[32 Pa.B. 734]
[Continued from previous Web Page] § 1187.152(c).
Subsection (c) sets forth the conditions that must be met for the Department to issue a grant to a nursing facility. Among other things, this subsection specifies that the grant is not effective until the nursing facility certifies to the Department that it has read and understands the terms of the grant.
§ 1187.152(c)(1).
The Department has developed forms for use in applying for a grant. In addition, the Department will be developing and publishing guidelines for the preparation and submittal of grant requests. This paragraph requires that the nursing facility comply with all instructions in effect at the time the request is made.
§ 1187.152(c)(2).
The definition of ''DME--durable medical equipment'' specifies that DME is movable property that, among other things, ''is primarily and customarily used to serve a medical purpose'' and ''generally is not useful to an individual in the absence of illness or injury.'' Thus, DME is movable property that serves a medical purpose. Consistent with this purpose, the Department will not authorize exceptional payments for exceptional DME unless that DME is medically necessary.
In its original draft version of the amendments, the Department proposed to set forth a definition of ''medical necessity.'' However, after receiving comments during the public process suggesting that the Department use the definition already in § 1101.21, the Department revised its draft to incorporate that definition. The Department also received comments during the public process that, for purposes of the exceptional DME provisions, the Department should modify that definition in § 1101.21. The Department, however, finds that consistency is desirable and, consequently, has not revised the definition in this context.
In addition, during the public process, the Department received a comment suggesting that, in determining whether an item of DME is medically necessary, the Department should consider alternative, less-expensive items, and should consider the resident's independent ability to operate both the proposed and the alternative items. The Department does, and will continue to, consider these factors in determining whether an item of DME is medically necessary.
§ 1187.152(c)(3).
''Durable medical equipment'' and ''exceptional DME'' are defined in § 1187.2 and the Department's annual notice. Thus, an item of DME is ''exceptional DME'' if it meets the definitions and conditions set forth therein.
§ 1187.152(c)(4).
Paragraph (4) permits the Department to refuse a grant if the Department finds that the requesting nursing facility's physical plant, equipment, staff, program and policies are not sufficient to insure the safe, appropriate and effective use of the exceptional DME. As an example, if the circumstances of a nursing facility are such that a ventilator cannot be used in conformity with these requirements, the grant may be refused. In this case, the nursing facility should make alternative arrangements for the resident in question. Typically, those arrangements would involve the transfer of the resident to a different nursing facility that does have the requisite capacity.
§ 1187.152(c)(5).
As originally drafted, this provision required that the nursing facility execute a grant agreement as a condition of receiving a grant. For reasons specified, the Department has determined that grant agreements are no longer necessary, and has eliminated references to grant agreements from the amendments. The Department has included new language in this section that requires a nursing facility to certify to the Department that it has read and understands the terms of its grant as a condition of issuance of the grant.
§ 1187.153. Exceptional DME grants--process.
§ 1187.153(a).
Section 1187.152(c)(1) provides that the Department will issue a grant if, among other things, ''[t]he nursing facility's request for a grant complies with all applicable Department instructions.'' Section 1187.153(a)(1) sets forth the fundamental parameters of those instructions. Thus, all those requests must be ''in writing,'' ''on forms designated by the Department,'' ''completed in accordance with all applicable instructions,'' ''be accompanied by all necessary supporting documentation specified in the Department's instructions'' and ''submitted . . . no later than 30 days from the date on which the nursing facility purchases or rents the DME.''
The draft version of paragraph (2) has been revised to eliminate possibly ambiguous provisions. As revised, paragraph (2) requires that a notice be provided to a resident's ''authorized representative'' whenever that person has been designated. In addition, regardless whether an ''authorized representative'' has been designated or not, notice must also be provided to the resident. The purpose of this notice is two-fold. First, it informs the resident or authorized representative, or both, of the nursing facility's request. Second, it informs those persons that the nursing facility believes that the identified DME is medically necessary. The nursing facility must provide this notice to the resident at the same time the facility submits its request to the Department.
As used in this paragraph, the term ''authorized representative'' means a person who is not an employee of the nursing facility and is responsible for making decisions on behalf of the resident. The person shall be so designated by the resident or a court, and documentation shall be available on the resident's clinical record to this effect. An employee of the nursing facility will be permitted to be a responsible person only if appointed by the resident's legal guardian or by a court. If an incompetent resident has no authorized representative, the nursing facility should immediately make arrangements for a person to serve in that capacity.
§ 1187.153(b).
Subsection (b) describes the notice that the Department will give of its decision to approve or deny a request for a grant. The Department will send notices to the nursing facility that filed the request and to the resident and the resident's authorized representative.
During the public process, the Department received comments recommending that the regulations should require the Department to respond to a nursing facility's request for an exceptional DME grant within a specific time frame, or provide that a request for an exceptional DME grant would be deemed approved if the Department does not act on it within 21 days. While the Department has not revised the regulation as suggested, the Department will endeavor to respond to each request within 21 days. If, however, the Department does not act within that time frame, the request is not automatically approved. The Department notes that the exceptional payment policies give nursing facility providers the option to request and obtain additional payment under certain circumstances. The policies are not intended to, and do not, alter a nursing facility's obligation to provide care and services to its residents in accordance with all applicable State and Federal requirements. Among other things, a nursing facility must ensure that its residents receive necessary services and items as specified in their care plans, including DME, regardless of whether the facility has submitted a request for, or received an exceptional DME grant. The Department also notes that it has amended the regulations to allow nursing facilities to submit requests for exceptional DME grants within 30 days after purchasing or renting the DME.
§ 1187.154. Exceptional DME grants--general conditions and limitations.
§ 1187.154(a).
