RULES AND REGULATIONS
STATE BOARD OF EXAMINERS OF
NURSING HOME ADMINISTRATORS
[49 PA. CODE CH. 39]
Biennial Renewal Fees
[36 Pa.B. 2678]
[Saturday, June 3, 2006]The State Board of Examiners of Nursing Home Administrators (Board) amends § 39.72 (relating to fees) to read as set forth in Annex A. The final-form rulemaking increases the biennial license renewal fee for nursing home administrators from $108 to $297.
Effective Date
The final-form rulemaking will be effective upon publication in the Pennsylvania Bulletin. The new fee will apply to the biennial renewal period beginning July 1, 2006.
Statutory Authority
Section 7.1(a) of the Nursing Home Administrators License Act (act) (63 P. S. § 1107.1(a)) requires the Board to increase fees by regulation to meet or exceed projected expenditures if the revenues raised by fees, fines and civil penalties are not sufficient to meet Board expenditures.
Background and Need for Amendments
The Board's current biennial license renewal fee for nursing home administrators was established by regulation at 24 Pa.B. 6564 (December 31, 1994). Under section 7.1(a) of the act, the Board is required by law to support its operations from the revenue it generates from fees, fines and civil penalties. In addition, the act provides that the Board must increase fees if the revenue raised by fees, fines and civil penalties is not sufficient to meet expenditures over a 2-year period. The biennial renewal fees fund nearly all of the Board's costs.
At Board meetings in July and December 2004, the Department of State's Bureau of Finance and Operations (BFO) presented a summary of the Board's revenue and expenses for Fiscal Years (FY) 2001-2002 through FY 2003-2004 and projected revenue and expenses through FY 2010-2011. The summary, presented in the following table, demonstrates that the Board must raise fees to meet or exceed projected expenditures to comply with section 7.1(a) of the act. The BFO projected a deficit of $128,711.53 in FY 2004-2005, a deficit of $125,711.53 in FY 2005-2006, a deficit of $319,711.53 in FY 2006-2007, a deficit of $331,711.53 in FY 2007-2008, a deficit of $541,711.53 in FY 2008-2009, a deficit of $569,711.53 in FY 2009-2010 and a deficit of $795,711.53 in FY 2010-2011. Therefore, the BFO recommended that the Board raise fees to meet or exceed projected expenditures, in compliance with section 7.1(a) of the act.
2001-2002 beginning balance 178,883.59 FY 01-02 revenue 44,149.67 Adjust. for prior year expenses 4,265.43 FY 01-02 expenses 164,000.00 Remaining balance 54,767.83 2002-2003 beginning balance 54,767.83 FY 02-03 revenue 249,850.03 Prior year returned funds 0.00 FY 02-03 expenses 182,000.00 Remaining balance 122,617.86 2003-2004 beginning balance 122,617.86 FY 03-04 revenue 229,599.72 Prior year returned funds 0.00 FY 03-04 expenses 235,000.00 Remaining balance 117,217.58 2004-2005 beginning balance 117,217.58 FY 04-05 projected revenue 60,000.00 Prior year returned funds (estimated) 20,000.00 Adjust. for prior year expenses (estimated) 85,929.11 FY 04-05 projected expenses 240,000.00 Remaining balance (128,711.53) 2005-2006 beginning balance (128,711.53) FY 05-06 projected revenue 250,000.00 FY 05-06 projected expenses 247,000.00 Remaining balance (125,711.53) 2006-2007 beginning balance (125,711.53) FY 06-07 projected revenue 60,000.00 FY 06-07 projected expenses 254,000.00 Remaining balance (319,711.53) 2007-2008 beginning balance (319,711.53) FY 07-08 projected revenue 250,000.00 FY 07-08 projected expenses 262,000.00 Remaining balance (331,711.53) 2008-2009 beginning balance (331,711.53) FY 08-09 projected revenue 60,000.00 FY 08-09 projected expenses 270,000.00 Remaining balance (541,711.53) 2009-2010 beginning balance (541,7111.53) FY 09-10 projected revenue 250,000.00 FY 09-10 projected expenses 278,000.00 Remaining balance (569,711.53) 2010-2011 beginning balance (569,711.53) FY 10-11 projected revenue 60,000.00 FY 10-11 projected expenses 286,000.00 Remaining balance (795,711.53) As the previous table indicates, the BFO estimates that at the close of FY 2004-2005, the Board's expenses will exceed its revenues by $128,711.53. The BFO anticipates that in subsequent fiscal years, the Board's expenses will continue to exceed its revenues. Without an increase, the projected deficit in FY 2010-2011 would be $795,711.53.
