Bill Analysis

Legislative Service Commission

LSC Analysis of House Bill

Am. Sub. H.B. 398

128th General Assembly

(As Passed by the General Assembly)

 

Reps.     Newcomb and Lehner, Harwood, Derickson, Domenick, Grossman, Garland, Hagan, Evans, Snitchler, Phillips, B. Williams, Dyer, Fende, Wachtmann, Ruhl, Hackett, Letson, Stebelton, Harris, Bubp, Hottinger, Stautberg, Pillich, Murray, Driehaus, Brown, McClain, Weddington, Mallory, Goyal, Baker, Blessing, Dolan, Yuko, Okey, Foley, R. Adams, Amstutz, Bacon, Balderson, Batchelder, Beck, Belcher, Boose, Boyd, Burke, Carney, Celeste, Chandler, Combs, Daniels, DeBose, DeGeeter, Gardner, Gerberry, Goodwin, Hall, Heard, Hite, Koziura, Luckie, Lundy, Maag, Martin, Mecklenborg, Moran, Morgan, Oelslager, Otterman, Patten, Pryor, Reece, Sayre, Sears, Skindell, Slesnick, Stewart, Szollosi, Uecker, Walter, Winburn, Zehringer

Sens.     Carey, D. Miller, Sawyer, Kearney, Buehrer, Cafaro, Gibbs, Gillmor, Grendell, Harris, Hughes, R. Miller, Morano, Schaffer, Seitz, Fedor, Turner

Effective date:  August 31, 2010

ACT SUMMARY

HOME FIRST

·         Permits individuals to qualify for enrollment in the PASSPORT, Assisted Living, and PACE programs through the Home First process without first having been admitted to a nursing facility.

·         Requires the Ohio Department of Aging (ODA) to establish a unified waiting list for the PASSPORT, Assisted Living, PACE, and Choices programs and restricts placement on the waiting list to individuals eligible for one of those programs.

·         Eliminates a requirement that ODA approve an individual's enrollment in the PASSPORT program through the Home First process even though the individual's enrollment causes the program's enrollment to exceed the limit that would otherwise apply.

·         Revises the law governing cash transfers and expenditure authorizations regarding Home First for fiscal years 2010 and 2011.

·         Requires the Director of Budget and Management, during fiscal years 2012 and 2013, to make a cash transfer in support of Home First.

COLLECTION OF LONG-TERM CARE FACILITIES' MEDICAID DEBTS

·         Revises the law governing the collection of a nursing facility's or ICF/MRʹs Medicaid debt when the nursing facility or ICF/MR undergoes a change of operator, closes, or ceases to participate in the Medicaid program.

CERTIFICATE OF NEED

·         Requires the Director of Health to accept, until December 31, 2010, certificate of need applications for an increase of up to 15 beds in an existing nursing home located in a county with a population of 1 million to 1.1 million if the increase is attributable solely to a relocation of long-term care beds from an existing hospital located in a contiguous county with a population of 40,000 to 45,000.

·         Revises circumstances under which the Director of Health is to deny a certificate of need for the addition of long-term care beds to an existing health care facility or for the development of a new health care facility.

TABLE OF CONTENTS

HOME FIRST.. 3

Background. 3

Overview.. 3

Unified waiting list 4

PASSPORT. 5

Assisted Living. 6

PACE.. 7

Cash transfers and spending authorizations. 8

Fiscal years 2010 and 2011. 8

Fiscal years 2012 and 2013. 10

 

COLLECTION OF LONG-TERM CARE FACILITY MEDICAID DEBTS.. 10

Background. 10

Estimate of Medicaid debt 10

Withholding. 11

Determination of actual Medicaid debt 14

Release of withholding. 16

Medicaid Payment Withholding Fund. 17

 

CERTIFICATE OF NEED.. 17

Background. 17

Certificate of need to relocate beds between contiguous counties. 17

Reasons for denying a certificate of need. 18

CONTENT AND OPERATION

HOME FIRST

Background

Ohio's Medicaid program includes components under which eligible individuals receive home and community-based services in lieu of services in a nursing home (referred to in Medicaid law as a nursing facility).  The components are authorized by federal waivers granted by the United States Department of Health and Human Services.  One of these components is the PASSPORT program, which serves eligible Medicaid recipients age 60 or older.  Another is the Assisted Living program, which permits eligible Medicaid recipients to reside in a residential care facility (the statutory term for assisted living facility) rather than continue or begin to reside in a nursing facility.  The Ohio Department of Aging (ODA) administers both components pursuant to an interagency agreement with the Ohio Department of Job and Family Services (ODJFS).

Ohio's Medicaid program also includes a component known as the Program of All‐inclusive Care for the Elderly (PACE).  Persons enrolled in PACE receive medical services covered by PACE through a comprehensive, multidisciplinary health and social services delivery system that integrates acute and long‐term services pursuant to federal regulations.  To be eligible for PACE, a Medicaid recipient must (1) be at least age 55, (2) require the level of care required by Ohioʹs Medicaid program for coverage of nursing facility services, (3) reside in an area of Ohio in which PACE is available, and (4) meet other eligibility requirements.  PACE is available in two areas of Ohio.  One area is comprised of Cuyahoga County; the other is comprised of Hamilton County and parts of Warren, Butler, and Clermont counties.  ODA is responsible for the day‐to‐day administration of PACE pursuant to an agreement with ODJFS.

