§ 1187.113b. Capital cost reimbursement waivers—statement of policy.
(a) Scope. This section applies to any participating provider of nursing facility services that intends to seek capital component payments under this chapter for existing postmoratorium beds in a nursing facility. This section also applies to participating providers who were granted moratorium waivers under Chapter 1181 (relating to nursing facility care).
(b) Purpose. The purpose of this section is to announce the criteria that the Department will apply to evaluate and approve applications for capital cost reimbursement waivers of § 1187.113(a) (relating to capital component payment limitation) and to reaffirm that nursing facilities that were granted waivers under Chapter 1181 continue to receive capital component payments under this chapter. Waivers of § 1187.113(a) will not otherwise be granted except as provided in this section.
(c) Submission and content of applications.
(1) An applicant seeking a waiver of § 1187.113(a) shall submit a written application and two copies to the Department at the following address:
Department of Human Services Bureau of Long Term Care Programs P. O. Box 2675 Harrisburg, PA 17105-2675 ATTN: MORATORIUM WAIVER REVIEW
(2) The written application shall address the criteria in subsections (d) and (e). If necessary, the application should include supporting documentation.
(d) Policy regarding additional capital reimbursement waivers. Section 1187.113(b) authorizes the Department to grant waivers of § 1187.113(a) to permit capital reimbursement as the Department in its sole discretion determines necessary and appropriate. The Department has determined that a waiver of § 1187.113(a) will only be necessary and appropriate when the Secretary or a designee finds that the waiver is in the Department’s best interests and will serve to promote the Commonwealth’s policy to encourage the growth of home and community-based services available to MA recipients.
(1) The Department will find that a waiver serves to promote the Commonwealth’s policy to encourage the growth of MA home and community-based services only if the Department concludes that the following criteria are met:
(i) The application for a waiver is made by or on behalf of a person who has been the legal entity of two MA participating nursing facilities that meet the following conditions:
(A) Have both been owned by the legal entity for at least 3 consecutive years prior to the date of application.
(B) Serve residents from the same primary service area.
(C) Have each maintained an average MA occupancy rate that exceeds the Statewide MA occupancy rate for 3 consecutive years prior to the date of the application.
(D) Are identified in the application.
(ii) The applicant agrees to permanently decertify all beds in and close one of the two nursing facilities identified in its application in consideration of obtaining a waiver to permit capital component payments to the remaining nursing facility identified in the application.
(iii) Closing the nursing facility will not create an access to care problem for day-one MA eligible recipients in the nursing facility’s primary service area.
(iv) One or more of the beds decertified as a result of the closing of the nursing facility is a premoratorium bed.
(v) The legal entity is willing and able to transfer all residents that are displaced by the closing of the nursing facility to the legal entity’s remaining nursing facility, unless the residents choose and are able to be transferred elsewhere.
(vi) The remaining nursing facility has one or more existing postmoratorium beds.
(vii) The applicant agrees that, as a condition of both obtaining and receiving continuing payment pursuant to the waiver, the remaining nursing facility will achieve and maintain an MA occupancy rate equal to or greater than the county average MA occupancy rate or the combined average MA occupancy rate (over the past 3 years) of the closed nursing facility and the remaining nursing facility, whichever is higher.
(viii) The applicant agrees that, if the waiver is granted, it will notify the Department in writing at least 90 days prior to the sale, transfer or assignment of a 5% or more ownership interest, as defined in section 1124(a)(3) of the Social Security Act (42 U.S.C.A. § 1320a-3(a)(3)), in the remaining nursing facility.
(ix) The legal entity is not disqualified from receiving a waiver under subsection (e).
(x) The applicant agrees that the waiver is subject to revocation under the conditions specified in subsection (f).
(xi) The applicant agrees that the Bureau of Hearings and Appeals affords an adequate, and appropriate forum in which to resolve disputes and claims with respect to the remaining nursing facility’s participation in, and payment under, the MA Program, including claims or disputes arising under the applicant’s provider agreement or addendum thereto, and that, in accordance with applicable provisions of 2 Pa.C.S. § § 501—508 and 701—704 (relating to administrative agency law) and § § 1101.84 and 1187.141 (relating to provider right of appeal; and missing facility’s right to appeal and to a hearing), the applicant will litigate claims pertaining to its remaining facility exclusively in the Bureau of Hearings and Appeals, subject to its right to seek appellate judicial review.
(xii) The applicant agrees that it will not challenge the Department’s denial of capital component payments to postmoratorium beds in the remaining nursing facility.
(xiii) The MA Program will experience overall cost savings if the waiver is granted.
(xiv) The proposal is otherwise in the best interests of the Department. In determining whether the proposal is in its best interests, the Department may consider the following:
(A) Whether the legal entity has demonstrated a commitment to serve MA recipients. In making this determination, the Department will consider the MA occupancy rate of all nursing facilities related by ownership or control to the legal entity.