Subsection (a) states the scope and effect of an exceptional DME grant. A grant is not a payment. Rather, it is a conditional authorization given to a nursing facility to receive a limited and specified amount as an exceptional payment subject to certain specified terms. To receive such a payment, the nursing facility must comply with the Department's billing requirements in § 1101.68.
§ 1187.154(a)(2).
Paragraph (2) states that a grant does not ''limit costs that are, or must be, incurred by a nursing facility to provide services to any of its residents'' including the resident identified in a grant or an application for a grant. By electing to enroll in the MA Program as a provider of nursing facility services, the nursing facility has voluntarily assumed the responsibility to provide services ''in accordance with applicable law and regulations.'' Some of the applicable laws and regulations are identified in this preamble. However, nursing facilities are deemed to have notice of the laws and regulations and, therefore, must comply with all laws and regulations, whether identified herein or not.
§ 1187.153(c)(1).
An item of exceptional DME is, by definition, an item of movable property having an acquisition cost that meets or exceeds the minimum acquisition cost threshold. Because that threshold presently is $5,000, any item of exceptional DME is, by definition, classified as an item of major movable property. As originally promulgated, Chapter 1187 included all items in the FRV system used to compute the capital rate. Under the amendments, however, major movable property has been removed from the FRV system and, instead, the acquisition cost of major movable property is now an allowable cost. As set forth in § 1187.152(a), for purposes of determining the necessary, reasonable and prudent cost of an item of DME that is subject to a grant, that cost is limited to and deemed to be the amount specified in the grant. Paragraph (1) specifies how these costs shall be reported by the nursing facility.
During the public process, the Department was asked whether a nursing facility whose request for an exceptional DME grant is approved, but for an amount less than the cost incurred by the facility, may report the difference on its cost report. The Department has revised § 1187.154 to specify that the amount of the exceptional payments authorized by a grant is based upon the necessary, reasonable and prudent cost of the exceptional DME and the related services and items identified in the grant. In identifying its allowable costs on its cost report, therefore, the nursing facility must adjust those reported costs to the necessary, reasonable and prudent cost amounts identified in the nursing facility's grant. See § 1187.154(a) and (c).
Another comment questioned whether the Department will take the position that a nursing facility that reports costs on its cost report related to equipment for which an exceptional DME grant has been denied, has committed program fraud or abuse. The Department will evaluate each situation and determine on a case-by-case basis whether there is reason to believe that fraud or abuse has occurred based on the specific circumstances.
§ 1187.154(c)(2).
Section 1187.60(c) identifies types of income that reduce allowable costs. The Department has amended that subsection to provide that payments received by a nursing facility under an exceptional DME grant shall offset costs. Paragraph (2) specifies how those offsets are to be made by the nursing facilities on their cost reports. Because the acquisition cost of exceptional DME must be reported as a major movable property cost, that portion of an associated payment that pertains to the DME must be used as an offset to the nursing facility's major movable property costs. Likewise, a payment associated with ''related services and items'' must be used as an offset against costs in the cost center where the costs of those services and items were reported. If a nursing facility receives a payment under an exceptional DME grant that was approved after the period in which the acquisition costs were reported and that payment was unable to be accrued, the facility may not revise or amend the earlier costs but, instead, the payment shall offset costs in the more-recent period. Thus, for instance, if a nursing facility purchases a specially adapted wheelchair at the end of cost reporting period No. 1, it would report that cost on the cost report for that period. If, however, that period ends before the request for a grant is made, the payment made by the Department might not be received by the nursing facility until the cost report has already been submitted. In this situation, the nursing facility would not amend its cost report. Rather, it would report the payment as an offset to major movable property costs on the cost report for the subsequent cost reporting period.
§ 1187.154(d).
Federal and State laws require that a provider participating in the MA Program must accept as payment in full the amounts paid by the Department. This subsection explains the meaning of this requirement in the context of a payment made under an exceptional DME grant.
§ 1187.154(f).
As originally drafted, this subsection included the following additional text: ''If a nursing facility timely appeals an adverse Department determination relating to its grant, the Department's determination is not final until the Department issues a final adjudication on the nursing facility's appeal. The Department's adjudication of any such dispute shall be final, except as it may be reviewed by an appellate court pursuant to the Administrative Agency Law (2 Pa.C.S. § 101 et seq.). Any dispute which is not timely presented to the Bureau of Hearings and Appeals for adjudication shall be deemed waived and released and may not thereafter be the subject of any claim, proceeding or cause of action against the Commonwealth of Pennsylvania, the Department or its officials and employees.'' These sentences were redundant and unnecessary, as they merely repeated the content and effect of provisions in § 1187.141 (relating to nursing facility's right to appeal and to a hearing), which is made applicable to Subchapter K by § 1187.158(a)(4).
§ 1187.154(i).
Compliance with the conditions and limitations in subsection (i) is a condition of receiving a grant. A nursing facility is not required to request an exceptional DME grant. Therefore, if a nursing facility concludes that some or all of these conditions and limitations are unacceptable, the facility can avoid their effect by declining to request a grant and, in that instance, these provisions do not apply. However, if the nursing facility requests and receives a grant, these provisions are applicable. Under the revised amendments, costs associated with exceptional DME are (generally, and subject to various limitations) allowable costs. When the Department makes additional payments to a nursing facility pursuant to an exceptional DME grant, the amounts of those payments will be treated as an offset to the allowable costs in accordance with § 1187.154(c). Further, because it is a condition of participation that a nursing facility provider must accept case-mix per diem rate payments and any additional payment under a grant as payment in full, the facility will have been fully paid for the nursing facility services it provided to the MA resident named in the grant. Therefore, if a nursing facility were to purchase a wheelchair that met the definition of ''specially adapted DME,'' and the facility requested and received a grant, and if the resident was thereafter discharged into the community and the Department directed that title to the wheelchair be transferred to the resident, the facility would be required under this subsection to transfer title without receiving further compensation for the transferred item. In that case the offset provisions contained in § 1187.61(c)(1) (relating to movable property cost policies) would not apply.