Prior law established a process under which an individual on a waiting list for the PASSPORT, Assisted Living, or PACE program could be enrolled in the program for which the individual qualified following admission to a nursing facility.  This process was popularly, but not statutorily, known as Home First.

Overview

The act revises the law governing Home First for the PASSPORT, Assisted Living, and PACE programs, including by expressly using the phrase "Home First" in statute and permitting individuals to qualify for enrollment in the programs through Home First without first having been admitted to a nursing facility.[1]  The act also requires ODA to establish a unified waiting list for components of the Medicaid program that ODA administers.  Only individuals who are on the unified waiting list and meet other requirements are to be enrolled in the PASSPORT, Assisted Living, or PACE program through the Home First process.

Unified waiting list

(R.C. 173.404)

ODA is required by the act to establish a unified waiting list for the following components of the Medicaid program that ODA administers:

(1)  The PASSPORT program;

(2)  The Assisted Living program;

(3)  The PACE program;

(4)  The Choices program.[2]

The act provides that only individuals eligible for one of those Medicaid components may be placed on the unified waiting list.

PASSPORT

(R.C. 173.401)

Prior law required the ODJFS Director to submit to the U.S. Secretary of Health and Human Services an amendment to the federal waiver authorizing the PASSPORT program seeking authorization for additional enrollments in the PASSPORT program pursuant to the Home First process.  Beginning with the month following the month in which the waiver amendment was approved and each month thereafter, each area agency on aging was required to determine whether individuals residing in the area the agency serves who are on a waiting list for the PASSPORT program were admitted to a nursing facility.  If an area agency on aging determined that such an individual was admitted to a nursing facility, the agency was required to notify the local administrator of the Long-Term Care Consultation Program serving the area in which the individual resided about the determination.  The local administrator was required to determine whether the PASSPORT program was appropriate for the individual and whether the individual would rather participate in the PASSPORT program than continue residing in the nursing facility.  The local administrator was required to notify ODA if the determination was affirmative.

Prior law required ODA, on receipt of the local administrator's notice, to approve the individual's enrollment in the PASSPORT program regardless of the program's waiting list and even though the individual's enrollment caused the program's enrollment to exceed the limit that would otherwise apply.

The act removes the provision under which Home First was limited to individuals on a PASSPORT program waiting list who had been admitted to a nursing facility.  Under the act, an individual qualifies for Home First under the PASSPORT program if the individual is eligible for the PASSPORT program, is on ODA's unified waiting list, and any of the following apply:

(1)  The individual has been admitted to a nursing facility;

(2)  A physician determines and documents in writing that the individual has a medical condition that, unless the individual is enrolled in home and community-based services such as the PASSPORT program, will require the individual to be admitted to a nursing facility within 30 days of the physician's determination;

(3)  The individual has been hospitalized and a physician determines and documents in writing that, unless the individual is enrolled in home and community-based services such as the PASSPORT program, the individual is to be transported directly from the hospital to a nursing facility and admitted;

(4)  The individual is the subject of a report regarding abuse, neglect, or exploitation of an adult (over age 60) or the individual has made a request to a county department of job and family services for adult protective services and a county department and area agency on aging jointly document in writing that, unless the individual is enrolled in home and community-based services such as the PASSPORT program, the individual should be admitted to a nursing facility.

The act requires each area agency on aging to identify individuals residing in the area the agency serves who are eligible for Home First.  If an area agency on aging determines that an individual is eligible, it must notify the local Long-Term Care Consultation Program administrator.  As under prior law, the local administrator must determine whether the PASSPORT program is appropriate for the individual and whether the individual would rather participate in that program than continue or begin to reside in a nursing facility.  The local administrator is required to notify ODA if the determination is affirmative.

The act eliminates the requirement that the ODJFS Director submit an amendment to the federal PASSPORT waiver to authorize additional enrollments in the PASSPORT program pursuant to the Home First process.  The act also eliminates the requirement that ODA approve an individual's enrollment in the PASSPORT program through the Home First process even though the individual's enrollment causes the program's enrollment to exceed the limit that would otherwise apply.  Instead, the act provides that ODA is to approve an individual's enrollment through the Home First process unless the enrollment would cause the PASSPORT program to exceed any limit on the number of individuals who may be enrolled in the program as set by the U.S. Secretary of Health and Human Services in the federal waiver authorizing the PASSPORT program.

Assisted Living

(R.C. 5111.894)

Prior law expressly authorized ODA, as the state agency that administers the Assisted Living program, to establish one or more waiting lists for the program and restricted the waiting list to individuals eligible for Medicaid.  The act eliminates ODA's authority to establish waiting lists specific to the Assisted Living program and instead applies ODA's unified waiting list to the Home First process for the Assisted Living program.

