Representative Francis D. Gibson proposes the following substitute bill:


1     
NURSING CARE FACILITY AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Francis D. Gibson

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions in the Utah Health Code related to nursing care facilities.
10     Highlighted Provisions:
11          This bill:
12          ▸     allows the Department of Health to consider the quality of nursing care facilities in
13     a county when determining whether to certify additional Medicaid beds in the
14     county;
15          ▸     makes technical changes;
16          ▸     changes the Nursing Care Facilities Account to an expendable special revenue fund;
17     and
18          ▸     removes the sunset review for the certification of Medicaid beds in nursing care
19     facilities.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          This bill provides a special effective date.
24     Utah Code Sections Affected:
25     AMENDS:
26          26-18-503, as last amended by Laws of Utah 2016, Chapter 276
27          26-18-504, as last amended by Laws of Utah 2008, Chapters 347 and 382
28          26-18-505, as last amended by Laws of Utah 2016, Chapter 276
29          26-21-23, as last amended by Laws of Utah 2016, Chapters 276 and 357
30          26-35a-104, as enacted by Laws of Utah 2004, Chapter 284
31          26-35a-106, as last amended by Laws of Utah 2016, Chapter 276
32          26-35a-107, as last amended by Laws of Utah 2011, Chapter 297
33          63I-1-226, as last amended by Laws of Utah 2016, Chapters 89, 170, 279, and 327
34     Uncodified Material Affected:
35     ENACTS UNCODIFIED MATERIAL
36     

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 26-18-503 is amended to read:
39          26-18-503. Authorization to renew, transfer, or increase Medicaid certified
40     programs -- Reimbursement methodology.
41          (1) (a) The division may renew Medicaid certification of a certified program if the
42     program, without lapse in service to Medicaid recipients, has its nursing care facility program
43     certified by the division at the same physical facility as long as the licensed and certified bed
44     capacity at the facility has not been expanded, unless the director has approved additional beds
45     in accordance with Subsection (5).
46          (b) The division may renew Medicaid certification of a nursing care facility program
47     that is not currently certified if:
48          (i) since the day on which the program last operated with Medicaid certification:
49          (A) the physical facility where the program operated has functioned solely and
50     continuously as a nursing care facility; and
51          (B) the owner of the program has not, under this section or Section 26-18-505,
52     transferred to another nursing care facility program the license for any of the Medicaid beds in
53     the program; and
54          (ii) the number of beds granted renewed Medicaid certification does not exceed the
55     number of beds certified at the time the program last operated with Medicaid certification,
56     excluding a period of time where the program operated with temporary certification under
57     Subsection 26-18-504(4).
58          (2) (a) The division may issue a Medicaid certification for a new nursing care facility
59     program if a current owner of the Medicaid certified program transfers its ownership of the
60     Medicaid certification to the new nursing care facility program and the new nursing care
61     facility program meets all of the following conditions:
62          (i) the new nursing care facility program operates at the same physical facility as the
63     previous Medicaid certified program;
64          (ii) the new nursing care facility program gives a written assurance to the director in
65     accordance with Subsection (4);
66          (iii) the new nursing care facility program receives the Medicaid certification within
67     one year of the date the previously certified program ceased to provide medical assistance to a
68     Medicaid recipient; and
69          (iv) the licensed and certified bed capacity at the facility has not been expanded, unless
70     the director has approved additional beds in accordance with Subsection (5).
71          (b) A nursing care facility program that receives Medicaid certification under the
72     provisions of Subsection (2)(a) does not assume the Medicaid liabilities of the previous nursing
73     care facility program if the new nursing care facility program:
74          (i) is not owned in whole or in part by the previous nursing care facility program; or
75          (ii) is not a successor in interest of the previous nursing care facility program.
