Part 1. DEPARTMENT OF AGING AND DISABILITY SERVICES
Chapter 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION
Subchapter X. REQUIREMENTS FOR MEDICAID-CERTIFIED FACILITIES
The Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), adopts an amendment to §19.2308 in Chapter 19, governing Nursing Facility Requirements for Licensure and Medicaid Certification, without changes to the proposed text published in the December 22, 2006, issue of the Texas Register (31 TexReg 10262).
The amendment is adopted to set forth conditions under which DADS may waive placing holds on vendor payments to a nursing facility's prior owner for a change of ownership in which the prior owner and new owner are substantially the same entities. The amendment establishes in rule the procedures that are currently practiced with a successor liability agreement, which a nursing facility may complete when a change of ownership occurs. The amendment allows payments to continue to be made to owners that submit sufficient information to verify that the prior owner and new owner are substantially the same entities and, therefore, will minimize disruption of facility operations.
The amendment is also adopted to reorganize the section to better clarify the process for a change of ownership and to update agency names reflecting the consolidation of health and human services in September 2004.
DADS received written comments from the Texas Health Care Association (THCA). A summary of the comments and the responses follow.
Comment: The commenter is concerned with the conflicting interpretations within DADS, HHSC, the Texas Medicaid and Healthcare Partnership (TMHP), and the Centers for Medicare and Medicaid Services (CMS) with regard to whether a change of ownership actually is taking place in a nursing facility. The commenter would like DADS and other agencies involved to develop a uniform change of ownership process.
Response: The agency agrees with the commenter that a uniform change of ownership process is needed. DADS agrees to work with HHSC, TMHP, THCA, and other stakeholders on this issue. A preliminary project plan has been drafted, and DADS is tentatively planning to hold the first meeting in March 2007. THCA and other interested parties will receive notification when further information is available.
Comment: Concerning §19.2308(c)(2)(A) and (B), the commenter stated that the 60-day notice requirement prior to a change of ownership doesn't make recognized exceptions for situations such as foreclosure, lease termination, death, and divorce. The commenter would like DADS to consider exceptions to the 60-day requirement.
Response: DADS and HHSC are in agreement that a prescriptive list of exceptions to the 60- day notice requirement will not be included in the adopted rule. There are very few situations in which an owner would be unable to anticipate situations such as those named in the comment. Using their discretion to place a vendor hold on a prior owner, as provided in §19.2308(c)(1)(A), DADS and HHSC have granted recent exceptions in case of death and will continue to review each request on a case-by-case basis. The rule was not changed in response to the comment.
Comment: Concerning §19.2308(c)(1)(B)(ii)(II), the commenter stated that the new definition of "prior owner" does not take into consideration that ownership by a multi-facility entity may often be at different levels. The commenter suggested that the definition be expanded to include the words "or its affiliates."
Response: The agency does not agree that the definition should be expanded now. Medicaid payments must be made to the Medicaid provider. However, a change of ownership work group is planned; this group can explore which affiliates might be so closely affiliated that DADS could accept such a third-party authorization and whether this definition may need to be expanded to include "or its affiliates." The rule was not changed in response to the comment.
The amendment is adopted under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; Texas Human Resources Code, §161.021, which provides that the Aging and Disability Services Council shall study and make recommendations to the HHSC executive commissioner and the DADS commissioner regarding rules governing the delivery of services to persons who are served or regulated by DADS; and Texas Government Code, §531.021, which provides HHSC with the authority to administer federal funds and plan and direct the Medicaid program in each agency that operates a portion of the Medicaid program.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 13, 2007.
TRD-200700995
Kenneth L. Owens
General Counsel
Department of Aging and Disability Services
Effective date: April 2, 2007
Proposal publication date: December 22, 2006
For further information, please call: (512) 438-4162