As it does with the PASSPORT program, the act expands eligibility for the Assisted Living program's Home First component so that an individual on a waiting list does not have to have been admitted to a nursing facility to be enrolled in the Assisted Living program through the Home First process.  The act establishes the same new criteria under which individuals eligible for the Assisted Living program and on ODA's unified waiting list may be enrolled in the program through the Home First component that it establishes for the PASSPORT program, but with one additional criterion.  The additional criterion is that the individual has resided in a residential care facility for at least six months immediately before applying for the Assisted Living program and is at risk of imminent admission to a nursing facility because the costs of residing in the residential care facility have depleted the individual's resources such that the individual is unable to continue to afford the residential care facility.

Under the act, the Assisted Living program's Home First process is similar to the Home First process for the PASSPORT program.  As under PASSPORT, the Assisted Living program's Home First process conditions ODA's enrollment of an individual in the Assisted Living program on the enrollment not causing the program's enrollment to exceed any limit on the number of individuals who may participate in the program as set by the U.S. Secretary of Health and Human Services when the federal waiver authorizing the program was approved.  A difference is that an area agency on aging, as part of the Assisted Living program's Home First process, is required by continuing law to determine whether there is a vacancy in a residential care facility participating in the program that is acceptable to the individual seeking enrollment in the program.

PACE

(R.C. 173.501)

The act revises the Home First process for the PACE program in a manner similar to its revisions to the PASSPORT and Assisted Living programs' Home First processes.  Eligibility for the PACE program's Home First process is no longer limited to individuals on a waiting list for the PACE program who are admitted to a nursing facility.  Instead, the act establishes the same new criteria under which individuals eligible for the PACE program and on ODA's unified waiting list may be enrolled in the PACE program through the Home First process that it establishes for the PASSPORT program.[3]

Under the act, the PACE program's Home First process is similar to the Home First process for the PASSPORT and Assisted Living programs.  There are differences, though.  Under the PACE program's Home First process, ODA, rather than an area agency on aging, is to identify individuals eligible for the program's Home First process.  Another difference is that a PACE provider, rather than a Long-Term Care Consultation Program administrator, is to determine whether the program is appropriate for an individual and whether the individual would rather participate in the PACE program than reside in a nursing facility.  Enrollment in the PACE program through the Home First process is to be done in accordance with priorities established in ODA rules.

Cash transfers and spending authorizations

(Sections 3, 4, and 5)

Fiscal years 2010 and 2011

Law retained in part by the act permits the Director of the Office of Budget and Management (OBM) to transfer cash on a quarterly basis during fiscal years 2010 and 2011 from the Nursing Facility Stabilization Fund[4] to the PASSPORT/Residential State Supplement Fund[5] on receipt of certified expenditures related to state law governing Home First for the PASSPORT and Assisted Living programs and for the Residential State Supplement program.[6]  The act provides for the OBM Director to consult with the ODA and ODJFS Directors regarding the cash transfers and removes the provision providing for the transfers to be done on a quarterly basis.  Also, the act authorizes the cash transfers on receipt of certified expenditures related to state law governing Home First for the PACE program.

Under law retained in part by the act, the ODA Director may request that the OBM Director authorize expenditures from the PASSPORT Fund[7] in excess of the amount appropriated if receipts credited to the fund exceed the amounts appropriated from it.  The ODJFS Director is permitted to request that the OBM Director authorize expenditures from the Interagency Reimbursement Fund[8] in excess of the amounts appropriated if receipts credited to the fund exceed the amounts appropriated from it.  The OBM Director is permitted to make the expenditure authorizations on a quarterly basis in fiscal years 2010 and 2011 on receipt of certified expenditures related to state law governing Home First for the PASSPORT, Assisted Living, and Residential State Supplement programs.  The act permits the OBM Director to authorize the expenditures without a request from the ODA or ODJFS Director.  The OBM Director, though, is to consult with the Directors with regard to the authorizations.  The act provides that the authorizations may also be made on receipt of certified expenditures related to state law governing Home First for the PACE program.  The act eliminates the requirement that the authorizations be done on a quarterly basis.

The Executive Director of the Executive Medicaid Management Administration (EMMA) is required by the act to prepare reports regarding the cash transfers in fiscal years 2010 and 2011 discussed above.  A report is to be made not later than 30 days after the OBM Director receives certification of expenditures related to the Home First process for the PASSPORT, Assisted Living, PACE, and Residential State Supplement programs.  The following information is to be included in a report:

(1)  A description and documentation of the criteria and data that ODA, ODJFS, and OBM use to justify a cash transfer, including spending and utilization trends for the PASSPORT, Assisted Living, and PACE programs and nursing facility services;

(2)  The descriptions and documents of the criteria and data used to justify such transfers that previously occurred during fiscal years 2010 and 2011.