76          (3) The division may issue a Medicaid certification to a nursing care facility program
77     that was previously a certified program but now resides in a new or renovated physical facility
78     if the nursing care facility program meets all of the following:
79          (a) the nursing care facility program met all applicable requirements for Medicaid
80     certification at the time of closure;
81          (b) the new or renovated physical facility is in the same county or within a five-mile
82     radius of the original physical facility;
83          (c) the time between which the certified program ceased to operate in the original
84     facility and will begin to operate in the new physical facility is not more than three years;
85          (d) if Subsection (3)(c) applies, the certified program notifies the department within 90
86     days after ceasing operations in its original facility, of its intent to retain its Medicaid
87     certification;
88          (e) the provider gives written assurance to the director in accordance with Subsection
89     (4) that no third party has a legitimate claim to operate a certified program at the previous
90     physical facility; and
91          (f) the bed capacity in the physical facility has not been expanded unless the director
92     has approved additional beds in accordance with Subsection (5).
93          (4) (a) The entity requesting Medicaid certification under Subsections (2) and (3) shall
94     give written assurances satisfactory to the director or the director's designee that:
95          (i) no third party has a legitimate claim to operate the certified program;
96          (ii) the requesting entity agrees to defend and indemnify the department against any
97     claims by a third party who may assert a right to operate the certified program; and
98          (iii) if a third party is found, by final agency action of the department after exhaustion
99     of all administrative and judicial appeal rights, to be entitled to operate a certified program at
100     the physical facility the certified program shall voluntarily comply with Subsection (4)(b).
101          (b) If a finding is made under the provisions of Subsection (4)(a)(iii):
102          (i) the certified program shall immediately surrender its Medicaid certification and
103     comply with division rules regarding billing for Medicaid and the provision of services to
104     Medicaid patients; and
105          (ii) the department shall transfer the surrendered Medicaid certification to the third
106     party who prevailed under Subsection (4)(a)(iii).
107          (5) (a) As provided in Subsection 26-18-502(2)(b), the director may approve additional
108     nursing care facility programs for Medicaid certification, or additional beds for Medicaid
109     certification within an existing nursing care facility program, if a nursing care facility or other
110     interested party requests Medicaid certification for a nursing care facility program or additional
111     beds within an existing nursing care facility program, and the nursing care facility program or
112     other interested party complies with this section.
113          (b) The nursing care facility or other interested party requesting Medicaid certification
114     for a nursing care facility program or additional beds within an existing nursing care facility
115     program under Subsection (5)(a) shall submit to the director:
116          (i) proof of the following as reasonable evidence that bed capacity provided by
117     Medicaid certified programs within the county or group of counties impacted by the requested
118     additional Medicaid certification is insufficient:
119          (A) nursing care facility occupancy levels for all existing and proposed facilities will
120     be at least 90% for the next three years;
121          (B) current nursing care facility occupancy is 90% or more; or
122          (C) there is no other nursing care facility within a 35-mile radius of the nursing care
123     facility requesting the additional certification; and
124          (ii) an independent analysis demonstrating that at projected occupancy rates the nursing
125     care facility's after-tax net income is sufficient for the facility to be financially viable.
126          (c) Any request for additional beds as part of a renovation project are limited to the
127     maximum number of beds allowed in Subsection (7).
128          [(c)] (d) The director shall determine whether to issue additional Medicaid certification
129     by considering:
130          (i) whether bed capacity provided by certified programs within the county or group of
131     counties impacted by the requested additional Medicaid certification is insufficient, based on
132     the information submitted to the director under Subsection (5)(b);
133          (ii) whether the county or group of counties impacted by the requested additional
134     Medicaid certification is underserved by specialized or unique services that would be provided
135     by the nursing care facility;
136          (iii) whether any Medicaid certified beds are subject to a claim by a previous certified
137     program that may reopen under the provisions of Subsections (2) and (3); [and]
138          (iv) how additional bed capacity should be added to the long-term care delivery system
139     to best meet the needs of Medicaid recipients[, which may include the renovation of aging
140     nursing care facilities, as permitted by Subsection (7).]; and
141          (v) (A) whether the existing certified programs within the county or group of counties
142     have provided services of sufficient quality to merit at least a two-star rating in the Medicare
143     Five-Star Quality Rating System over the previous three-year period; and
144          (B) information obtained under Subsection (9).