§ 1187.155. Exceptional DME grants--payment conditions and limitations.
§ 1187.155(a).
An exceptional DME grant constitutes authorization given by the Department for a nursing facility to submit invoices to the Department for payment related to the provision of nursing facility services related to the use of exceptional DME. There are two types of grants. One type authorizes the nursing facility to bill for and receive a single lump sum payment. The other type authorizes multiple payments to be billed for and received on a periodic basis. These are referred to as ''monthly payments.'' In rare cases, however, the Department may vary the period, to account for differing payment schedules.
§ 1187.155 Draft subsection (b).
As originally drafted, costs of exceptional DME identified in a grant agreement would have been nonallowable costs and, to ensure that all costs associated with those items would be excluded, the Department proposed that the cost of maintenance, repairs and supplies not included in ''related services and items'' would also be encompassed by the grants. However, as explained in this Preamble, the Department has decided that exceptional DME costs will (subject to various limitations) be treated as allowable costs. Consequently, there no longer is a need to make special provision to include the cost of maintenance, repairs and supplies within the scope of the exceptional DME grant. Therefore, the Department has removed draft subsection (b) in its entirety. This change will simplify the administration of the exceptional DME grant process, as well as the recordkeeping duties of the nursing facilities.
Revised subsection (b) (former subsection (c)).
As originally proposed, this subsection specified that the maximum allowable exceptional payment authorized by a grant was limited to the lowest of four criteria: (1) the nursing facility's actual acquisition cost; (2) the applicable MA outpatient fee schedule amount, if any; (3) 80% of the amount that would be approved by Medicare if the DME were a Medicare Part B covered service or item; and (4) the maximum approved amount specified in the nursing facility's grant agreement. Because grant agreements will no longer be used, the latter criterion has been deleted and the amount specified in a grant will be determined by applying the first three criteria.
During the public process, the Department received a comment suggesting that the Department must ensure that the maximum allowable payment authorized by the subsection is sufficient to meet the resident's need. The Department believes that the comment misapprehends the nature of the payment system. The exceptional payment authorized under a grant is in addition to the payment that the nursing facility receives to provide care and services to its MA residents. It is the rate as a whole, and not any component or the additional payment authorized by a grant that should be considered in determining the adequacy of reimbursement. Moreover, by electing to participate in the MA Program, a nursing facility assumes the responsibility to provide appropriate nursing facility services to its MA residents. Included in this is the responsibility to make all medically necessary DME available to its residents. Further, by enrolling in the MA Program, the facility agrees to accept payment made at the case-mix per diem rate as payment in full for covered services and items, including DME. If a nursing facility receives an exceptional payment, that payment is made to the facility (not the resident), as additional payment for services provided to that resident. However, the nursing facility's obligation to provide the services exists regardless whether the facility requests or receives an exceptional DME grant.
Subsection (c) (former subsection (d)).
§ 1187.155(c)(1).
Exceptional payments made under a grant will be subject to the conditions and limitations in Chapter 1101, including § 1101.64 (relating to third-party medical resources). The purpose of exceptional DME grants is to provide nursing facilities with additional payments in situations when they provide nursing facility services to certain residents who require certain unusual and expensive DME. In situations when a third-party payer has already paid for that DME, no grant is necessary. As explained in this Preamble, the issuance of a grant constitutes authorization from the Department to the nursing facility to submit invoices for payments pertaining to nursing facility services involving the use of exceptional DME. The submittal of these invoices is governed by § 1101.68.
Because exceptional DME grants are only issued infrequently and in extraordinary circumstances, the Department has determined that each grant should be treated individually, and that the terms and conditions should vary in accordance with the particular needs and circumstances of the MA eligible resident, the capabilities of the nursing facility, and the changing technology of DME. Consequently, the Department has determined that the use of individual written grants is appropriate. Each grant will specify: (i) the resident who needs the exceptional DME; (ii) the exceptional DME and related services and items needed by the resident; (iii) whether the nursing facility is authorized to request a lump-sum payment or periodic payment under the grant; (iv) the amount of additional payments and, if periodic payments are authorized, payment intervals at which the additional payment amounts may be requested; and (v) the effective date of the grant. Section 1187.154(c)(2) ensures that the imposition of those terms is specifically contemplated by the Department's regulations.
§ 1187.156. Exceptional DME notification and reporting requirements.
Section 1187.156 sets forth previously proposed provisions pertaining to the various notices and status reports be given to the Department. Until the Department provides different guidance, all reports and notices shall be sent to the Bureau of Long Term Care Programs, attention Division of LTC Provider Services, P. O. Box 8025, Attn: Exceptional Payment Section, Harrisburg, PA 17105.
§ 1187.157. Termination or suspension of exceptional DME grants and recovery of exceptional payments.
§ 1187.157(a).
Section 1187.157 was originally proposed as § 1187.156. As originally drafted, this section spoke of the ''revocation'' of an exceptional DME grant. That term suggested that a grant would only come to an end as a result of some affirmative act by the Department. That suggestion was incorrect. Generally, a grant ends as a result of some extrinsic event or condition. Therefore, the Department has modified the section to speak of ''termination.''
As set forth in subparagraph (5)(i), when a grant is terminated, the nursing facility no longer has authorization to obtain payments for services provided ''after the termination date.'' Thus, for example, if a grant is terminated because the nursing facility is advised by the resident's attending physician that the exceptional DME is no longer medically necessary (§ 1187.157(a)(1)(iv)), the termination date is the date specified by the physician and, while the facility can receive exceptional payments for services provided up through that date, it no longer has authorization to receive payments for services provided thereafter. This limitation is in keeping with the principle that exceptional DME grant payments are intended as payment for nursing facility services.