The act requires the ODA, ODJFS, and OBM Directors to provide the EMMA Executive Director with all information needed to prepare the reports.  Each report is to be submitted to the General Assembly, specifically including the chairs and ranking minority members of the committees of the House of Representatives and Senate to which the biennial budget bill is referred.[9]

Fiscal years 2012 and 2013

The act requires the OBM Director, during fiscal years 2012 and 2013 and on receipt of certified expenditures related to Home First for the PASSPORT, Assisted Living, PACE, and Residential State Supplement programs, to transfer cash from the Nursing Facility Stabilization Fund to the PASSPORT/Residential State Supplement Fund.  The ODA Director is required, if receipts credited to the PASSPORT Fund exceed the amounts appropriated from the fund in fiscal years 2012 and 2013, to request that the OBM Director authorize expenditures from the fund in excess of the amounts appropriated.  The ODJFS Director is required, if receipts credited to the Interagency Reimbursement Fund exceed the amounts appropriated from the fund in fiscal years 2012 and 2013, to request that the OBM Director authorize expenditures from the fund in excess of the amounts appropriated.

COLLECTION OF LONG-TERM CARE FACILITY MEDICAID DEBTS

Background

Continuing law establishes requirements for a nursing facility or intermediate care facility for the mentally retarded (ICF/MR) that undergoes a change of operator,[10] facility closure,[11] voluntary termination,[12] or voluntary withdrawal of participation.[13]  The requirements concern state collection of debts a nursing facility or ICF/MR owes under the Medicaid program.

Estimate of Medicaid debt

(R.C. 5111.68 (primary) and 5111.65)

Continuing law requires an operator to notify the ODJFS of an impending change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation.[14]  On receipt of the notice, ODJFS must determine the amount of any overpayments made under the Medicaid program to the operator, including overpayments the operator disputes, and other actual and potential debts the operator owes or may owe under the Medicaid program.[15]  The act specifies that ODJFS is to estimate, rather than determine, this amount and provides that the amount of the estimated debt includes any franchise permit fee[16] the operator owes or may owe under the Medicaid program.  ODJFS is required by the act to use a debt estimation methodology in estimating the operatorʹs actual and potential Medicaid debts.  The debt estimation methodology is to be established in rules.  The act eliminates a requirement that ODJFS, if it is unable to determine the amount of Medicaid debts for any period of time before the effective date of the new providerʹs Medicaid provider agreement in the case of a change of operator or the effective date of a facility closure, voluntary termination, or voluntary withdrawal of participation, make a reasonable estimate of the Medicaid debts for the period using information available to ODJFS, including prior determinations of Medicaid debts.

ODJFS is required by the act to provide the operator written notice of ODJFSʹs estimate of the operatorʹs Medicaid debt not later than 30 days after ODJFS receives the notice of the change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation.  The notice must include the basis for the estimate.

Withholding

(R.C. 5111.681 (primary) and 5111.65)

Prior law generally required that ODJFS withhold a specified amount from payment due the operator under the Medicaid program. The act permits, rather than requires, ODJFS to make the withholding, changes the amount to be withheld, eliminates an exception to the withholding requirement, and creates new circumstances under which the withholding is not to occur or is to be reduced.

Prior law required ODJFS to withhold the greater of (1) the total amount of any overpayments made under the Medicaid program to the operator, including overpayments the operator disputed, and other actual and potential debts, including unpaid penalties, the operator owed or might have owed under the Medicaid program and (2) an amount equal to the average amount of monthly payments to the operator under the Medicaid program for the 12‐month period immediately preceding the month that included the last day the operatorʹs Medicaid provider agreement was in effect or, in the case of a voluntary withdrawal of participation, the effective date of the voluntary withdrawal of participation.  The act provides instead for the withholding to equal the total amount of the operatorʹs Medicaid debt as specified in the notice the act requires ODJFS to provide the operator.

Prior law permitted ODJFS to choose not to make the withholding in the case of a change of operator if the new operator (1) entered into a nontransferable, unconditional, written agreement with ODJFS to pay ODJFS the former operatorʹs Medicaid debt and (2) provided ODJFS a copy of the new operatorʹs balance sheet that assisted ODJFS in determining whether to make the withholding.  The act eliminates this provision and establishes circumstances applicable to a change of operator under which the withholding is not to occur or is to be reduced and circumstances applicable to a facility closure, voluntary termination, or voluntary withdrawal of participation under which the withholding is not to occur or is to be reduced.

Some of the circumstances under which a withholding is not to occur or is to be reduced involve an affiliated operator.  ʺAffiliated operatorʺ is defined by the act as a nursing facility or ICF/MR operator affiliated with either the former operator for whom the affiliated operator is to assume liability for all or part of the former operatorʹs Medicaid debt or the new operator involved in a change of operator with the former operator.

In the case of a change of operator, the act provides that ODJFS is not to make the withholding if the former operator, the new operator, or an affiliated operator executes a successor liability agreement meeting requirements the act establishes and the liability agreement provides for the former, new, or affiliated operator to assume liability for the total, actual amount of the former operatorʹs Medicaid debt as determined by ODJFS.  ODJFS is to reduce the amount of the withholding if the former, new, or affiliated operator executes such a successor liability agreement to assume liability for the portion of the former operatorʹs Medicaid debt that represents the franchise permit fee the former operator owes.  The amount of the reduction is to at least equal the former operator's franchise permit fee debt.