145          (6) The department shall adopt administrative rules in accordance with Title 63G,
146     Chapter 3, Utah Administrative Rulemaking Act, to adjust the Medicaid nursing care facility
147     property reimbursement methodology to:
148          (a) only pay that portion of the property component of rates, representing actual bed
149     usage by Medicaid clients as a percentage of the greater of:
150          (i) actual occupancy; or
151          (ii) (A) for a nursing care facility other than a facility described in Subsection
152     (6)(a)(ii)(B), 85% of total bed capacity; or
153          (B) for a rural nursing care facility, 65% of total bed capacity; and
154          (b) not allow for increases in reimbursement for property values without major
155     renovation or replacement projects as defined by the department by rule.
156          (7) (a) Notwithstanding Subsection 26-18-504(4), if a nursing care facility does not
157     seek Medicaid certification for a bed under Subsections (1) through (6), the department shall
158     grant Medicaid certification for additional beds in an existing Medicaid certified nursing care
159     facility that has 90 or fewer licensed beds, including Medicaid certified beds, in the facility if:
160          (i) the nursing care facility program was previously a certified program for all beds but
161     now resides in a new facility or in a facility that underwent major renovations involving major
162     structural changes, [and] with 50% or greater facility square footage design changes, requiring
163     review and approval by the department;
164          (ii) the nursing care facility meets the quality of care regulations issued by the Center
165     for Medicare and Medicaid Services; and
166          (iii) the total number of additional beds in the facility granted Medicaid certification
167     under this section does not exceed 10% of the number of licensed beds in the facility.
168          (b) The department may not revoke the Medicaid certification of a bed under this
169     Subsection (7) as long as the provisions of Subsection (7)(a)(ii) are met.
170          (8) (a) If a nursing care facility or other interested party indicates in its request for
171     additional Medicaid certification under Subsection (5)(a) that the facility will offer specialized
172     or unique services, but the facility does not offer those services after receiving additional
173     Medicaid certification, the director [may] shall revoke the additional Medicaid certification.
174          [(b) If a nursing care facility or other interested party obtains Medicaid certification for
175     a nursing care facility program or additional beds within an existing nursing care facility
176     program under Subsection (5), but Medicaid reimbursement is not received for a bed within
177     three years of the date on which Medicaid certification was obtained for the bed under
178     Subsection (5), Medicaid certification for the bed is revoked.]
179          (b) The nursing care facility program shall obtain Medicaid certification for any
180     additional Medicaid beds approved under Subsection (5) or (7) within three years of the date of
181     the director's approval, or the approval is void.
182          (9) (a) If the director makes an initial determination that quality standards under
183     Subsection (5)(d)(v) have not been met in a rural county or group of rural counties over the
184     previous three-year period, the director shall, before approving certification of additional
185     Medicaid beds in the rural county or group of counties:
186          (i) notify the certified program that has not met the quality standards in Subsection
187     (5)(d)(v) that the director intends to certify additional Medicaid beds under the provisions of
188     Subsection (5)(d)(v); and
189          (ii) consider additional information submitted to the director by the certified program
190     in a rural county that has not met the quality standards under Subsection (5)(d)(v).
191          (b) The notice under Subsection (9)(a) does not give the certified program that has not
192     met the quality standards under Subsection (5)(d)(v), the right to legally challenge or appeal the
193     director's decision to certify additional Medicaid beds under Subsection (5)(d)(v).
194          Section 2. Section 26-18-504 is amended to read:
195          26-18-504. Appeals of division decision -- Rulemaking authority -- Application of
196     act.
197          (1) A decision by the director under this part to deny Medicaid certification for a
198     nursing care facility program or to deny additional bed capacity for an existing certified
199     program is subject to review under the procedures and requirements of Title 63G, Chapter 4,
200     Administrative Procedures Act.
201          (2) The department shall make rules to administer and enforce this part in accordance
202     with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
203          [(3) A nursing care facility may receive Medicaid certification under the rules in effect
204     prior to July 1, 2004 if the nursing care facility, prior to May 4, 2004:]
205          [(a) (i) paid applicable fees to the department; and]
206          [(ii) submits construction plans to the department; or]
207          [(b) is in a current phase of construction approved by the department.]
208          [(4)] (3) (a) In the event the department is at risk for a federal disallowance with regard
209     to a Medicaid recipient being served in a nursing care facility program that is not Medicaid
210     certified, the department may grant temporary Medicaid certification to that facility for up to 24
211     months.