The Board's review of its actual and projected expenses for the past 5 years revealed significant shortfalls in the areas of enforcement and investigation, legal office expenses and legislative and regulatory analysis. For example, despite annual increases in projected expenses, actual enforcement and investigation costs increased $13,242.21 from FY 2002-2003 to FY 2003-2004. The actual expenses for the legal office and legislative and regulatory analysis increased $18,879.37 and $7,975.38, respectively, from FY 2002-2003 to FY 2003-2004. Overall increased expenditures in these program areas have resulted from a steady increase in the number of complaints opened each year regarding nursing home administrators and therefore greater investigative, enforcement and legal activity. At the same time, the Board's licensee population has declined by 400 licensees over the past 5 years, decreasing the Board's biennial revenue. The BFO anticipates that the proposed new biennial renewal fees will enable the Board to recapture the current deficit and meet its estimated expenditures for the next 10 years. Biennial renewal fees were last raised from $85 to $108 in the final-form rulemaking published at 24 Pa.B. 6564. This increase was first applied to the 1996 biennial renewal.
In determining the fee, the Board also considered the renewal fees charged to nursing home administrators in the six surrounding states. The Board found that the proposed increase to $297 would be lower than two fees and higher than four fees charged by contiguous states, and therefore consistent with the renewal fees charged in the surrounding states.
Comment and Review of Proposed Rulemaking
Publication of proposed rulemaking at 35 Pa.B. 2402 (April 23, 2005) was followed by a 30-day public comment period during which the Board received 17 comments. The Pennsylvania Health Care Association (PHCA) and The Pennsylvania Association of County Affiliated Homes were among those who commented. The rest of the comments were from individual licensees. In accordance with the Regulatory Review Act (71 P. S. §§ 745.1--745.15), the Independent Regulatory Review Commission (IRRC), the House Professional Licensure Committee (HPLC) and the Senate Consumer Protection and Professional Licensure Committee (SCP/PLC) reviewed the proposed rulemaking. The HPLC and SCP/PLC had no objections, suggestions or comments. The following is the Board's response to IRRC's comments and the public comments.
In general, all of the public commentators believe the biennial increase is excessive. Specifically, IRRC questioned why it was necessary to increase the fee to a level that goes beyond erasing the current deficit to meet projected expenditures over a decade and urged the Board to consider raising fees only in the amount needed to resolve deficits in the short term. The reason for developing a renewal fee to erase the current deficit and meet projected expenditures over a decade is because the process to obtain a fee increase is labor intensive, costly and can take up to 2 years to get approved. The Board considered several fee increase options to ensure that the most reasonable fee increase would erase the current deficit and carry a modest balance to cover any unplanned expenses such as a large legal case that could have the potential to deplete funds quickly. Based on the options presented, it was determined that the 175% fee increase would generate the revenue needed to erase the current deficit and meet the Board's estimated expenditures in the near future.
IRRC also suggested that, as an alternative to the proposed rulemaking, fee increases could be phased in over a specific time frame. IRRC noted that this approach would have a less drastic economic impact on licensees and would allow the Board to adapt to changes in the number of licensees and enforcement activity. The PHCA also suggested phasing in the increase over a period of 8 to 10 years. However, section 7.1(a) of the act specifically states that ''[i]f the revenues generated by fees, fines and civil penalties imposed pursuant to this act are not sufficient to match expenditures over a two-year period, the board shall increase those fees by regulation, subject to review in accordance with the Regulatory Review Act, such that the projected revenues will meet or exceed projected expenditures.'' The 175% fee increase will meet this mandate and the Board's operations will not be interrupted. If a graduated fee increase was implemented, it would take several years for the Board to recover the projected deficit and generate sufficient revenue to meet estimated expenditures in the future. This could cause the Board to cease operations and therefore would pose a threat to the public's health, safety and welfare.