(B) Whether the legal entity has demonstrated a commitment to provide and develop alternatives to nursing facility services, such as home and community-based services.
(C) Whether the legal entity is willing to refer all persons (including private pay applicants) who seek admission to the remaining nursing facility to the Department or an independent assessor for pre-admission screening, and to agree to admit only those persons who are determined by that screening to be clinically eligible for nursing facility care.
(D) Other information that the Department deems relevant.
(2) If the Department concludes that the criteria specified in paragraph (1) have been met, the Department will grant a waiver to permit capital component payments to the remaining nursing facility. Capital component payments made pursuant to the waiver shall be limited to the number of postmoratorium beds in the remaining nursing facility as of the date the waiver is granted, or the number of premoratorium beds decertified as a result of the closure of the other nursing facility, whichever number is less.
(e) Disqualification for past history of serious program deficiencies. The Department will not grant a waiver of § 1187.113(a) if:
(1) The legal entity, any owner of the legal entity or the nursing facility is currently precluded from participating in the Medicare Program or any state Medicaid Program.
(2) The legal entity or any owner of the legal entity, owned, operated or managed a nursing facility at any time during the 3-year period prior to the date of the application and one of the following applies:
(i) The nursing facility was precluded from participating in the Medicare Program or any state Medicaid Program.
(ii) The nursing facility had its license to operate revoked or suspended.
(iii) The nursing facility was subject to the imposition of sanctions or remedies for residents’ rights violations.
(iv) The nursing facility was subject to the imposition of remedies based on the failure to meet applicable Medicare and Medicaid Program participation requirements, and the nursing facility’s deficiencies immediately jeopardized the health and safety of the nursing facility’s residents; or the nursing facility was designated a poor performing nursing facility.
(f) Waiver revocation. The Department will revoke a waiver, recover any funds paid under the waiver, or take other actions as it deems appropriate if it determines that:
(1) The applicant failed to disclose information on its waiver application that would have rendered the legal entity or nursing facility ineligible to receive a waiver under subsections (d) and (e).
(2) The legal entity or nursing facility violate any one or more of the agreements in subsection (d)(1)(ii), (v) and (vii)—(xii).
(g) Policy regarding capital component payments to participating nursing facilities granted waivers under Chapter 1181. Waivers of the moratorium regulations granted to nursing facilities under Chapter 1181 remain valid, subject to the same terms and conditions under which they were granted, under the successor regulation in § 1187.113(a).
(h) Effectiveness of waivers granted under this section. Waivers authorized under this section will remain valid only during the time period in which this section is in effect.
(i) Definitions. The following words and terms, when used in this section, have the following meanings, unless the content clearly indicate otherwise:
Applicant—A person with authority to bind the legal entity who submits a request to the Department to waive § 1187.113(a) to permit capital component payments to a nursing facility provider for postmoratorium beds.
Day-one MA eligible—An individual who meets one of the following conditions:(i) Is or becomes eligible for MA within 60 days of the first day of the month of admission.
(ii) Will become eligible for MA upon conversion from payment under Medicare or a Medicare supplement policy, if applicable.
(iii) Is determined by the Department, or an independent assessor, based upon information available at the time of assessment, as likely to become eligible within 60 days of the first day of the month of admission or upon conversion to MA from payment under Medicare, or a Medicare supplement policy, if applicable.
Owner—A person having an ownership interest in a nursing facility enrolled in the MA Program, as defined in section 1124(a) of the Social Security Act.
Legal entity—A person authorized as the licensee by the Department of Health to operate a nursing facility that participates in the MA Program.
Person—An individual, corporation, partnership, organization, association or a local governmental unit, authority or agency thereof.
Post-moratorium beds—Nursing facility beds that were built with an approved CON or letter of nonreviewability dated after August 31, 1982, or nursing facility beds built without an approved CON or letter of nonreviewability after December 18, 1996.
Pre-moratorium beds—Nursing facility beds that were built under an approved CON or letter of nonreviewability dated on or before August 31, 1982, and for which the Department is making capital component payments.
Primary service area—The county in which the nursing facility is physically located. If the provider demonstrates to the Department’s satisfaction that at least 75% of its residents originate from another geographic area, the Department will consider that geographic area to be the provider’s primary service area.
Source The provisions of this § 1187.113b adopted June 25, 1999, effective April 17, 1999 or the effective date of an amendment to the Commonwealth’s Medicaid State Plan incorporating this statement of policy into the Commonwealth’s approved State Plan, whichever date is later, 29 Pa.B. 3218.
Cross References This section cited in 55 Pa. Code § 1187.108 (relating to gross adjustments to nursing facility payments).
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