212          (b) (i) The department may extend a temporary Medicaid certification granted to a
213     facility under Subsection [(4)] (3)(a):
214          (A) for the number of beds in the nursing care facility occupied by a Medicaid
215     recipient; and
216          (B) for the period of time during which the Medicaid recipient resides at the facility.
217          (ii) A temporary Medicaid certification granted under this Subsection [(4)] (3) is
218     revoked upon:
219          (A) the discharge of the patient from the facility; or
220          (B) the patient no longer residing at the facility for any reason.
221          (c) The department may place conditions on the temporary certification granted under
222     Subsections [(4)] (3)(a) and (b), such as:
223          (i) not allowing additional admissions of Medicaid recipients to the program; and
224          (ii) not paying for the care of the patient after October 1, 2008, with state only dollars.
225          Section 3. Section 26-18-505 is amended to read:
226          26-18-505. Authorization to sell or transfer licensed Medicaid beds -- Duties of
227     transferor -- Duties of transferee -- Duties of division.
228          (1) This section provides a method to transfer or sell the license for a Medicaid bed
229     from a nursing care facility program to another entity that is in addition to the authorization to
230     transfer under Section 26-18-503.
231          (2) (a) A nursing care facility program may transfer or sell one or more of its licenses
232     for Medicaid beds in accordance with Subsection (2)(b) if:
233          (i) at the time of the transfer, and with respect to the license for the Medicaid bed that
234     will be transferred, the nursing care facility program that will transfer the Medicaid license
235     meets all applicable regulations for Medicaid certification;
236          (ii) [30 days prior to the transfer,] the nursing care facility program gives a written
237     assurance, which is postmarked or has proof of delivery 30 days before the transfer, to the
238     director and to the transferee in accordance with Subsection 26-18-503(4);
239          (iii) [30 days prior to the transfer,] the nursing care facility program that will transfer
240     the license for a Medicaid bed notifies the division in writing, which is postmarked or has
241     proof of delivery 30 days before the transfer, of:
242          (A) the number of bed licenses that will be transferred;
243          (B) the date of the transfer; and
244          (C) the identity and location of the entity receiving the transferred licenses; and
245          (iv) if the nursing care facility program for which the license will be transferred or
246     purchased is located in an urban county with a nursing care facility average annual occupancy
247     rate over the previous two years less than or equal to 75%, the nursing care facility program
248     transferring or selling the license demonstrates to the satisfaction of the director that the sale or
249     transfer:
250          (A) will not result in an excessive number of Medicaid certified beds within the county
251     or group of counties that would be impacted by the transfer or sale; and
252          (B) best meets the needs of Medicaid recipients.
253          (b) Except as provided in Subsection (2)(c), a nursing care facility program may
254     transfer or sell one or more of its licenses for Medicaid beds to:
255          (i) a nursing care facility program that has the same owner or successor in interest of
256     the same owner;
257          (ii) a nursing care facility program that has a different owner; or
258          [(iii) notwithstanding Section 26-18-502, an entity that intends to establish a nursing
259     care facility program; or]
260          [(iv) notwithstanding Section 26-18-502, ]
261          (iii) a related-party nonnursing-care-facility entity that wants to hold one or more of the
262     licenses for a [future] nursing care facility program not yet identified, as long as:
263          (A) the licenses are subsequently transferred or sold to a nursing care facility program
264     within three years; and
265          (B) the nursing care facility program notifies the director of the transfer or sale in
266     accordance with Subsection (2)(a)(iii).
267          (c) A nursing care facility program may not transfer or sell one or more of its licenses
268     for Medicaid beds to an entity under Subsection (2)(b)(i), (ii), or (iii)[, or (iv)] that is located in
269     a rural county unless the entity requests, and the director issues, Medicaid certification for the
270     beds under Subsection 26-18-503(5).