In the case of a facility closure, voluntary termination, or voluntary withdrawal of participation, the act provides that ODJFS is not to make the withholding if the former operator or an affiliated operator executes a successor liability agreement meeting requirements the act establishes and the successor liability agreement provides for the former operator or affiliated operator to assume liability for the total, actual amount of the former operatorʹs Medicaid debt.  ODJFS is to reduce the amount of the withholding if the former operator or affiliated operator executes such a successor liability agreement to assume liability for the portion of the former operatorʹs Medicaid debt that represents the franchise permit fee the former operator owes.  The amount of the reduction is to at least equal the former operator's franchise permit fee debt.

The act establishes two conditions that must be met for a former operator or affiliated operator to be able to execute a successor liability agreement.  First, the former operator or affiliated operator must have one or more valid Medicaid provider agreements, other than the Medicaid provider agreement for the nursing facility or ICF/MR that is the subject of the change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation.  Second, during the 12-month period preceding the month in which ODJFS receives notice of the change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation, the average monthly Medicaid payment made to the former operator or affiliated operator pursuant to the former operator's or affiliated operator's one or more Medicaid provider agreements (other than the Medicaid provider agreement for the nursing facility or ICF/MR that is the subject of the change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation) must equal at least 90% of the sum of the following:

(1)  The average monthly Medicaid payment made to the former operator pursuant to the former operator's Medicaid provider agreement for the nursing facility or ICF/MR that is the subject of the change of operator, facility closure, voluntary termination, or voluntary withdrawal of participation;

(2)  If the former operator or affiliated operator has assumed liability under one or more other successor liability agreements, the total amount for which the former operator or affiliated operator has assumed liability under the other successor liability agreements;

(3)  If the former operator or affiliated operator has not assumed liability under any other successor liability agreements, zero.

The act establishes the following as requirements a successor liability agreement must meet:

(1)  It must provide for the operator who executes the successor liability agreement to assume liability for either the total, actual amount of the former operator's Medicaid debt or the portion of that amount that represents the franchise permit fee the former operator owes.

(2)  It may not require the operator who executes the successor liability agreement to furnish a surety bond.

(3)  It must provide that ODJFS, after determining the actual amount of the former operator's Medicaid debt, may deduct, from Medicaid payments made to the operator who executes the successor liability agreement, the lesser of the total, actual amount of the former operator's Medicaid debt or the amount for which the operator who executes the successor liability agreement assumes liability under the agreement.

(4)  It must provide that the deductions from Medicaid payments made to the operator who executes the successor liability agreement are to be made for a number of months, not to exceed six, agreed to by that operator and ODJFS or, if that operator and ODJFS cannot agree on a number of months that is less than six, a greater number of months determined by the Attorney General pursuant to a claims collection process authorized by state law.

(5)  It must provide that, if the Attorney General determines the number of months for which the deductions are to be made, the operator who executes the successor liability agreement must pay, in addition to the amount collected pursuant to the Attorney General's claims collection process, the part of the amount so collected that, if not for the act, would be required to be paid into the Attorney General Claims Fund.

The fifth requirement for successor liability agreements concerns a provision of law generally retained by the act that requires that up to 11% of all amounts collected by the Attorney General on claims due the state be deposited into the Attorney General Claims Fund.  The act requires that the entire amount that the Attorney General collects under a successor liability agreement, excluding the additional amount collected pursuant to the fifth requirement for successor liability agreements, be paid to ODJFS for deposit into the appropriate fund (rather than have up to 11% of that amount be deposited into the Attorney General Claims Fund).  The additional amount collected pursuant to the fifth requirement for successor liability agreements is to be deposited into the Attorney General Claims Fund.

The act provides that execution of a successor liability agreement does not waive a former operator's right to contest the ODJFS estimate of the operatorʹs Medicaid debt. 

Determination of actual Medicaid debt

(R.C. 5111.685)

Continuing law requires ODJFS to determine the actual amount of an operatorʹs Medicaid debt by completing all final fiscal audits not already completed and performing all other appropriate actions ODJFS determines to be necessary.  Prior law required ODJFS to issue a debt summary report not later than 90 days after the operator filed a properly completed cost report with ODJFS or, if ODJFS waived the requirement for the operator to file a cost report, 90 days after the date ODJFS waived the cost report requirement.  The act provides for this report to be issued as an initial debt summary report and reduces the number of days ODJFS has to issue it to 60 days following the date the operator files a properly completed cost report or ODJFS waives the cost report requirement.