IRRC also commented that the Board should identify the financial and economic impacts of the final-form rulemaking on individual licensees. In this regard, IRRC urged the Board to consider the potential impacts on the profession and the facilities that licensees administer, given the recent decline in the number of licensees and also urged the Board to consider whether, if the decline continues, a steep fee increase will have a negative impact on long-term care facilities and their ability to maintain and protect the health, safety and welfare of their residents. As IRRC recognized in its comments, a number of licensees who commented contend that the increase will be a significant deterrent for licensees to renew and stay in the profession and will dissuade newcomers from seeking licensure and entry into the profession. The only financial and economic impact that the Board can identify with certainty is that nursing home administrators will be required to pay $189 more than they currently pay to renew their licenses. The Board cannot speculate on whether the fee increase will have a deterrent effect on licensees and potential licensees that it will ultimately have a negative impact on long-term care facilities and their ability to maintain and protect the health, safety and welfare of their residents. Nevertheless, the Board believes that the residents of long-term care facilities are at greater risk of harm if the Board ceases to operate than they are by the potential ramifications of the fee increase.
A licensee who commented noted that the proposed fee is higher than four contiguous states and lower than two others. This commentator questioned whether the average nursing home administrator wage have been reviewed and compared in the two lower states and whether the number of nursing homes in those states has been compared with this Commonwealth. The Board has not performed a review or comparison because these considerations are not relevant to the fee increase. Under section 7.1(a) of the act, the only consideration relevant to the fee increase is whether the revenue raised by fees, fines and civil penalties is sufficient to meet expenditures over a 2-year period.
Description of Amendments
Based upon the previous expense and revenue estimates provided to the Board, the Board is amending § 39.72 to increase the fee for biennial renewal of licenses for nursing home administrators from $108 to $297.
Fiscal Impact
The final-form rulemaking will increase the biennial renewal fee for nursing home administrators. The final-form rulemaking should have no other fiscal impact on the private sector, the general public or political subdivisions.
Paperwork Requirements
The final-form rulemaking will require the Board to alter some of its forms to reflect the new biennial renewal fee. However, it should not create additional paperwork for the private sector.
Sunset Date
The act requires that the Board monitor its revenue and costs on a fiscal year and biennial basis. Therefore, no sunset date has been assigned.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on April 23, 2005, the Board submitted a copy of the notice of proposed rulemaking, published at 35 Pa.B. 2402, to IRRC and the Chairpersons of the HPLC and the SCP/PLC for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC, the HPLC and the SCP/PLC were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the HPLC and the SCP/PLC and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on March 14, 2006, the final-form rulemaking was approved by the HPLC. On April 18, 2006, the final-form rulemaking was deemed approved by the SCP/PLC. Under section 5.1(e) of the Regulatory Review Act, IRRC met on April 19, 2006, and approved the final-form rulemaking.
Contact Person
Further information may be obtained by contacting Christina Stuckey, Administrative Assistant, State Board of Examiners of Nursing Home Administrators, P. O. Box 2649, Harrisburg, PA 17105-2649, cstuckey@state.pa.us.
Findings
The Board finds that:
(1) Public notice of the proposed rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder, 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments were considered.
(3) This final rulemaking does not enlarge the purpose of the proposed rulemaking published at 35 Pa.B. 2402.
(4) This final-form rulemaking is necessary and appropriate for administration and enforcement of the act.
Order
The Board, acting under its authorizing statutes, orders that:
(a) The regulations of the Board, 49 Pa. Code Chapter 39, are amended by amending § 39.72 to read as set forth in Annex A.
(b) The Board shall submit this order and Annex A to the Office of General Counsel and to the Office of Attorney General as required by law.
(c) The Board 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 on publication in the Pennsylvania Bulletin.
BARRY S. RAMPER, II,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 36 Pa.B. 2251 (May 6, 2006).)
Fiscal Note: Fiscal Note 16A-6210 remains valid for the final adoption of the subject regulation.
Annex A
TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS
CHAPTER 39. STATE BOARD OF EXAMINERS OF NURSING HOME ADMINISTRATORS
RENEWAL § 39.72. Fees.
The following is a schedule of fees charged by the Board:
Biennial renewal of nursing home administrators license $297 License application fee $40 Temporary permit fee $145 Certification of examination scores $25 Verification of licensure or temporary permit $15 Continuing education provider application fee $40 Continuing education program application fee per clock hour $15 Continuing education individual program application fee $20
[Pa.B. Doc. No. 06-976. Filed for public inspection June 2, 2006, 9:00 a.m.]
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