DAR File No. 42182

Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-27

Medicaid Certification of Nursing Care Facilities

Notice of Proposed Rule

(Repeal and Reenact)

DAR File No.: 42182
Filed: 10/02/2017 05:20:14 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to comply with new provisions found in Section 26-18-503, which relate to the transfer of Medicaid-certified programs and the settling of outstanding amounts.

Summary of the rule or change:

In contrast to the old rule, the new rule includes definitions that apply to the transfer of ownership of nursing care facility programs. It also includes provisions for penalties and interest for outstanding amounts the transferor owes Medicaid, and requires the transferor to void all previous claims for services. The new rule also includes transferee application, enrollment, and submission requirements upon the transferee becoming a Medicaid provider. The old rule included items found in Section 26-18-503.

Statutory or constitutional authorization for this rule:

• Section 26-18-503
• Section 26-18-3

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget because the Legislature has already allocated funds to cover the cost of implementing these changes in accordance with state law.

local governments:

There is no cost to local governments because they do not fund nursing care facility programs under Medicaid.

small businesses:

There is no impact to small businesses because the Legislature has already allocated funds to cover the cost of implementing these changes in accordance with state law.

persons other than small businesses, businesses, or local governmental entities:

There is no impact to Medicaid providers or to Medicaid members because the Legislature has already allocated funds to cover the cost of implementing these changes in accordance with state law.

Compliance costs for affected persons:

There are no compliance costs to a single Medicaid provider or to a Medicaid member because the Legislature has already allocated funds to cover the cost of implementing these changes in accordance with state law.

Comments by the department head on the fiscal impact the rule may have on businesses:

After conducting a thorough analysis, it was determined that this proposed rule will not result in a fiscal impact to businesses.

Joseph K. Miner, MD, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

• Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/14/2017

This rule may become effective on:

12/01/2017

Authorized by:

Joseph Miner, Executive Director

R414. Health, Health Care Financing, Coverage and Reimbursement Policy.

[R414-27. Medicaid Certification of Nursing Care Facilities.

R414-27-1. Introduction and Authority.

(1) This rule governs the certification of nursing care facilities to receive Medicaid payments for services to Medicaid eligible individuals.

(2) This rule implements Title 26, Chapter 18, Part 5.

(3) Section 26-18-3 authorizes this rule.

 

R414-27-2. Medicaid Certification Requirements.

(1) The director of the Division of Health Care Financing (DHCF) within the Department of Health may authorize Medicaid certification for a nursing care facility that:

(a) is in compliance with 42 CFR Part 483 or has a plan of correction approved by the Department to remedy areas of noncompliance;

(b) is in compliance with the Health Care Facility Licensing and Inspection Act, Title 26, Chapter 21, and the rules applicable to nursing homes made pursuant to that act or has a plan of correction approved by the Department to remedy areas of noncompliance; (c) has not increased its certified bed capacity by more than 30 percent annually after March 31, 2004, except as authorized in Subsection 26-18-503(5);

(d) is Medicare-certified by the Centers for Medicare and Medicaid Services to provide care for Medicare clients;

(e) since March 18, 2008, has not increased its licensed bed capacity except in conjunction with an increase in certified bed capacity as authorized in Subsection 26-18-503(5) or for which the DHCF Director has approved the increase in the nursing care facility program's certified bed capacity expansion before October 15, 2007; and

(f) since March 18, 2008, has not increased its certified bed capacity except as authorized in Subsection 26-18-503(5).

(2) The "independent analysis" referred to in Subsection 26-18-503(5)(b) must be performed by unrelated certified public accountants in accordance with generally accepted accounting principles.

(3) A nursing care facility is not eligible for Medicaid certification if it expands bed capacity without prior approval from the DHCF Director as authorized in this section, except as outlined in Section 26-18-505.

 

R414-27-3. Medicaid Certification Subsequent to Change of Ownership.

