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CMS Rule Expands Long-Term Care Facility Administrators’ Responsibility to Report Facility Closures

Posted By Jason Greis On March 2, 2011 @ 10:11 pm In Articles | Comments Disabled

On February 18, 2011, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule (Interim Rule) implementing Section 6113 of the Patient Protection and Affordable Care Act (PPACA).  The Interim Rule, which becomes effective March 23, 2011, requires administrators of long-term care facilities (LTCF), including skilled nursing facilities (SNF) eligible for reimbursement under Medicare and nursing facilities (NF) eligible for reimbursement under Medicaid, to submit prior written notification of an impending LTCF closure to the Secretary of the U.S. Department of Health and Human Services (Secretary), the state’s long-term care ombudsman and residents of the facility and their legal representatives or other responsible parties.  LTCF administrators that do not comply with the new notice requirements may face sanctions, including civil monetary penalties of up to $100,000 and exclusion from participation in Federal health care programs.  In addition, LTCFs must have related policies in place to avoid being cited for survey deficiencies.

1.         Notification of Facility Closure

Prior to promulgation of the Interim Rule, Federal regulations did not require LTCFs to notify Federal or state agencies prior to an LTCF closure, even though many states have such notice requirements.  The Interim Rule, however, requires written notice to be submitted sixty days prior to the date of closure of a LTCF, or, in the case of termination of a LTCF from participation in Medicare and/or Medicaid, not later than the date specified by the Secretary. 

Moreover, LTCF’s should note that the Interim Rule places the responsibility for complying with this notice requirement squarely on an LTCF’s administrator.  The Interim Rule establishes minimum penalties for failure to comply with the notice requirement of $500 for the first offense, $1,500 for the second offense, and $3,000 for the third offense, but CMS suggests that higher penalties (up to $100,000) may be applied based on criteria it identifies in interpretative guidelines.  The Interim Rule does not specify under what circumstances a LTCF administrator would face exclusion from Federal health care programs as a result of failing to comply with the notice requirements.  CMS also notes that any sanctions levied against an administrator would also be reviewed by the State’s licensing agency for possible disciplinary action proceedings against an administrator.

2.         Relocation of Residents

The Interim Rule also requires an LTCF administrator to provide, along with the written notice of facility closure discussed above, a plan for the transfer and adequate relocation of facility residents.  The plan must be pre-approved by the State and “include sufficient detail to clearly identify the steps the facility would take, and the individual responsible for ensuring the steps are successfully carried out.”  The Interim Rule provides several examples of elements that an adequate plan might include.

PPACA Section 6113 also requires states to ensure that prior to a LTCF closure, all facility residents have been successfully relocated to another facility or an alternative home and community-based setting.  CMS intends to implement this statutory requirement through sub-regulatory guidance to be published in the State Operations Manual (SOM) as interpretive guidance for surveyors.

3.         Other Important Provisions in the Interim Rule

The Interim Rule includes other provisions related to the implementation of Section 6113 of PPACA, including:

  • LTCF administrators must ensure that no new patients are admitted to the facility on or after the date on which written notification of facility closure is submitted to the Secretary and the other necessary parties;
  • LTCFs must implement policies and procedures to ensure an administrator’s duties and responsibilities involve providing appropriate closure notices and complying with other relevant requirements of Section 6113 of PPACA.  Failure to adopt such policies may result in citation of an LTCF during the survey process; and
  • CMS establishes appeal rights for LTCF administrator sanctions for noncompliance with these new regulatory requirements.

4.         Key Dates and Considerations

While the effective date of the Interim Rule is March 23, 2011, CMS will accept comments on the Interim Rule through April 19, 2011.  Please contact one of the attorneys below if you need assistance implementing written policies and procedures, if you have questions regarding the Interim Rule or if you are considering submitting written comments regarding the Interim Rule to CMS.

Joseph J. Hylak-Reinholtz

Jason S. Greis

R. Brent Rawlings

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