In addition, the Department has modified this subsection to allow for the suspension of payments under a grant. In all or most instances, these new provisions will only apply when the grant in question authorizes periodic or monthly payments. The Department has included these provisions as an intermediate measure, to be used when termination appears unnecessary but when an interruption of payments also seems appropriate.
During the public process, the Department received a comment suggesting that it was not clear whether, in situations when the Department discontinues payment because the need for the exceptional DME no longer exists, the Department would issue advance notices. The Department agrees that advance notice should be given in some instances and has accordingly revised § 1187.157(a) (2).
§ 1187.157(b).
Subsection (b) makes explicit the Department's right to recover payments made for services provided during a period of suspension or after the termination date of a grant. In addition, it provides that, if a nursing facility that has received payments pursuant to an exceptional DME grant has violated Subchapter K or the terms of its grant (such as, by submitting a request for payment in excess of the amount authorized, or for costs incurred for services and items not identified in the grant), the Department can recover some or all of the exceptional payments made under that grant in addition to or instead of terminating the nursing facility's grant. Under the latter option, the nursing facility would still be bound by the terms of this subchapter and its grant, even though the payments have been recovered.
§ 1187.157(c).
Subsection (c) makes clear that the rights and remedies available to the Department under § 1187.156 do not supersede or replace any rights, remedies or sanctions that are otherwise available to the Department under other laws and regulations.
During the public process, the Department was asked whether the exceptional DME grant process would have to be started over again if the Department revokes a grant due to a resident being temporarily discharged or transferred to a hospital or other health care provider. Another comment noted that some chronic conditions require repeated admissions to a hospital and that it was not prudent to subject residents and nursing facilities to repeated applications for exceptional DME for this reason. The Department agrees that, on occasion, suspension of a grant may be preferable to termination of the grant. Consequently, it has revised the regulations to permit suspensions in certain circumstances.
§ 1187.158. Appeals.
Section 1187.158 is new. The section sets forth provisions originally addressed in draft § 1187.152(d) and (e).
§ 1187.158(a).
With one exception, the changes in Subchapter K involve changes in the manner that nursing facilities are reimbursed for nursing facility services provided to certain MA residents. Thus, with one exception, the nursing facility is the only party who can be aggrieved by the denial of a request for a DME grant, or by the termination or suspension of a grant. Consequently, in the original version of Subchapter K, the Department proposed that, with one exception, only the nursing facility would have the right to appeal the decision of the Department made under this subchapter.
The one exception involves determinations of medical necessity. As discussed in this Preamble, regardless of whether a particular item of DME qualifies as ''exceptional DME,'' if the circumstances of a resident cause that item to be medically necessary, the nursing facility has a positive duty under State and Federal law to use that DME in providing the resident with nursing facility services. However, if an item of DME is not medically necessary, the nursing facility is not required to use it, although it may elect to do so. Moreover, if the DME is not medically necessary and is not part of the routine items and services provided by the nursing facility, but the resident nonetheless wants it, the facility is entitled to charge the resident for that item.
As set forth in § 1187.152(c)(2), one criterion that must be met for a grant request to be approved is that the associated DME is ''medically necessary.'' When a nursing facility submits a request for an exceptional DME grant it must, among other things, provide documentation and representation in support of the proposition that the identified DME is medically necessary. In considering the request, the Department reviews this information. If the Department concludes that the DME is not medically necessary, this is a ground for denying the request. Id. Thus, in the event that a request is denied for lack of medical necessity, not only has the Department determined that no exceptional payment will be made to the nursing facility but, in addition, the Department has determined that the facility has no legal obligation to use that DME in providing services to the resident. Only in this way does a Departmental decision adversely affect the resident. As originally drafted, the resident would only have been allowed to appeal a Departmental decision if it were based, in whole or in part, upon a finding of no medical necessity. Consistent with this position, when a request was denied for lack of medical necessity, the Department originally proposed that nursing facilities would not be able to appeal that determination.
Commentators, and in particular those representing consumers' interests, were critical of the manner in which the Department described the limited appeal rights of the residents. In part, this criticism seems to reflect the idea that, by issuing a grant, the Department is purchasing the DME for the resident. That conception is mistaken. When the Department approves a grant, it gives its authorization for the nursing facility to bill for and receive an additional payment for nursing facility services. Nonetheless, the Department does recognize that residents or their authorized representatives, or both, may find this rule and the contemplated limitation on appeals to be confusing. In addition, the Department recognizes that, on a regular basis, nursing facilities commence appeals in the names of their residents. To simplify the process, the Department has revised the regulations so that residents (acting directly or through their authorized representatives) and nursing facilities can appeal all types of decisions relating to exceptional DME grants.
The Department's original position was based upon its determination that, except in situations involving medical necessity, residents lacked standing because they were not aggrieved. Although the Department has modified its regulations to permit residents to maintain appeals in other instances, this change is not based upon a change in the Department's conclusion that the residents are not aggrieved.