271          (3) [An] A nursing care facility program or entity under Subsection (2)(b)(i), (ii), or
272     (iii)[, or (iv)] that receives or purchases a license for a Medicaid bed under Subsection (2)(b):
273          (a) may receive a license for a Medicaid bed from more than one nursing care facility
274     program;
275          [(b) within 14 days of seeking Medicaid certification of beds in the nursing care facility
276     program, give the division notice of the total number of licenses]
277          (b) shall give the division notice, which is postmarked or has proof of delivery within
278     14 days of the nursing care facility program or entity seeking Medicaid certification of beds in
279     the nursing care facility program or entity, of the total number of licenses for Medicaid beds
280     that the entity received and who it received the licenses from;
281          (c) may only seek Medicaid certification for the number of licensed beds in the nursing
282     care facility program equal to the total number of licenses for Medicaid beds received by the
283     entity;
284          (d) [notwithstanding Section 26-18-502, ] does not have to demonstrate need or seek
285     approval for the Medicaid licensed bed under Subsection 26-18-503(5), except as provided in
286     Subsections (2)(a)(iv) and (2)(c) ;
287          (e) shall meet the standards for Medicaid certification other than those in Subsection
288     26-18-503(5), including personnel, services, contracts, and licensing of facilities under Chapter
289     21, Health Care Facility Licensing and Inspection Act; and
290          (f) shall obtain Medicaid certification for the licensed Medicaid beds within three years
291     of the date of transfer as documented under Subsection (2)(a)(iii)(B).
292          (4) (a) When the division receives notice of a transfer of a license for a Medicaid bed
293     under Subsection (2)(a)(iii)(A), the department shall reduce the number of licenses for
294     Medicaid beds at the transferring nursing care facility:
295          (i) equal to the number of licenses transferred; and
296          (ii) effective on the date of the transfer as reported under Subsection (2)(a)(iii)(B).
297          (b) For purposes of Section 26-18-502, the division shall approve Medicaid
298     certification for the receiving nursing care facility program or entity:
299          (i) in accordance with the formula established in Subsection (3)(c); and
300          (ii) if:
301          (A) the nursing care facility seeks Medicaid certification for the transferred licenses
302     within the time limit required by Subsection (3)(f); and
303          (B) the nursing care facility program meets other requirements for Medicaid
304     certification under Subsection (3)(e).
305          (c) A license for a Medicaid bed may not be approved for Medicaid certification
306     without meeting the requirements of Sections 26-18-502 and 26-18-503 if:
307          (i) the license for a Medicaid bed is transferred under this section but the receiving
308     entity does not obtain Medicaid certification for the licensed bed within the time required by
309     Subsection (3)(f); or
310          (ii) the license for a Medicaid bed is transferred under this section but the license is no
311     longer eligible for Medicaid certification [as a result of the conversion factor established in
312     Subsection (3)(c)].
313          Section 4. Section 26-21-23 is amended to read:
314          26-21-23. Licensing of a new nursing care facility -- Approval for a licensed bed
315     in an existing nursing care facility -- Fine for excess Medicare inpatient revenue.
316          (1) Notwithstanding Section 26-21-2, as used in this section:
317          (a) "Medicaid" means the Medicaid program, as that term is defined in Section
318     26-18-2.
319          (b) "Medicaid certification" means the same as that term is defined in Section
320     26-18-501.
321          (c) "Nursing care facility" and "small health care facility":
322          (i) mean the following facilities licensed by the department under this chapter:
323          (A) a skilled nursing facility;
324          (B) an intermediate care facility; or
325          (C) a small health care facility with four to 16 beds functioning as a skilled nursing
326     facility; and
327          (ii) do not mean:
328          (A) an intermediate care facility for the intellectually disabled;
329          (B) a critical access hospital that meets the criteria of 42 U.S.C. 1395i-4(c)(2) (1998);
330          (C) a small health care facility that is hospital based; or
331          (D) a small health care facility other than a skilled nursing care facility with no more
332     than 16 beds.
333          (d) "Rural county" means the same as that term is defined in Section 26-18-501.
334          (2) Except as provided in Subsection (6) and Section 26-21-28, a new nursing care
335     facility shall be approved for a health facility license only if:
336          (a) under the provisions of Section 26-18-503 the facility's nursing care facility program
337     has received Medicaid certification or will receive Medicaid certification for each bed in the
338     facility;
339          (b) the facility's nursing care facility program has received or will receive approval for
340     Medicaid certification under Subsection 26-18-503(5), if the facility is located in a rural
341     county; or
342          (c) (i) the applicant submits to the department the information described in Subsection
343     (3); and
344          (ii) based on that information, and in accordance with Subsection (4), the department
345     determines that approval of the license best meets the needs of the current and future patients
346     of nursing care facilities within the area impacted by the new facility.
