DOH Publishes Regulations Affecting Nursing Home Sales and Certain Affiliations
The Department of Health (DOH) has published regulations that impose new notice requirements and new standards for decision-making on applications to establish or change ownership or control of nursing homes. The new standards will apply not only to new nursing home establishments and sales, but also to mergers and affiliations under an active parent. The regulations limit the ability of the State’s Public Health and Health Planning Council (PHHPC) to approve applications submitted by entities whose owners or directors are affiliated with nursing homes that have poor quality ratings or recurrent and serious deficiencies. These regulations implement legislation enacted earlier this year over LeadingAge NY's opposition and are subject to public comment until Jan. 18th. LeadingAge NY will be submitting comments on the regulations and welcomes member input.
The regulations require the Department to notify the long term care ombudsman of applications for establishment, including changes in ownership or control. They also impose notice requirements on the current operator of the facility and the applicant seeking to acquire an ownership interest or control of the facility. They require both the operator and the applicant to notify the residents and their designated representatives, the staff, and the union representatives, if any, of an application for a change in ownership or control within 30 days of the Department’s acknowledgment of receipt of the application. The notice must include:
- the pending change of ownership, as well as the legal entity and individual name(s) of the proposed buyer;
- the application number;
- instructions on how to submit comments on the application; and
- a link for the general public to view the application using the New York State Electronic Certificate of Need (NYSE-CON) system.
Residents, staff, and union representatives must be notified again by the applicant and the operator within 24 hours of the scheduling of the application for consideration by a PHHPC committee. The notification must include the date, location(s), and time of the meeting of the committee.
Standards for PHHPC Approval
All Facilities Licensed under Public Health Law Article 28: The regulations include not only changes to the nursing home approval standards, but also revisions to the standards applicable to Article 28 facilities generally. It is unclear whether nursing home applications are subject to both the general requirements and the nursing home-specific standards.
As under the current regulations, the proposed regulations require that the PHHPC determine, with respect to an applicant who is already or has been within the past 10 years affiliated with a health care facility, that a substantially consistent high level of care has been rendered in each such facility. To make that determination, the PHHPC is directed to consider the facility inspections, surveys, and other available information. It must weigh the gravity of any violation, the manner in which the applicant exercised supervisory responsibility over facility operation, and the remedial action, if any, taken after violation was discovered. The PHHPC may not find a substantially consistent high level of care if violations were “recurrent” or were not promptly corrected.
Notably, the proposed regulations attempt to clarify the treatment of repeated violations. They include the following definitions:
- “Recurrent” means a violation with the same root cause as a violation previously cited within the last 10 years.
- "Not promptly corrected” means failing to submit a plan of correction within 10 calendar days of the issuance of the statement of deficiencies and failing to provide an acceptable date of compliance based on the violation(s) requiring correction.
Nursing Homes: The proposed regulations include more specific and stringent standards for nursing homes. As noted above, it is unclear whether nursing home applicants must meet both the nursing home standards and the general standards. Specifically, with respect to applicants to own or control a nursing home, a lookback period of seven years will be applied for purposes of evaluating the compliance and quality of the applicant's affiliated nursing homes. In order to be approved, the applicant must demonstrate satisfactory character, competence, and standing in the community and a consistently high level of care in each affiliated nursing home.
In making this determination, the PHHPC is directed to consider:
- the findings of facility inspections and surveys;
- any instance of a facility affiliated with the applicant/operator earning a two-star rating or less by the Centers for Medicare and Medicaid Services (CMS), provided that a two-star rating may be mitigated where an applicant’s ownership interest in the facility commenced within the prior five years;
- any instance where there have been violations of the state or federal nursing home code, or other applicable rules and regulations, that threatened to directly affect the health, safety, or welfare of any patient or resident and were recurrent or were not promptly corrected, including, but not limited to, repeat deficiencies for the same or similar violations over a three-year period or during the entire duration of ownership if less than three years, or any facility that has been in receivership;
- any instance where a facility has closed or has closed as a result of a settlement agreement from a decertification action or licensure revocation;
- any instance where a health care-related facility, agency, or program was the subject of a decertification action or licensure revocation;
- any involuntary termination from the Medicare or Medicaid program; and
- any instance of a nursing home being designated a Special Focus Facility or Special Focus Facility Candidate.
The regulations require the PHHPC to evaluate the above factors based on: (i) the gravity of any violation, the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, and the remedial action, if any, taken after the violation was discovered; and (ii) the percentage of nursing homes in a portfolio with a two-star or less rating. In evaluating the gravity of the violation, the PHHPC must consider whether the violation threatened or resulted in direct, significant harm to the health, safety, or welfare of patients/residents. To assess the manner in which the applicant/operator exercised supervisory responsibility over the facility operation, the PHHPC must consider whether a reasonably prudent individual should have been aware of the conditions that resulted in the violation and whether the individual was notified about the condition(s) that resulted in the violation. In evaluating any remedial action taken, the PHHPC must consider whether the applicant investigated the circumstances surrounding the violation and took steps to prevent the reoccurrence of the violation. In considering the qualifications of an applicant with affiliated facilities that earned a two-star or lower rating, the PHHPC must determine the percentage of nursing homes in which each individual of the applicant/operator has held an ownership interest for 48 months or more and has earned a CMS star rating of two stars or less.
The PHHPC is prohibited from finding a consistently high level of care when any of the following has occurred:
- Closure of a facility or a facility has closed as a result of a settlement agreement from a decertification action or licensure revocation.
- A health care-related facility, agency, or program was the subject of a decertification action or licensure revocation.
- Involuntary termination of a health care-related facility, agency, or program from the Medicare or Medicaid program.
- Violations found that either threatened to directly affect patient/resident health, safety, or welfare or resulted in direct, significant harm to the health, safety, or welfare of patients/residents, and were recurrent or were not promptly corrected.
In addition, when greater than 40 percent of the nursing homes in the portfolio of any individual of the applicant/operator have a CMS star rating of two stars or fewer, and the individual has held an ownership interest in such nursing home for 48 months or more, the PHHPC may not find a consistently high level of care. If the individual's portfolio contains fewer than five facilities, the PHHPC must make a determination on a case-by-case basis, using the criteria set forth in the regulations.
Under the nursing home provisions of the regulations:
- A violation is recurrent if it has the same root cause as a violation previously cited within the last seven years.
- A violation is not promptly corrected if a plan of correction has not been submitted to the Department within 10 calendar days of the issuance of the statement of deficiencies, and the facility has failed to provide an acceptable date of compliance based on the violation(s) requiring correction.
LeadingAge NY is concerned that these provisions may prevent beneficial affiliations among non-profit providers under active parents. We are looking for member feedback to inform our comments. Please submit your input to LeadingAge NY here by Jan. 4th. You may also submit comments directly to DOH here by Jan. 18th.
Contact: Karen Lipson, firstname.lastname@example.org, 518-867-8838