Under the act, an initial debt summary report becomes the final debt summary report 31 days after ODJFS issues the initial debt summary report unless the operator, or an affiliated operator who executes a successor liability agreement, requests a review before that date.  A review may be requested to contest any of ODJFS's findings included in the initial debt summary report.  The request for a review must be submitted to ODJFS not later than 30 days after ODJFS issues the initial debt summary report.  ODJFS is required to conduct the review on receipt of a timely request and issue a revised debt summary report.  If ODJFS has withheld money from payment due the operator, ODJFS is required to issue the revised debt summary report not later than 90 days after the date ODJFS receives the request for the review unless ODJFS and the operator or affiliated operator agree to a later date.  The operator and affiliated operator are permitted to submit information to ODJFS explaining what the operator or affiliated operator contests before and during the review.  This may include documentation of the amount of any debt ODJFS owes the operator or affiliated operator.  The operator and affiliated operator are also permitted to submit additional information to ODJFS not later than 30 days after ODJFS issues the revised debt summary report.  The act provides that the revised debt summary report becomes the final debt summary report 31 days after ODJFS issues the revised debt summary report unless the operator or affiliated operator timely submits additional information to ODJFS.  If additional information is timely submitted, ODJFS is required to consider the additional information and issue a final debt summary report not later than 60 days after ODJFS issues the revised debt summary report unless ODJFS and the operator or affiliated operator agree to a later date.

Continuing law requires the report that the act names the initial debt summary report to include ODJFS's findings and the amount of the operator's Medicaid debt.  The act retains this requirement for each initial debt summary report and requires that each revised and final debt summary report include the information.  The act also requires that ODJFS explain its findings and determination in each debt summary report.

Prior law provided that only the parts of a debt summary report that were subject to an adjudication under another provision of state Medicaid law were subject to an adjudication under the Administrative Procedure Act (R.C. Chapter 119.).[17]  The act provides instead that the operator, and an affiliated operator who executes a successor liability agreement, may request an adjudication regarding a finding in a final debt summary report that pertains to an audit or alleged overpayment made under the Medicaid program to the operator.  The request is to be made in accordance with the Administrative Procedure Act.  The adjudication must be consolidated with any other uncompleted adjudication that concerns a matter addressed in the final debt summary report.

Release of withholding

(R.C. 5111.686)

Prior law required ODJFS to release the amounts ODJFS withheld from an operator, less any amount the operator owed under the Medicaid program, according to the following deadlines:

(1)  If ODJFS failed to issue a debt summary report within the required time, 91 days after the date the operator filed a properly completed cost report or the date ODJFS waived the cost report requirement;

(2)  If ODJFS issued the debt summary report within the required time, not later than 30 days after the operator agreed to a final fiscal audit resulting from the debt summary report.

The act revises the deadlines for ODJFS to release the amount of the withholding that is to be released.  The following are the actʹs deadlines:

(1)  If ODJFS fails to issue the initial debt summary report within the required time, 61 days after the date the operator files the properly completed cost report or ODJFS waives the cost report requirement;

(2)  If ODJFS issues the initial debt summary report within the required time, not later than the following:

(a)  Thirty days after the deadline for requesting an adjudication regarding the final debt summary report if the operator and an affiliated operator who executes a successor liability agreement fail to request the adjudication on or before the deadline;

(b)  Thirty days after the completion of an adjudication of the final debt summary report if the operator or an affiliated operator who executes a successor liability agreement requests the adjudication on or before the deadline.

Medicaid Payment Withholding Fund

(R.C. 5111.688 (primary), 5111.651, 5111.689, 5111.874, and 5111.875)

The act requires that all amounts withheld from an operator be deposited into the pre-existing Medicaid Payment Withholding Fund.  Money in the fund is to be used to pay an operator when a withholding is released and to pay ODJFS and the federal government the amount an operator owes under the Medicaid program.  Amounts paid to ODJFS or the federal government from the fund are to be deposited into the appropriate ODJFS fund.

CERTIFICATE OF NEED

Background

Continuing law prohibits anyone from carrying out a "reviewable activity" for which a certificate of need (CON) is required until the Director of Health has granted the CON.[18]  In general, reviewable activities include constructing, replacing, and renovating long-term care facilities.  Long-term care facilities are nursing homes, skilled nursing facilities, nursing facilities, and the portions of hospitals that contain beds registered with the Department of Health as skilled nursing beds or long-term care beds.[19]

Certificate of need to relocate beds between contiguous counties

(Section 6)

The act requires the Director of Health to accept for review, until December 31, 2010, CON applications for an increase of up to 15 beds in an existing nursing home located in a county that has a population of at least 1 million and not more than 1.1 million.  The beds being added to the nursing facility must be long-term care beds being moved from an existing hospital located in a county that has a population of at least 40,000 but not more than 45,000 and is contiguous to the county in which the nursing facility is located.  The beds being relocated must be proposed for nursing home licensure.  The county from which the beds are relocated must continue to have existing nursing home, county home, or hospital long-term care beds after the relocation.