347          (3) A new nursing care facility seeking licensure under Subsection (2) shall submit to
348     the department the following information:
349          (a) proof of the following as reasonable evidence that bed capacity provided by nursing
350     care facilities within the county or group of counties that would be impacted by the facility is
351     insufficient:
352          (i) nursing care facility occupancy within the county or group of counties:
353          (A) has been at least 75% during each of the past two years for all existing facilities
354     combined; and
355          (B) is projected to be at least 75% for all nursing care facilities combined that have
356     been approved for licensure but are not yet operational;
357          (ii) there is no other nursing care facility within a 35-mile radius of the new nursing
358     care facility seeking licensure under Subsection (2); and
359          (b) a feasibility study that:
360          (i) shows the facility's annual Medicare inpatient revenue, including Medicare
361     Advantage revenue, will not exceed 49% of the facility's annual total revenue during each of
362     the first three years of operation;
363          (ii) shows the facility will be financially viable if the annual occupancy rate is at least
364     88%;
365          (iii) shows the facility will be able to achieve financial viability;
366          (iv) shows the facility will not:
367          (A) have an adverse impact on existing or proposed nursing care facilities within the
368     county or group of counties that would be impacted by the facility; or
369          (B) be within a three-mile radius of an existing nursing care facility or a new nursing
370     care facility that has been approved for licensure but is not yet operational;
371          (v) is based on reasonable and verifiable demographic and economic assumptions;
372          (vi) is based on data consistent with department or other publicly available data; and
373          (vii) is based on existing sources of revenue.
374          (4) When determining under Subsection (2)(c) whether approval of a license for a new
375     nursing care facility best meets the needs of the current and future patients of nursing care
376     facilities within the area impacted by the new facility, the department shall consider:
377          (a) whether the county or group of counties that would be impacted by the facility is
378     underserved by specialized or unique services that would be provided by the facility; and
379          (b) how additional bed capacity should be added to the long-term care delivery system
380     to best meet the needs of current and future nursing care facility patients within the impacted
381     area.
382          (5) The [division] department may approve the addition of a licensed bed in an existing
383     nursing care facility only if:
384          (a) each time the facility seeks approval for the addition of a licensed bed, the facility
385     satisfies each requirement for licensure of a new nursing care facility in Subsections (2)(c), (3),
386     and (4); or
387          (b) the bed has been approved for Medicaid certification under Section 26-18-503 or
388     26-18-505.
389          (6) Subsection (2) does not apply to a nursing care facility that:
390          (a) has, by the effective date of this act, submitted to the department schematic
391     drawings, and paid applicable fees, for a particular site or a site within a three-mile radius of
392     that site;
393          (b) before July 1, 2016:
394          (i) filed an application with the department for licensure under this section and paid all
395     related fees due to the department; and
396          (ii) submitted to the department architectural plans and specifications, as defined by the
397     department by administrative rule, for the facility;
398          (c) applies for a license within three years of closing for renovation;
399          (d) replaces a nursing care facility that:
400          (i) closed within the past three years; or
401          (ii) is located within five miles of the facility;
402          (e) is undergoing a change of ownership, even if a government entity designates the
403     facility as a new nursing care facility; or
404          (f) is a state-owned veterans home, regardless of who operates the home.
405          (7) (a) For each year the annual Medicare inpatient revenue, including Medicare
406     Advantage revenue, of a nursing care facility approved for a health facility license under
407     Subsection (2)(c) exceeds 49% of the facility's total revenue for the year, the facility shall be
408     subject to a fine of $50,000, payable to the department.
409          (b) A nursing care facility approved for a health facility license under Subsection (2)(c)
410     shall submit to the department the information necessary for the department to annually
411     determine whether the facility is subject to the fine in Subsection (7)(a).
