STATEMENTS OF POLICY
Title 55--PUBLIC WELFARE
DEPARTMENT OF PUBLIC WELFARE
[55 PA. CODE CH. 1101]
Medical Assistance Manual; General Provisions
[26 Pa.B. 5996] This statement of policy clarifies instances in which the Department of Public Welfare (Department) will refuse to enter into or terminate a provider agreement with providers of intermediate care for the mentally retarded (ICF/MR), nursing facility services, inpatient psychiatric or inpatient rehabilitation services.
Discussion
The Department is the single State agency designated to administer the Commonwealth's Medicaid Program, which is known in this Commonwealth as the Medical Assistance (MA) Program. The MA Program is a cooperative Federal-State program through which various health care services are provided to poor and needy individuals in this Commonwealth. As the single State agency, the Department is required by Federal law to adopt methods and standards that may be necessary to safeguard against the unnecessary utilization of care and services under the MA Program and to assure that MA payments are consistent with efficiency, economy and quality of care, 42 U.S.C.A. § 1396a(a)(30)(A).
On December 18, 1996, 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) sunsets. The purpose of the CON process was to assure the quality of and access to health care services for Pennsylvanians while controlling health care costs by limiting the supply of certain clinically related health services. ICF/MR, nursing facility services, inpatient psychiatric services and inpatient rehabilitation services were included in the clinically related health care services subject to CON. Entities that desired to furnish these services were required to first obtain from the Department of Health a determination of need for the proposed service in the region of this Commonwealth in which it would be offered.
The CON requirement has been one of the mechanisms that the Department used to safeguard against unnecessary utilization of institutional services and to assure that its payments for these services are consistent with efficiency, economy and quality of care. To participate as a provider in the MA Program, an entity must be currently licensed and certified by the appropriate State agency. See 55 Pa. Code § 1101.42(a) (relating to prerequisites for participation). Prior to December 18, 1996, an entity could not obtain a license to operate in this Commonwealth as an ICF/MR, a nursing facility or a psychiatric or rehabilitation hospital or to expand its existing licensed capacity by ten beds or 10%, whichever is less, over a 2-year period, without first having secured a CON. Consequently, a prior determination of the need for the provider's services by the Commonwealth was a prerequisite to participation in the MA Program. The sunset of the CON mechanism removes an important safeguard against unnecessary utilization and creates the risk of increased and uncontrolled costs to the MA Program.
In the absence of the CON review process, the Department must otherwise continue to fulfill its obligation under Federal law to control unnecessary utilization and to assure that its payments are consistent with efficiency, economy and quality of care. Therefore, it is the Department's intent to adopt measures creating a need review process which entities will be required to follow in order to enroll as a provider of ICF/MR, nursing facility, inpatient psychiatric or inpatient rehabilitation services or to expand existing institutional services. These measures will, at a minimum, require a prior determination of need for the services.
Interpretation
Pending the adoption of measures creating a need review process, the Department has adopted the following interim policy. First, the Department will not enter into a provider agreement with an ICF/MR, nursing facility, inpatient psychiatric hospital or rehabilitation hospital that does not have a CON dated on or prior to December 18, 1996. See 55 Pa. Code § 1101.42(a). Second, the Department will terminate the provider agreement of any currently enrolled ICF/MR, nursing facility, inpatient psychiatric hospital or rehabilitation hospital that expands its existing licensed bed capacity by more than ten beds or 10%, whichever is less, over a 2-year period, without having obtained a CON or letter of nonreviewability dated on or prior to December 18, 1996, approving the expansion. See 55 Pa. Code § 1101.77(b)(1) (relating to enforcement actions by the Department). The Department will consider exceptions to this policy on a case-by-case basis.
Contact Person
Comments and questions regarding this statement of policy should be directed to Regulations Coordinator, Office of Medical Assistance, Room 515 Health and Welfare Building, Harrisburg, PA 17120, (717) 787-1870.
Effective Date
This statement of policy shall take effect on December 19, 1996.
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-BUL-048. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 55. PUBLIC WELFARE
PART III. MEDICAL ASSISTANCE MANUAL
CHAPTER 1101. GENERAL PROVISIONS
PARTICIPATION § 1101.42b. Certificate of Need requirement for participation--statement of policy.
(a) Effective December 19, 1996, the Department will not enter into a provider agreement with an ICF/MR, a nursing facility, an inpatient psychiatric hospital or a rehabilitation hospital unless the Department of Health issued a Certificate of Need authorizing construction of the facility or hospital in accordance with 28 Pa. Code Chapter 401 (relating to Certificate of Need program) or a letter of nonreviewability indicating that the facility or hospital was not subject to review under 28 Pa. Code Chapter 401 dated on or before December 18, 1996.
(b) The Department will consider exceptions to subsection (a) on a case-by-case basis.
FEES AND PAYMENTS § 1101.77a. Termination for convenience and best interests of the Department--statement of policy.
(a) Effective December 19, 1996, under § 1101.77(b)(1) (relating to enforcement actions by the Department), the Department will terminate the enrollment and direct and indirect participation of, and suspend payments to, an ICF/MR, nursing facility, inpatient psychiatric hospital or rehabilitation hospital provider that expands its existing licensed bed capacity by more than ten beds or 10%, whichever is less, over a 2-year period, unless the provider obtained a Certificate of Need or letter of nonreviewability from the Department of Health dated on or prior to December 18, 1996, approving the expansion.
(b) The Department will consider exceptions to subsection (a) on a case-by-case basis.
[Pa.B. Doc. No. 96-2098. Filed for public inspection December 13, 1996, 9:00 a.m.]
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