The act prohibits the Director, in reviewing CON applications for relocating long-term care beds under the circumstances described above, from denying a CON on the grounds that the existing hospital from which the beds are to be relocated either (1) is not providing services in all or part of the long-term care beds at the hospital or (2) has not provided services in all or part of the beds for at least 365 days within the 24 months immediately preceding the date the CON application is filed with the Director.[20]

Reasons for denying a certificate of need

(R.C. 3702.59 (primary) and 3702.51)

Continuing law specifies circumstances under which the Director of Health is to deny a CON for the addition of long-term care beds to an existing health care facility or for the development of a new health care facility.  For example, the Director must deny a CON if the existing health care facility in which the beds are being placed has one or more waivers for Life Safety Code deficiencies, one or more State Fire Code violations, or one or more State Building Code violations and the project identified in the CON application does not propose to correct all of the deficiencies and violations.  The act does not change this provision, but it revises the other circumstances for denying such a CON that are specified in continuing law.

Some of the act's revisions concern a principal participant, which the act defines as (1) a person who has an ownership or controlling interest of at least 5% in the entity that applies for the CON, in a health care facility that is the subject of a CON application, or in the owner or operator of the applicant or such a facility and (2) an officer, director, trustee, or general partner of an applicant, of a health care facility that is the subject of a CON application, or of the owner or operator of the applicant or such a facility.  Other revisions concern deficiencies that constitute actual harm but not immediate jeopardy and deficiencies that constitute immediate jeopardy.  The act defines "actual harm but not immediate jeopardy deficiency" as a deficiency that, under federal regulations, either constitutes a pattern of deficiencies resulting in actual harm that is not immediate jeopardy or represents widespread deficiencies resulting in actual harm that is not immediate jeopardy.  "Immediate jeopardy deficiency" is defined by the act as a deficiency that, under federal regulations, either constitutes a pattern of deficiencies resulting in immediate jeopardy to resident health or safety or represents widespread deficiencies resulting in immediate jeopardy to resident health or safety.

Under law generally retained by the act, the Director is to deny a CON if, during the 60-month period preceding the filing of the application, a notice of proposed license revocation was issued for the existing health care facility in which the beds are being placed or a nursing home owned or operated by the applicant or the corporation or other business that operates or seeks to operate the health care facility in which the beds are being placed.  With regard to a corporation or other business that operates or seeks to operate the health care facility in which the beds are being placed, the act provides instead that a CON is to be denied if, during the 60-month period, a notice of proposed license revocation was issued for a nursing home owned or operated by a principal participant.

The Director is required by continuing law[21] to deny a CON if, during the period that precedes the filing of the application and is encompassed by the three most recent standard surveys of the existing health care facility in which the beds are being placed, either of the following occurred:

(1)  The facility was cited on three or more separate occasions for final, nonappealable actual harm but not immediate jeopardy deficiencies.

(2)  The facility was cited on two or more separate occasions for final, nonappealable immediate jeopardy deficiencies.

The act also requires the Director to deny a CON if, during that period, the facility was cited on two separate occasions for final, nonappealable actual harm but not immediate jeopardy deficiencies and on one occasion for a final, nonappealable immediate jeopardy deficiency.

Law generally retained by the act requires the Director to deny a CON if more than two nursing homes operated in Ohio by the applicant or the person who operates the facility in which the beds are being placed or, if the applicant or person operates more than 20 nursing homes in Ohio, more than 10% of those nursing homes, were each cited during the period that precedes the filing of the CON application and is encompassed by the three most recent standard surveys of the nursing homes that were so cited in either of the following manners:

(1)  On three or more separate occasions for final, nonappealable actual harm but not immediate jeopardy deficiencies;

(2)  On two or more separate occasions for final, nonappealable immediate jeopardy deficiencies.

Under the act, the CON is to be denied under these circumstances also if the applicant or a principal participant, rather than the person who operates the facility in which the beds are being placed, owns or operates, rather than just operates, the nursing homes so cited and if the nursing homes were cited on two separate occasions for final, nonappealable actual harm but not immediate jeopardy deficiencies and on one occasion for a final, nonappealable immediate jeopardy deficiency.

Law retained in part by the act prohibits the Director, when applying the reasons discussed above for which a CON must be denied, from considering deficiencies cited before the current operator began to operate the health care facility at which the deficiencies were cited.  The Director is permitted to disregard deficiencies cited after the health care facility was acquired by the current operator if the deficiencies were attributable to circumstances that arose under the previous operator and the current operator has implemented measures to alleviate the circumstances.  In the case of a CON application proposing the development of a new health care facility by relocation of beds, the Director is prohibited from considering deficiencies that were solely attributable to the physical plant of the existing health care facility from which the beds are being relocated.  The act modifies these provisions to include references to violations along with deficiencies to reflect the fact that, under the act, certain of the circumstances for denying the CON concern violations.  The act also replaces references to current operators with references to applicants and principal participants to reflect the fact that, under the act, certain of the circumstances for denying a CON concern applicants and principal participants.  The act further modifies this provision by prohibiting the Director from considering deficiencies or violations cited before the applicant or a principal participant acquired or began to own or operate the health care facility at which the deficiencies or violations were cited.

The act eliminates a requirement that a CON be denied if, during the 60-month period preceding the filing of the application, the applicant has violated the law governing CON on two or more separate occasions.