412          (c) The department:
413          (i) shall make rules, in accordance with Title 63G, Chapter 3, Utah Administrative
414     Rulemaking Act, specifying the information a nursing care facility shall submit to the
415     department under Subsection (7)(b);
416          (ii) shall annually determine whether a facility is subject to the fine in Subsection
417     (7)(a);
418          (iii) may take one or more of the actions in Section 26-21-11 or 26-23-6 against a
419     facility for nonpayment of a fine due under Subsection (7)(a); and
420          (iv) shall deposit fines paid to the department under Subsection (7)(a) into the Nursing
421     Care Facilities [Account] Provider Assessment Fund, created by Section 26-35a-106.
422          Section 5. Section 26-35a-104 is amended to read:
423          26-35a-104. Collection, remittance, and payment of nursing care facilities
424     assessment.
425          (1) (a) Beginning July 1, 2004, an assessment is imposed upon each nursing care
426     facility in the amount designated in Subsection (1)(c).
427          (b) (i) The department shall establish by rule, a uniform rate per non-Medicare patient
428     day that may not exceed 6% of the total gross revenue for services provided to patients of all
429     nursing care facilities licensed in this state.
430          (ii) For purposes of Subsection (1)(b)(i), total revenue does not include charitable
431     contribution received by a nursing care facility.
432          (c) The department shall calculate the assessment imposed under Subsection (1)(a) by
433     multiplying the total number of patient days of care provided to non-Medicare patients by the
434     nursing care facility, as provided to the department pursuant to Subsection (3)(a), by the
435     uniform rate established by the department pursuant to Subsection (1)(b).
436          (2) (a) The assessment imposed by this chapter is due and payable on a monthly basis
437     on or before the last day of the month next succeeding each monthly period.
438          (b) The collecting agent for this assessment shall be the department which is vested
439     with the administration and enforcement of this chapter, including the right to audit records of
440     a nursing care facility related to patient days of care for the facility.
441          (c) The department shall forward proceeds from the assessment imposed by this
442     chapter to the state treasurer for deposit in the [restricted account] expendable special revenue
443     fund as specified in Section 26-35a-106.
444          (3) Each nursing care facility shall, on or before the end of the month next succeeding
445     each calendar monthly period, file with the department:
446          (a) a report which includes:
447          (i) the total number of patient days of care the facility provided to non-Medicare
448     patients during the preceding month;
449          (ii) the total gross revenue the facility earned as compensation for services provided to
450     patients during the preceding month; and
451          (iii) any other information required by the department; and
452          (b) a return for the monthly period, and shall remit with the return the assessment
453     required by this chapter to be paid for the period covered by the return.
454          (4) Each return shall contain information and be in the form the department prescribes
455     by rule.
456          (5) The assessment as computed in the return is an allowable cost for Medicaid
457     reimbursement purposes.
458          (6) The department may by rule, extend the time for making returns and paying the
459     assessment.
460          (7) Each nursing care facility that fails to pay any assessment required to be paid to the
461     state, within the time required by this chapter, or that fails to file a return as required by this
462     chapter, shall pay, in addition to the assessment, penalties and interest as provided in Section
463     26-35a-105.
464          Section 6. Section 26-35a-106 is amended to read:
465          26-35a-106. Nursing Care Facilities Provider Assessment Expendable Revenue
466     Fund -- Creation -- Deposits -- Uses.
467          (1) [(a)] There is created [a restricted account in the General Fund] an expendable
468     special revenue fund known as the "Nursing Care Facilities [Account] Provider Assessment
469     Fund" consisting of:
470          [(i) proceeds from the assessment imposed by Section 26-35a-104 which shall be
471     deposited in the restricted account to be used for the purpose described in Subsection (1)(b);]
472          (a) the assessments collected by the department under this chapter;
473          [(ii)] (b) fines paid by nursing care facilities for excessive Medicare inpatient revenue
474     under Section [26-18-506] 26-21-23;
475          [(iii)] (c) money appropriated or otherwise made available by the Legislature; [and]
476          [(iv)] (d) any interest earned on the [account.] fund; and
477          (e) penalties levied with the administration of this chapter.