§ 1187.158(b)
As originally drafted, subsection (b)(1) was located in § 1187.153 and provided as follows: ''If, within the time limits set by subsection (d), the resident or the nursing facility fails to timely appeal the Department's decision to deny a grant as provided in subsection (d), the Department's decision is final. Any dispute regarding or arising from the Department's decision which is not timely presented by the resident or the nursing facility to the Department for adjudication shall be deemed waived and released and may not thereafter be the subject of any appeal, claim, proceeding or cause of action against the Commonwealth, the Department or its officials and employees. If the resident or the nursing facility timely appeals the Department's decision to deny a grant, the Department's denial is not final until the Department issues a final adjudication on the appeal. The Department's adjudication of an appeal shall be final, except as it may be reviewed by an appellate court pursuant to the Administrative Agency Law (2 Pa.C.S. § 101 et seq.).'' That provision was deleted as redundant. In § 1187.158(a)(5), all appeals must be filed with the Bureau of Hearings and Appeals (BHA) within 30 days of the date of the Department's written notice and, as set forth in § 1187.158(a)(3), if a nursing facility appeals the denial, termination or suspension of a grant, § 1187.141(b), (d) and (e) apply. Those provisions already establish that, if a nursing facility fails to timely appeal an adverse decision of the Department, the Department's decision is final, and that any dispute regarding or arising out of that decision that has not been timely presented to BHA is deemed waived and released and may not thereafter be the subject of any appeal, action or proceeding. Those provisions further establish that, if a timely appeal is filed, the Department's denial is not final until the Department issues a final adjudication of that appeal. The final decisions are, of course, reviewable by an appellate court under the Administrative Agency Law.
Section 1187.158(b)(2)(i) and (ii) indicates some of the implications when the Department denies a grant request. Subparagraphs (iii) and (iv) indicate some of the effects of a termination or suspension of a grant. In all cases, these provisions are intended to ensure that nursing facilities and residents have clear notice of the conduct required and expected by the Department in these circumstances.
During the public process, the Department received a comment objecting to the requirement that, as a condition of receiving an exceptional DME grant, a nursing facility bring disputes relating to the grant initially and exclusively to the BHA. The commentator suggested that this provision eliminates providers' right to appeal to the Board of Claims. The Department does not agree that the regulation eliminates any provider rights. A payment made to a nursing facility for nursing facility services to MA recipients--regardless whether the payment is made pursuant to per diem rates or an exceptional DME grant--is ''assistance'' for purposes of section 402 of the act (62 P. S. § 402), and, as such, is a ''grant.'' See 62 Pa.C.S. § 102(f) (relating to application of part) and 25 Pa.B. 4477, (October 14, 1995). The Board of Claims does not have jurisdiction over disputes involving grants, nor does it have jurisdiction over disputes involving MA provider agreements. See 62 Pa.C.S. § 106(f) and (e) (relating to public access to procurement information). Further, an MA provider's relationship with the Department is not contractual in nature. Rather, the obligations and duties of both the provider and the Department are derived from and governed by law and regulation, not any contract. The exceptional payment policies in Annex A do not create a contractual relationship or contractual rights or impose contractual obligations. The policies allow a nursing facility the option to request additional payments for services provided to MA residents when those services require the use of exceptional DME, and authorize the Department to issue a grant to the nursing facility when certain regulatory conditions are met. The policies also set forth the applicable terms and conditions for the grants. In addition, the Department notes that the regulatory language to which the commentator objects is a continuation of longstanding policy and practice. The provision is based upon analogous terms that have been included in all of the Department's exceptional payment grant agreements with nursing facilities since 1988.
The Department received a comment suggesting that appeals brought before the BHA should be expedited and decisions rendered within 30 days of filing. Except in situations when the Department determines that an item of DME is not medically necessary, the Department notes that the dispute underlying an appeal from the denial or termination of an exceptional DME grant is whether the Department's payments will be limited to those made under the per diem rates or, in addition, will include payments made under a grant. The dispute involves a question of reimbursement, which does not affect the nursing facility's obligation to provide necessary care to the resident. Nonetheless, if a nursing facility or resident desire an expedited hearing, they may ask BHA to expedite their appeals. BHA considers these requests on a case-by-case basis. The Department also notes that, regardless of whether an appeal is filed, nursing facilities are responsible to provide necessary care and services to residents.
The Department received a comment suggesting that the draft appeal provisions appeared to produce decisions that would be forever binding, regardless of a possible change in medical condition. The Department believes that the commentator's concern relates to language that appeared in the prior drafts of the regulation, which stated: ''If, within the time limits set by subsection (d), the resident or the nursing facility fails to timely appeal the Department's decision to deny a grant as provided in subsection (d), the Department's decision is final. Any dispute regarding or arising from the Department's decision which is not timely presented by the resident or the nursing facility to the Department for adjudication shall be deemed waived and released and may not thereafter be the subject of any appeal, claim, proceeding or cause of action against the Commonwealth, the Department or its officials and employees. If the resident or the nursing facility timely appeals the Department's decision to deny a grant, the Department's denial is not final until the Department issues a final adjudication on the appeal. The Department's adjudication of any such appeal shall be final, except as it may be reviewed by an appellate court under the Administrative Agency Law.'' The Department has deleted this language from the amendments because the Department has determined that it merely restates what the existing law, including § 1187.141(b), (d) and (e), already provide. The Department has, however, included a new paragraph, § 1187.158(b)(1), to make clear that the denial or termination of a grant does not prohibit a nursing facility from submitting a new request for an exceptional DME grant for the same resident who was the subject of a prior denied request or terminated grant if the facility reasonably believes that there has been a change in the resident's condition since the denial or termination.
The Department received a comment noting that, if the Department denies an exceptional DME grant on the grounds that the identified DME is not medically necessary, the draft amendments would permit the nursing facility to provide DME and charge the resident. So long as the resident requests that the DME be provided, and so long as the nursing facility complies with applicable State and Federal requirements, the nursing facility may do so. The commentator's concern was that, in that situation, the resident's entire personal needs account could be depleted to cover the expense of costly DME. The commentator recommended that if exceptional DME is in use during an appeal process, the nursing facility should assume the cost until an appropriate alternative can be secured. The Department notes that, if as a result of the appeal, the DME is found to be medically necessary, then regardless whether it is exceptional or not, the nursing facility is required to provide it and refund any amount paid by the resident. If, on the other hand, the DME is found to be not medically necessary, the nursing facility is entitled to retain the money, since the resident requested that the DME be provided.