(1) The owner of a nursing care facility program may transfer ownership to another person. The transferred nursing care facility may become Medicaid certified if:

(a) the nursing care facility is in compliance with Section R414-27-2 at the time of transfer;

(b) the transferee operates the nursing care facility at the same physical location as the previous Medicaid-certified program;

(c) the transferee agrees to pay the Department's litigation costs if any third party asserts a right to operate the transferred Medicaid-certified nursing care facility;

(d) the transferee certifies that bed capacity will not expand through a third party owner with a legitimate claim to operate the transferred Medicaid-certified nursing care facility;

(e) the transferee applies for and takes all necessary steps to become Medicaid-certified within one year of the date the previously certified nursing care facility ceased to provide medical assistance to a Medicaid client;

(2) If a third party is found, by final agency action of the Department after exhaustion of all administrative and judicial appeal rights, to be entitled to operate a certified program at the physical facility, the transferee shall voluntarily comply with Subsection 26-18-503(4)(b). The Department of Health may revoke Medicaid certification if the transferee does not comply with Subsection 26-18-503(4)(b).

(3) the transferee that receives Medicaid certification after taking ownership under the provisions of Subsection R414-27-3(1) does not assume the Medicaid liabilities of the previous nursing care facility program if the transferee is not a third party owner in whole or in part of the previous nursing care facility program.

 

R414-27-4. Medicaid Certification Subsequent to Renovation or Construction of a New Physical Facility.

A nursing care facility operating in a new or renovated facility is eligible for re-certification if the nursing care facility:

(1) was certified at the time of renovation or new construction;

(2) was in compliance with Sections R414-27-2 and R414-27-3 when it ceased providing care to Medicaid clients at the prior location or before beginning renovations;

(3) is in the same county or within a five mile radius of the original facility;

(4) the construction is completed no later than three years after the date the nursing care facility ceased to operate in the original facility; and

(5) notifies DHCF no later than 90 days after the date outlined in Subsection R414-27-4(1) of its intent to retain its Medicaid certification.]

R414-27. Medicaid Enrollment Process for Nursing Care Facilities.

R414-27-1. Introduction and Authority.

(1) This rule governs the enrollment of nursing care facilities to receive Medicaid payments for services to Medicaid eligible individuals.

(2) This rule outlines the duties of the transferor and transferee following a change of ownership.

(3) This rule is authorized under Sections 26-18-3 and 26-18-5.

 

R414-27-2. Definitions.

(1) "Change of Ownership" (CHOW) means the owner of a licensed and certified nursing care facility program (transferor) transfers ownership of that program to another entity (transferee).

(2) "Transferor" is the entity or nursing care facility program transferring ownership to another entity.

(3) "Transferee" is the entity receiving ownership of the nursing care facility program from another entity.

(4) "Independent analysis" referred to in Subsection 26-18-503(5)(b) means an analysis performed by independent third-party certified public accountants in accordance with generally accepted accounting principles.

 

R414-27-3. Medicaid Certification Subsequent to CHOW.

(1) The Division of Medicaid and Health Financing (DMHF) may not process an enrollment application for the transferee until the transferor has voided all claims for services on or after the effective date of the CHOW.

(2) A transferor shall settle any outstanding amounts it owes to Medicaid within 30 days of Medicaid enrollment by the transferee. If the transferor fails to return any outstanding amounts as required in Subsection R414-27-3(2):

(a) The transferor shall be subject to a penalty of the greater of $50 or 5 percent of the outstanding amount;

(b) Interest shall also be accrued at a rate of 12 percent annually on any outstanding amount and shall be accrued beginning on the 31st day following the effective date of the CHOW;

(c) DMHF may waive the imposition of a penalty for good cause.

(3) The transferee shall:

(a) Once a provisional license is issued, submit the following to the DMHF Provider Enrollment team in a timely manner:

(i) A provider enrollment application; and

(ii) A copy of the provisional license.

(b) Be enrolled in Medicaid as a new provider before submitting claims.

(4) If the transferee seeks Medicare certification and the Medicare certification date is different than the issued provisional license or Medicaid enrollment effective begin date, then the Medicaid enrollment date shall be the later of the Medicare certification date or the provisional license date. If the Medicare certification date is later than the issued provisional license date, then the transferor may submit Medicaid claims up to, but not including, the Medicare certification date for the transferee in accordance with all other applicable regulations.

(5) If the transferee seeks Medicare certification, the transferee may be enrolled in Medicaid before becoming Medicare-certified provided the transferee is an approved provider, in accordance with 42 CFR 455, Subpart E.

 

KEY: Medicaid

Date of Enactment or Last Substantive Amendment: [May 12, 2009]2017

Notice of Continuation: January 9, 2013

Authorizing, and Implemented or Interpreted Law: 26-1-5; 26-18-3; 26-18-503