) (a) As provided in Subsection 26-18-502 (2)(b), the director shall issue additional
             125      Medicaid certification when requested by a nursing care facility or other interested party if
             126      there is insufficient bed capacity with current certified programs in a service area. A
             127      determination of insufficient bed capacity shall be based on the nursing care facility or other
             128      interested party providing reasonable evidence of an inadequate number of beds in the county
             129      or group of counties impacted by the requested Medicaid certification based on:
             130          (i) current demographics which demonstrate nursing care facility occupancy levels of at
             131      least 90% for all existing and proposed facilities within a prospective three-year period;
             132          (ii) current nursing care facility occupancy levels of 90%; or
             133          (iii) no other nursing care facility within a 35-mile radius of the nursing care facility
             134      requesting the additional certification.
             135          (b) In addition to the requirements of Subsection (5)(a), a nursing care facility program
             136      shall demonstrate by an independent analysis that the nursing care facility can financially
             137      support itself at an after tax break-even net income level based on projected occupancy levels.
             138          (c) When making a determination to certify additional beds or an additional nursing
             139      care facility program under Subsection (5)(a):
             140          (i) the director shall consider whether the nursing care facility will offer specialized or
             141      unique services that are underserved in a service area;
             142          (ii) the director shall consider whether any Medicaid certified beds are subject to a
             143      claim by a previous certified program that may reopen under the provisions of Subsections (2)
             144      and (3); and
             145          (iii) the director may consider how to add additional capacity to the long-term care
             146      delivery system to best meet the needs of Medicaid recipients.
             147          (6) The department shall adopt administrative rules in accordance with Title 63G,
             148      Chapter 3, Utah Administrative Rulemaking Act, to adjust the Medicaid nursing care facility
             149      property reimbursement methodology to:
             150          (a) beginning July 1, 2008, only pay that portion of the property component of rates,
             151      representing actual bed usage by Medicaid clients as a percentage of the greater of:


             152          (i) actual occupancy; or
             153          (ii) (A) for a nursing care facility other than a facility described in Subsection
             154      (6)(a)(ii)(B), 85% of total bed capacity; or
             155          (B) for a rural nursing care facility, 65% of total bed capacity; and
             156          (b) beginning July 1, 2008, not allow for increases in reimbursement for property
             157      values without major renovation or replacement projects as defined by the department by rule.
             158          (7) (a) Notwithstanding Subsection 26-18-504 (4), if a nursing care facility does not
             159      seek Medicaid certification for a bed under the provisions of Subsections (1) through (6), the
             160      department shall grant Medicaid certification for a licensed non-Medicaid certified bed if:
             161          (i) the nursing care facility is licensed under Subsection 26-21-23 (2)(b);
             162          (ii) the nursing care facility meets the quality of care regulations issued by the Center
             163      for Medicare and Medicaid Services;
             164          (iii) the Medicaid certified bed will be used by a patient who:
             165          (A) is a resident of the nursing care facility;
             166          (B) has exhausted the patient's Medicare benefits for skilled nursing services; and
             167          (C) qualifies for Medicaid; and
             168          (iv) the total number of licensed beds in the facility that are granted Medicaid
             169      certification under the provisions of this Subsection (7)(a) does not exceed 10% of the total
             170      number of licensed beds in the facility.
             171          (b) The department may not revoke the Medicaid certification of a bed under this
             172      Subsection (7) as long as the provisions of Subsections (7)(a)(ii) and (iii) are met.
             173          Section 3. Section 26-21-23 is amended to read:
             174           26-21-23. Licensing of non-Medicaid nursing care facility beds.
             175          (1) Notwithstanding the provisions of Section 26-21-2 , for purposes of this section
             176      "nursing care facility" and "small health care facility":
             177          (a) mean the following facilities licensed by the department under this chapter:
             178          (i) skilled nursing homes;
             179          (ii) intermediate care facilities; or
             180          (iii) small health care facilities with four to 16 beds functioning as a skilled nursing
             181      home; and
             182          (b) does not mean:


             183          (i) an intermediate care facility for the mentally retarded;
             184          (ii) a critical access hospital that meets the criteria of 42 U.S.C. 1395i-4(c)(2) (1998);
             185          (iii) a small health care facility [which] that is hospital based; or
             186          (iv) a small health care facility other than a skilled nursing home with 16 beds or less.
             187          (2) Except as provided in Subsection (5), a new nursing care facility shall be approved
             188      for a health facility license only if the applicant proves to the division that:
             189          (a) the facility will be Medicaid certified under the provisions of Section 26-18-503 ;
             190          (b) the facility will have at least [120] 100 beds; or
             191          (c) (i) the facility's projected Medicare inpatient revenues do not exceed 49% of the
             192      facility's revenues;
             193          (ii) the facility has identified projected non-Medicare inpatient revenue sources; and
             194          (iii) the non-Medicare inpatient revenue sources identified in this Subsection (2)(c)(iii)
             195      will constitute at least 51% of the revenues as demonstrated through an independently certified
             196      feasibility study submitted and paid for by the facility and provided to the division.
             197          (3) The division may not approve the addition of licensed beds in an existing nursing
             198      care facility unless the nursing care facility satisfies the criteria established in Subsection (2).
             199          (4) The department may make rules to administer and enforce this part in accordance
             200      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             201          (5) The provisions of Subsection (2) do not apply to a nursing care facility that has:
             202          (a) filed an application with the department and paid all applicable fees to the
             203      department on or before February 28, 2007; and
             204          (b) submitted to the department the working drawings, as defined by the department by
             205      administrative rule, on or before July 1, 2008.
             206          Section 4. Section 63I-1-226 is amended to read:
             207           63I-1-226. Repeal dates, Title 26.
             208          (1) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
             209      1, 2015.
             210          (2) Section 26-18-12 , Expansion of 340B drug pricing programs, is repealed July 1,
             211      2013.
             212          (3) Section 26-21-23 , Licensing of non-Medicaid nursing care facility beds, is repealed
             213      July 1, [2016] 2018.


             214          (4) Section 26-21-211 is repealed July 1, 2013.
             215          (5) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1, 2014.
             216          (6) Title 26, Chapter 36a, Hospital Provider Assessment Act, is repealed July 1, 2013.
             217          (7) Section 26-38-2.5 is repealed July 1, 2017.
             218          (8) Section 26-38-2.6 is repealed July 1, 2017.




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    as of 1-30-13 10:09 AM


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