The Department received a comment recommending that, instead of requiring a nursing facility to issue a refund to the resident ''immediately'' in the event an appeal is sustained, the regulation should be revised to permit the nursing facility 60 days from the date the appeal is sustained to issue the refund. The commentator suggested that a revision would be consistent with the regulation governing refunds of resident personal funds. The Department accepts the recommendation and has revised the regulation to allow nursing facilities 60 days to refund payments made by residents.
Fiscal Impact
A. Public Sector
1. Commonwealth
Currently, the Department pays MA nursing facility providers on a per diem rate basis for services provided to MA residents. These nursing facility per diem rates include a capital component that provides a fair rental payment for use of the facilities' allowable movable property. In addition to the per diem payment rates, the Department also makes exceptional payments to nursing facilities in certain limited circumstances. Prior to November 1, 1999, exceptional payments were limited to the rental of equipment and supplies necessary to care for the high technology-dependent residents, such as ventilator dependent or head or spinal cord, or both, injured individuals.
The amendments revise the Department's case-mix regulations to incorporate and expand existing exceptional payment policies to permit the Department to make additional payments to nursing facilities for nursing facility services provided to certain MA residents who require medically necessary exceptional DME. As a result of these amendments, exceptional payments will no longer be limited to the rental of equipment and supplies, but will be based upon the costs to purchase and rent exceptional DME and certain services and items necessary to the effective use of those exceptional items, including staff and resident training.
These amendments also revise the Department's case-mix regulations to change the payment methodology as it relates to the costs of movable property that is used by nursing facilities to provide services to their residents by: (i) removing movable property from the FRV calculation; (ii) recognizing minor movable property costs as net operating costs; (iii) using actual audited major movable property acquisition costs to compute the capital component of nursing facilities' case-mix per diem rates; and, (iv) eliminating the application of the moratorium in determining allowable movable property costs.
The amendments will increase Departmental expenditures by $26.633 million ($12.147 million in State funds) for Fiscal Year 2001-2002.
2. Political Subdivisions
There will be a fiscal impact on individual political subdivisions to the extent that county nursing facilities receive additional exceptional payments and increased case-mix per diem rates as a result of the amendments in Annex A.
B. Private Sector
1. General Public
Although the amendments provide for enhanced payments to nursing facilities for certain medically necessary exceptional DME and otherwise revise the case-mix payment methodology in a way that is likely to result in an increase in payment rates for the majority of MA nursing facility providers, there will be no fiscal impact on the general public as a result of the amendments in Annex A. The additional and increased payment rates authorized by these amendments will help to better ensure that MA nursing facility providers provide services in conformity with law and that MA residents of those providers receive necessary care and services in conformity with their care plans.
2. Private Nursing Facilities
There will be a fiscal impact on individual private nursing facilities to the extent that those facilities receive additional exceptional payments and increased case-mix per diem rates as a result of the amendments.
Paperwork Requirements
These amendments have increased the paperwork requirements for the Commonwealth and for those nursing facilities requesting exceptional payment for DME in accordance with conditions in these amendments. The nursing facilities are required to submit a request for exceptional payment, which includes documentation to support their request, and obtain the Department's written response to that request. In addition, nursing facilities are required to maintain a separate written log identifying requests for exceptional DME and provide notification to the Department if an MA eligible resident refuses medically necessary DME.
Effective Date
The following amendments are effective November 1, 1999: Subchapter K, the definitions of ''DME--durable medical equipment,'' ''related services and items'' and ''specially adapted DME'' as contained in § 1187.2 and § 1187.59(c)(5). The remaining amendments take effect July 1, 2001, and, except to the limited extent specified in § 1187.91(iv)(D), apply to cost reports for fiscal periods starting on or after January 1, 2001.
Sunset Date
There is no sunset date for these final-omitted regulations.
Public Comment Period
Although these final-omitted regulations are being adopted without being published as proposed, interested persons are invited to submit their written comments within 30 days from the date of this publication for consideration by the Department as to whether the regulations should be revised. The comments should be sent to the Department of Public Welfare, Office of Medical Assistance Programs, Attn: Regulations Coordinator, Room 515 Health and Welfare Building, Harrisburg, PA 17105.
Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (Voice users). Person who require another alternative, please contact the Office of Legal Counsel at (717) 782-2209.
Regulatory Review
Under section 5.1(c) of the Regulatory Review Act (71 P. S. § 745.5a(c)), on December 12, 2001, the Department submitted a copy of these final-omitted regulations to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Health and Welfare and the Senate Committee on Public Health and Welfare. On the same date, the regulations were submitted to the Office of the Attorney General for review and approval under the Commonwealth Attorneys Act (71 P. S. §§ 732-101--732-506).
Under section 5.1(d) of the Regulatory Review Act, these regulations were deemed approved by the Committees on December 2, 2002. Under section 5.1(e) of the Regulatory Review Act, on January 1, 2002, IRRC met and approved by IRRC.
Findings
The Department finds that:
(1) Notice of proposed rulemaking is contrary to public interest under section 204(3) of the CDL and the regulations thereunder, 1 Pa. Code § 7.4(3).
(2) Notice of proposed rulemaking is omitted because these amendments relate to a Commonwealth grant or benefit in accordance with section 204(1)(iv) of the CDL and 1 Pa. Code § 7.4(1)(iv).
(3) The adoption of the amendments in the manner provided in this order is necessary and appropriate for the administration and enforcement of section 443.1(2) and (3) of the act.
Order
The Department, acting under the authority of the act, orders that:
(a) The regulations of the Department, 55 Pa. Code Chapter 1187, are amended by amending §§ 1187.2, 1187.22, 1187.51, 1187.56--1187.60, 1187.71, 1187.80, 1187.91, 1187.96, 1187.97, 1187.112 and 1187.113; and by adding §§ 1187.61 and 1187.151--1187.158 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Secretary of the Department shall submit this order and Annex A to the Attorney General and General Counsel for approval as to the legality and form as required by law.
