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PA Bulletin, Doc. No. 24-1866

NOTICES

INDEPENDENT REGULATORY REVIEW COMMISSION

Notice of Comments Issued

[54 Pa.B. 8568]
[Saturday, December 28, 2024]

 Section 5(g) of the Regulatory Review Act (71 P.S. § 745.5(g)) provides that the Independent Regulatory Review Commission (IRRC) may issue comments within 30 days of the close of the public comment period. IRRC comments are based upon the criteria contained in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b).

 IRRC has issued comments on the following proposed regulation. The agency must consider these comments in preparing the final-form regulation. The final-form regulation must be submitted within 2 years of the close of the public comment period or it will be deemed withdrawn.

Reg. No.  Agency/Title  Close of the Public
Comment Period		IRRC
Comments
Issued
14-556Department of Human Services
Transition to Patient-Driven Payment Model
54 Pa.B. 6427 (October 12, 2024)		11/12/2412/12/24

Department of Human Services Regulation # 14-556 (IRRC # 3416)

Transition to Patient-Driven Payment Model

December 12, 2024

 We submit for your consideration the following comments on the proposed rulemaking published in the October 12, 2024 Pennsylvania Bulletin. Our comments are based on criteria in Section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b). Section 5.1(a) of the Regulatory Review Act (71 P.S. § 745.5a(a)) directs the Department of Human Services (Department) to respond to all comments received from us or any other source.

Fiscal impact; Reasonableness; Protection of the public health, safety, and welfare; implementation procedures.

 This proposed regulation will amend a data element in the Department's case-mix payment system for nonpublic and county nursing facilities. The case-mix rate setting methodology for these nursing facilities uses the Resource Utilization Groups, Version III (RUG-III) classification system in setting Medical Assistance (MA) payment rates for nursing facilities. RUG III is a category-based resident classification system used to classify nursing facility residents into groups based on their characteristics and clinical needs. The Federal Centers for Medicare and Medicaid (CMS) is ending support for RUG-III.

 The Department proposes to replace the RUG-III data element of the case-mix payment system with the Payment Driven Payment Model (PDPM). The proposed rulemaking includes the following definition of PDPM:

A case-mix classification system for classifying nursing facility residents into payment groups based on their characteristics and clinical needs. The system includes five case-mix adjusted components: Physical Therapy, Occupational Therapy, Speech Language Pathology, Nursing and Non-Therapy Ancillary.

 The Department has opted to incorporate only the nursing component of the PDPM in its revised case-mix payment system for nonpublic and county nursing facilities.

 Representative Doyle Heffley and Representative Perry Warren, Chairmen of the House Human Services Committee, have submitted joint comments on the proposed regulation. Their comments ask the Department to ''. . .provide a full detailed analysis to support the conclusions set forth in the Preamble and Regulatory Analysis Form and broadly share that information.'' They also ask the Department to explain its decision-making process related to only including the PDPM nursing component in the revised case-mix payment system. Two organizations that represent nursing facilities and numerous individual nursing facilities have submitted similar comments.

Fiscal impact

 We concur with the concerns raised by the Chairmen and the public commentators. We encourage the Department to provide the regulated community with more detailed information regarding the assumptions and data used to quantify the fiscal impact the rulemaking will have on nursing facilities before the final-form rulemaking is submitted to this Commission and the designated standing committees. This will allow those facilities to analyze the data and provide meaningful feedback to the Department. The Regulatory Analysis Form (RAF) submitted with the final-form rulemaking should incorporate the feedback provided by the regulated community regarding the fiscal impact the regulation will have on nonpublic and county nursing facilities.

Reasonableness

 Legislators and commentators believe it is unlikely that using only the nursing component will allow the Department to accurately determine an appropriate reimbursement rate for nursing facilities. We, therefore, ask the Department to explain the reasonableness of its decision to include only one component of PDPM, nursing, in its case-mix system.

 In addition, it is our understanding that other states are in the process of incorporating PDPM into their payment reimbursement formulas for certain nursing facilities. We ask the Department to provide a comparison of how other states are making the transition to PDPM. Are those states incorporating all five components into their formulas? What results have other states experienced in their transitions? This information should be included in the RAF submitted with the final-form rulemaking.

Protection of the public health, safety, and welfare

 Commentators have stated that the proposed rulemaking could have an unintended consequence for residents in need of certain nursing facility services. They believe the rulemaking will not capture the costs of other services that nursing facilities provide to residents. This could limit access to needed services and affect the health, safety, and welfare of those residents. If other components of PDPM are not added to the case-mix payment system in the final-form regulation, we ask the Department to explain how the health, safety, and welfare of all residents of nonpublic and county nursing facilities will be protected.

Implementation procedure

 A commentator has raised a concern with the effective date of the rulemaking and how it will be implemented. The Effective Date section of the Preamble states that August 1, 2025 is the date the rulemaking will take effect. However, the Department's explanation of Appendix D in the Preamble states, ''Appendix D is a chart. . . the Department will use to set each nursing facility's PDPM resident care rate beginning April 1, 2026.'' We ask the Department to clarify when compliance with the rulemaking will be required by the regulated community.

GEORGE D. BEDWICK, 
Chairperson

[Pa.B. Doc. No. 24-1866. Filed for public inspection December 27, 2024, 9:00 a.m.]


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