HISTORY

ACTION

DATE

 

 

Introduced

12-16-09

Reported, H. Aging & Disability Services

03-10-10

Passed House (99-0)

03-24-10

Reported, S. Finance & Financial Institutions

05-12-10

Passed Senate (31-0)

05-18-10

 

 

 

10-hb398-128.docx/ks



[1] The act introduces the phrase "Home First" in statute by requiring ODA to establish a Home First component for the PASSPORT, Assisted Living, and PACE programs under which eligible individuals may be enrolled in one of the programs in accordance with the statute governing the Home First process.  (With respect to the Assisted Living program, the act requires the "state administrative agency" to establish the Home First component for the program.  This is because under continuing law, ODA's authority to administer the Assisted Living program is contingent on the Director of Budget and Management approval of the interagency agreement between ODA and ODJFS regarding the program's administration.  Had the Director rejected the interagency agreement, ODJFS would administer the Assisted Living program directly and be the state administrative agency for the program.)

[2] The Choices program provides consumer‐driven home and community‐based services to participants of the PASSPORT program.  An individual enrolled in the Choices program may choose an agency or non‐agency professional caregiver or individual provider such as a friend, neighbor, or relative (other than a spouse, parent, step‐parent, or legal guardian) to provide home and community‐based services to the individual.  (Ohio Department of Aging. Choices Home Care Waiver, available at <http://aging.ohio.gov/services/choices/>.)

[3] The additional new criterion that the act establishes for the Assisted Living program is not established for the PACE program.

[4] Continuing law requires that money in the Nursing Facility Stabilization Fund be used to make Medicaid payments to nursing facilities (R.C. 3721.561, not in the act).

[5] The PASSPORT/Residential State Supplement Fund is referred to in the Revised Code as the Home and Community-Based Services for the Aged Fund.  Continuing law requires that money in the fund be used to fund the Medicaid program, including the PASSPORT program, and the Residential State Supplement program.  (R.C. 3721.56, not in the act.)

[6] There is a Home First process for the Residential State Supplement program that is similar to the Home First process for the PASSPORT and Assisted Living programs (R.C. 173.351, not in the act).  The act does not change the law governing the Home First process for the Residential State Supplement program.

[7] Part of the money raised from pari-mutuel wagering is required to be deposited into the PASSPORT Fund and money in the fund is to be used for the PASSPORT program (R.C. 3769.08 and 3769.26, not in the act).

[8] The Interagency Reimbursement Fund, established by Am. Sub. H.B. 111 of the 118th General Assembly, is used to hold federal funds, including federal Medicaid funds, that ODJFS is to use to pay other agencies that incur costs eligible for federal reimbursement.

[9] In submitting the report to the General Assembly, the EMMA Executive Director is to provide it to the Senate President, Senate Minority Leader, Speaker of the House of Representatives, House Minority Leader, and the Director of the Legislative Service Commission (R.C. 101.68(B)).

[10] A change of operator occurs when an entering (new) operator becomes the operator of a nursing facility or ICF/MR in the place of an exiting (former) operator (R.C. 5111.65(A)).

[11] A facility closure occurs when a building, or part of a building, that houses a nursing facility or ICF/MR ceases to be used as a nursing facility or ICF/MR and all of the facilityʹs residents are relocated (R.C. 5111.65(H)).

[12] A voluntary termination occurs when an operator voluntarily elects to terminate the participation of an ICF/MR in the Medicaid program but the facility continues to provide service of the type provided by a residential facility for persons with mental retardation or a developmental disability (R.C. 5111.65(J)).

[13] A voluntary withdrawal of participation occurs when an operator voluntarily elects to terminate a nursing facilityʹs participation in the Medicaid program but the nursing facility continues to provide service of the type provided by a nursing facility (R.C. 5111.65(K)).

[14] R.C. 5111.66 and 5111.67 (not in the act).

[15] R.C. 5111.68.

[16] The franchise permit fee is a per-bed fee that is assessed on each long-term care bed in a nursing facility, ICF/MR, or hospital.  Funds generated from the fee mostly contribute to the operation of the Medicaid program, including Medicaid-funded home and community-based services.

[17] Continuing law may contain an incorrect citation regarding which parts of a debt summary report are subject to an adjudication.  Presumably what is meant are the parts of a debt summary report that pertain to (1) an audit disallowance that ODJFS makes as the result of an audit of a Medicaid cost report, (2) an adverse finding that results from an exception review of resident assessment information conducted after the effective date of a nursing facility or ICF/MRʹs Medicaid rate that is based on the assessment information, (3) a Medicaid payment deemed an overpayment, or (4) an ODJFS‐imposed penalty.

[18] R.C. 3702.53.

[19] R.C. 3702.51.

[20] The conditions specified in (1) and (2), above, are otherwise applicable to the relocation of long-term care beds.  They were established by an amendment to Ohio Administrative Code 3701-12-23.2(E), which became effective March 25, 2010.

[21] The act makes nonsubstantive, stylistic changes to these provisions.