(c) The Secretary of the Department shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication and apply retroactively November 1, 1999; for Subchapter K, the definitions of ''DME--durable medical equipment'', ''related services and items'' and ''specially adapted DME'' as contained in § 1187.2 and § 1187.59(c)(5). The remaining amendments take effect July 1, 2001, and, except to the limited extent specified in § 1187.91(iv)(D), apply to cost reports for fiscal periods starting on or after January 1, 2001.
FEATHER O. HOUSTOUN,
Secretary(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 32 Pa.B. 477 (January 26, 2002).)
Fiscal Note: 14-473. (1) General Fund; (2) Implement Year 2001-02 is $12,147,000; (3) 1st Succeeding Year 2002-03 is $12,317,000; 2nd Succeeding Year 2003-04 is $18,454,000; 3rd Succeeding Year 2004-05 is $28,771,000; 4th Succeeding Year 2005-06 is $29,641,000; 5th Succeeding Year 2006-07 is $29,641,000; (4) 2000-01 Program--$722,565,000; 1999-00 Program--$693,625,000; 1998-99 Program--$721,631,000; (7) Long-Term Care; (8) recommends adoption. Funds have been included in the Long-Term Care appropriation of these costs.
Annex A
TITLE 55. PUBLIC WELFARE
PART III. MEDICAL ASSISTANCE MANUAL
CHAPTER 1187. NURSING FACILITY SERVICES
Subchapter A. GENERAL PROVISIONS § 1187.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Appraisal--A determination of the depreciated replacement cost of fixed or movable property, made by qualified personnel of an independent appraisal firm under contract with the Department.
* * * * * DME--Durable medical equipment--
(i) Movable property that:
(A) Can withstand repeated use.
(B) Is primarily and customarily used to serve a medical purpose.
(C) Generally is not useful to an individual in the absence of illness or injury.
(ii) Any item of DME is an item of movable property. There are two classes of DME:
(A) Exceptional DME. DME that has a minimum acquisition cost that is equal to or greater than an amount specified by the Department by notice in the Pennsylvania Bulletin and is either specially adapted DME or other DME that is designated as exceptional DME by the Department by notice in the Pennsylvania Bulletin.
(B) Standard DME. Any DME, other than exceptional DME, that is used to furnish care and services to a nursing facility's residents.
* * * * * Depreciated replacement cost--
(i) As used in conjunction with fixed property, depreciated replacement cost is the amount required to replace the fixed property with new and modern fixed property using the most current technology, code requirements/standards and construction materials that will duplicate the production capacity and utility of the existing fixed property at current market prices for labor and materials, less an allowance for accrued depreciation.
(ii) As used in conjunction with movable property, depreciated replacement cost is the amount required to replace the movable property with new and modern movable property, less an allowance for accrued depreciation.
* * * * * FRV--Fair rental value--The imputed rent for the fixed or movable property used at a nursing facility to provide nursing facility services to its MA residents.
* * * * * Fixed property--Land, land improvements, buildings including detached buildings and their structural components, building improvements, and fixed equipment located at the site of the licensed nursing facility that is used by the nursing facility in the course of providing nursing facility services to residents. Included within this term are heating, ventilating, and air-conditioning systems and any equipment that is either affixed to a building or structural component or connected to a utility by direct hook-up.
* * * * * Initial appraisal--An appraisal of the fixed property of a new nursing facility, made for the purpose of computing the fixed property component of that nursing facility's initial capital rate. An initial appraisal will be based, in part, upon an onsite inspection of the new nursing facility's fixed property conducted by qualified personnel of an independent appraisal firm under contract with the Department.
Interest--
(i) Capital interest. The direct actual cost incurred for funds borrowed to obtain fixed property, major movable property, or minor movable property.
(ii) Other interest. The direct actual cost incurred for funds borrowed on a short-term basis to finance the day-to-day operational activities of the nursing facility, including the acquisition of supplies.
* * * * * Limited appraisal--An appraisal requested by a nursing facility and conducted to determine the effect of changes in the fixed property of a nursing facility, where the cost of the changes to the nursing facility was more than $200,000 or 10% of the most recent appraised depreciated replacement cost of the nursing facility's fixed property, whichever is lower. A limited appraisal results in the modification of the depreciated replacement cost set forth in an initial appraisal, a reappraisal or an updated appraisal.
* * * * * Movable property--A tangible item that is used in a nursing facility in the course of providing nursing facility services to residents and that is not fixed property or a supply. There are two classes of movable property:
(i) Major movable property. Any movable property that has an acquisition cost of $500 or more.
(ii) Minor movable property. Any movable property that has an acquisition cost of less than $500.
Movable property appraisal--An appraisal of some or all of the movable property of a nursing facility. Depending upon circumstances, this appraisal may pertain to all movable property or only to major movable property. Movable property appraisals are conducted by qualified personnel of an independent appraisal firm under contract with the Department.
* * * * * Real estate tax cost--The cost of real estate taxes assessed against a nursing facility for a 12-month period, except that, if the nursing facility is contractually or otherwise required to make a payment in lieu of real estate taxes, that nursing facility's ''cost of real estate taxes'' is deemed to be the amount it is required to pay for a 12-month period.
Reappraisal--An appraisal of the fixed property of a nursing facility, made for the purpose of computing the fixed property component of that nursing facility's capital rate. A reappraisal will be based, in part, upon an onsite inspection of the nursing facility's fixed property conducted by qualified personnel of an independent appraisal firm under contract with the Department.
* * * * * Related services and items--Services and items necessary for the effective use of exceptional DME. The term is limited to:
(i) Delivery, set up and pick up of the equipment.