478          [(b) (i)] (2) Money in the [account] fund shall only be used by the Medicaid program:
479          [(A)] (a) to the extent authorized by federal law, to obtain federal financial
480     participation in the Medicaid program;
481          [(B)] (b) to provide the increased level of hospice reimbursement resulting from the
482     nursing care facilities assessment imposed under Section 26-35a-104;
483          [(C)] (c) for the Medicaid program to make quality incentive payments to nursing care
484     facilities , subject to approval of a Medicaid state plan amendment to do so by the Centers for
485     Medicare and Medicaid Services within the United States Department of Health and Human
486     Services ; [and]
487          [(D) in the manner described in Subsection (1)(b)(ii).]
488          [(ii) The money appropriated from the restricted account to the department:]
489          [(A)] (d) [shall be used only] to increase the rates paid [prior to] before July 1, 2004, to
490     nursing care facilities for providing services pursuant to the Medicaid program [and for
491     administrative expenses as described in Subsection (1)(b)(ii)(C)]; and
492          [(B) may not be used to replace existing state expenditures paid to nursing care
493     facilities for providing services pursuant to the Medicaid program, except for increased costs
494     due to hospice reimbursement under Subsection (1)(b)(i)(B); and]
495          [(C)] (e) [may be used] for administrative expenses, if the administrative expenses for
496     the fiscal year do not exceed 3% of the money deposited into the [restricted account] fund
497     during the fiscal year.
498          (3) The department may not spend the money in the fund to replace existing state
499     expenditures paid to nursing care facilities for providing services under the Medicaid program,
500     except for increased costs due to hospice reimbursement under Subsection (2)(b).
501          [(2) Money shall be appropriated from the restricted account to the department for the
502     purposes described in Subsection (1)(b) in accordance with Title 63J, Chapter 1, Budgetary
503     Procedures Act.]
504          Section 7. Section 26-35a-107 is amended to read:
505          26-35a-107. Adjustment to nursing care facility Medicaid reimbursement rates.
506          If federal law or regulation prohibits the money in the Nursing Care Facilities
507     [Account] Provider Assessment Fund from being used in the manner set forth in Subsection
508     26-35a-106(1)(b), the rates paid to nursing care facilities for providing services pursuant to the
509     Medicaid program shall be changed [as follows]:
510          (1) except as otherwise provided in Subsection (2), to the rates paid to nursing care
511     facilities on June 30, 2004; or
512          (2) if the Legislature or the department has on or after July 1, 2004, changed the rates
513     paid to facilities through a manner other than the use of expenditures from the Nursing Care
514     Facilities [Account] Provider Assessment Fund, to the rates provided for by the Legislature or
515     the department.
516          Section 8. Section 63I-1-226 is amended to read:
517          63I-1-226. Repeal dates, Title 26.
518          (1) Title 26, Chapter 9f, Utah Digital Health Service Commission Act, is repealed July
519     1, 2025.
520          (2) Section 26-10-11 is repealed July 1, 2020.
521          [(3) Section 26-21-23, Licensing of non-Medicaid nursing care facility beds, is
522     repealed July 1, 2018.]
523          [(4)] (3) Title 26, Chapter 33a, Utah Health Data Authority Act, is repealed July 1,
524     2024.
525          [(5)] (4) Title 26, Chapter 36a, Hospital Provider Assessment Act, is repealed July 1,
526     2019.
527          [(6)] (5) Title 26, Chapter 36b, Inpatient Hospital Assessment Act, is repealed July 1,
528     2021.
529          [(7)] (6) Section 26-38-2.5 is repealed July 1, 2017.
530          [(8)] (7) Section 26-38-2.6 is repealed July 1, 2017.
531          [(9)] (8) Title 26, Chapter 52, Autism Treatment Account, is repealed July 1, 2016.
532          [(10)] (9) Title 26, Chapter 56, Hemp Extract Registration Act, is repealed July 1,
533     2021.
534          Section 9. Transfer of funds into Expendable Special Revenue Account.
535          The Department of Finance shall transfer the remaining fund balance in the "Nursing
536     Care Facilities Account" at fiscal year-end 2017 into the "Nursing Care Facilities Provider
537     Assessment Fund."
538          Section 10. Effective date.
539          This bill takes effect on July 1, 2017.