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From Health Law Daily, March 19, 2013

CMS issues final rule on notice required for closure of LTC facilities

By Geri Szuberla, JD, LLM

Written notice of the closure of a long-term care (LTC) facility and a plan for the relocation of residents must be provided by the administrator of the facility at least 60 days prior to the impending closure, according to rules finalized by CMS today (Final rule, 78 FR 16795, March 19, 2013). The administrator must notify the Secretary of HHS, state LTC ombudsmen, residents, residents' legal representatives and other responsible parties of such closures and must provide notice earlier than 60 days if state law so requires. Violations of this requirement could result in civil monetary penalties (CMPs) for the administrator. The final rule makes technical changes to an Interim final rule, issued on February 18, 2011 (effective March 23, 2011), that revised the requirements that an LTC facility must meet in order to qualify to participate as a skilled nursing facility (SNF) in the Medicare program, or a nursing facility (NF) in the Medicaid program. The final rule, effective on April 18, 2013, explains the changes made by the interim rule as well as the technical changes made in today’s final rule in response to public comments.

Regulations amended. The 2011 interim rule revised these regulations: 42 CFR secs. 483.12 and 483.75 (notice of transfer or discharge); secs. 488.426, 488.446 and 488.450 (survey and enforcement); secs. 489.52. 489.53 and 489.55 (provider agreements); and secs. 489.3 and 498.5 (appeal rights). CMS issued these regulations in an interim final rule to meet the March 23, 2011, statutory deadline for implementation of sec. 6113 of the Affordable Care Act, which added requirements for LTC facility closures at Social Security Act sec. 1128I(h) (42 USC 1320a-7i). Also, CMS said that delaying implementation would have caused unjustified harm to LTC facility residents, families and visitors.

Administrators. This final rule clarifies in response to public comments that any time a state law applicable to providers or suppliers of Medicaid services in that state is more stringent than the federal requirements, such as a state requirement of a 90 day notice, CMS must enforce the more stringent state requirement as a condition of Medicare payment.

An individual who is the administrator of a SNF who is dissatisfied with the decision of CMS to impose sanctions authorized under 42 CFR sec. 488.446 is entitled to a hearing before an ALJ, to request Board review of the hearing decision, and to seek judicial review of the Board’s decision. The minimum sanction for a first offense is $500. A few commenters on the interim rule expressed concerns about the CMP levels being too low, considering that sec. 6113 of the Affordable Care Act permits fines of up to $100,000 and subsequent exclusion from participating in any federal healthcare programs.

The statutory language established a maximum limit, but afforded CMS the discretion to determine the actual amount of the sanctions, CMS responded. Due to the many possible combinations of violations that could be cited, the amount of the penalty will be determined based on the survey findings, CMS said. For example, if it is determined that an administrator of record completely fails to take the necessary and timely actions to adhere to the closure requirements, thus potentially causing harm to residents, then the administrator could be subject to additional CMPs. Any sanctions that have been levied against an administrator could also be reviewed by the state’s licensing agency for possible disciplinary action, including suspension or termination of the administrator’s license, in those states that provide for the licensing of LTC facility administrators. Interpretive guidelines are being developed by CMS that will establish criteria for determination of its CMP amounts.

Under a new subparagraph added to the regulations at sec. 498.5(m), an administrator “who is dissatisfied with the decision of CMS to impose sanctions authorized under sec. 488.446 is entitled to a hearing before an administrative law judge, to request Board review of the hearing decision, and to seek judicial review of the Board’s decision.

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