(ii) Service, maintenance and repairs of the equipment to the extent covered by an agreement to rent the equipment.
(iii) Extended warranties.
(iv) Accessories and supplies necessary for the effective use of the equipment.
(v) Periodic assessments and evaluations of the resident.
(vi) Training of appropriate nursing facility staff and the resident in the use of the equipment.
Reorganized nursing facility--An MA participating nursing facility that changes ownership as a result of the reorganization of related parties or a transfer of ownership between related parties.
Resident assessment--A comprehensive, standardized evaluation of each resident's physical, mental, psychosocial and functional status conducted within 14 days of admission to a nursing facility, promptly after a significant change in a resident's status and on an annual basis.
* * * * * Specially adapted DME--DME that is uniquely constructed or substantially adapted or modified in accordance with the written orders of a physician for the particular use of one resident, making its contemporaneous use by another resident unsuitable.
Supply--
(i) A tangible item that is used in a nursing facility in the course of providing nursing facility services to residents and is normally consumed either in a single use or within a single 12-month period.
(ii) Examples of supplies include:
(A) Resident care personal hygiene items such as soap, toothpaste, toothbrushes and shampoo.
(B) Resident activity supplies such as game and craft items.
(C) Medical supplies such as surgical and wound dressings, disposable tubing and syringes, and supplies for incontinence care such as catheters and disposable diapers.
(D) Dietary supplies such as disposable tableware and implements and foodstuffs.
(E) Laundry supplies such as soaps and bleaches
(F) Housekeeping and maintenance supplies such as cleaners, toilet paper, paper towels and light bulbs.
(G) Administrative supplies such as forms, paper, pens and pencils, copier and computer supplies.
* * * * * Total facility CMI--The arithmetic mean CMI of all residents regardless of the residents' sources of funding.
UMR--Utilization Management Review--An audit conducted by the Department's medical and other professional personnel to monitor the accuracy and appropriateness of payments to nursing facilities and to determine the necessity for continued stay of residents.
Updated appraisal--An appraisal of a nursing facility's fixed property that is based upon the depreciated replacement cost set forth in the nursing facility's initial appraisal or most recent reappraisal and brought forward to a new date. An updated appraisal does not involve an additional onsite inspection of the nursing facility's fixed property. The depreciated replacement costs set forth in an updated appraisal are determined through the application of factors to allow for appreciation and depreciation estimated to have taken place between the two appraisal dates.
* * * * * § 1187.22. Ongoing responsibilities of nursing facilities.
In addition to meeting the ongoing responsibilities established in Chapter 1101 (relating to general provisions), a nursing facility shall, as a condition of participation:
(1) Assure that every individual applying for admission to the facility is prescreened by the Department as required by section 1919 of the Social Security Act (42 U.S.C.A. § 1396r(e)(7)) and 42 CFR Part 483, Subpart C (relating to preadmission screening and annual review of mentally ill and mentally retarded individuals).
(2) Assure that every individual who receives MA, who is eligible for MA or who is applying for MA, is reviewed and assessed by the Department or an independent assessor and found to need nursing facility services prior to admission to the nursing facility, or in the case of a resident, before authorization for MA payment.
(3) Assure immediate access to a resident by the following individuals:
(i) The resident's physician.
(ii) A representative of the Secretary of the United States Department of Health and Human Services.
(iii) A representative of the Commonwealth who is involved in the administration of the MA Program.
(iv) An ombudsman authorized by the Department of Aging, including those employed by a local area agency on aging.
(v) A representative of Pennsylvania Protection and Advocacy, the agency designated under Subchapter III of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C.A. §§ 6041--6043) and the Protection and Advisory for Mentally Ill Individuals Act of 1986 (42 U.S.C.A. §§ 10801--10851).
(4) Assure that it is necessary for each resident to remain in the nursing facility.
(5) Assure that each resident's assessment data are complete and accurate in accordance with Federal regulations and the Health Care Financing Administration Resident Assessment Instrument Manual.
(6) Assure that the resident assessment data and the resident verification report are valid for the picture date and are submitted within the time limits specified in § 1187.33(a)(5)(relating to resident data reporting requirements).
(7) Assure that each invoice for nursing facility services provided to each MA resident is accurate.
(8) Have in operation a system for managing residents' funds that, at a minimum, fully complies with the requirements established by Federal law and Federal and State regulations in accordance with § 1187.78 (relating to accountability requirements related to resident personal fund management).
(9) Cooperate with reviews and audits conducted by the Department and furnish the residents' clinical and fiscal records to the Department upon request.
(10) Provide written responses to the Department for UMR reports requiring corrective action.
(11) Take corrective action within acceptable time frames as described in UMR reports.
(12) File an acceptable cost report with the Department within the time limit specified in § 1187.73 or § 1187.75 (relating to annual reporting; and final reporting).
(13) In addition to meeting the reporting requirements of § 1101.43 (relating to enrollment and ownership reporting requirements), notify the Department in writing within 30 days of a change in the name or address of corporate officers.
(14) Submit a written request for MA nursing facility participation to the Department if the nursing facility changes ownership and the new owner wishes the nursing facility to participate in the MA Program. The agreement in effect at the time of the ownership change will be assigned to the new owner subject to applicable statutes and regulations and the terms and conditions under which it was originally issued.
(15) Assure that individual resident information collected in accordance with this chapter is kept confidential and released only for purposes directly connected to the administration of the MA Program.
(16) Maintain a separate written record in accordance with instructions by the Department, identifying the requests or physician's orders received by the facility for exceptional DME or other DME as specified by the Department.
(17) Notify the Department in writing within 15 days if an MA eligible resident refuses DME that the Department has determined is medically necessary.
[Continued on next Web Page]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
