Part I.
Texas Department of Human Services
Chapter 19.
Nursing Facility Requirements for Licensure and Medicaid Certification
Subchapter X. Requirements for Medicaid-Certified Facilities
40 TAC §19.2322, §19.2324
The Texas Department of Human Services (DHS) adopts amendments
to §19.2322 and §19.2324 with changes to the proposed text published
in the April 30, 1999, issue of the
Texas Register
(24 TexReg 3302).
Justification for the amendments is to make necessary corrections and changes
to the rules adopted by the Texas Board of Human Services in April 1998. The
moratorium rules comply with Senate Bill 190, passed by the 75th Legislature,
by establishing procedures to control the number of Medicaid-certified nursing
facility beds and the decertification and reallocation of unused Medicaid
beds. These amendments add definitions for nursing facility operator, controlling
person, and nursing facility chain to the current bed allocation rules. The
current rule regarding the history of quality care test is expanded to add
a new exception for instances where the applicant has no prior history. The
department has had applicants who are involved in aspects of the bed allocation
process, who have no history of running a nursing facility or who have had
history in another entity. This rule will look at all controlling parties
in the corporation in such instances, thus ensuring quality care while recognizing
the fact that, for example, many builders of nursing facilities will not have
been involved in the operation of facilities.
Another new portion of the test addresses cases of multiple ownership in
which the department will take into consideration the overall record of the
nursing facility chain. The department will look at multi-ownership to ensure
that quality of care exists in all ownerships within the corporation by looking
at the overall record of the chain.
A new provision clarifies that an Alzheimer's facility requesting an increase
in beds will be approved for an increase in Medicaid beds for Alzheimer's
purposes only. The intent of the Medicaid waiver was to grant a waiver for
a 10% increase for Alzheimer's beds only. The department has proposed this
rule to clarify the issue.
The history of quality of care test which applies to facilities requesting
"spend down" beds is now standardized to coincide with all other allocation
actions for purposes of clarity and to further enhance quality of care.
The current provision regarding the loss of bed allocation due to sanctions
is amended to allow for a further ground for waiver of the provision. The
current rule provides that under certain circumstances a provider will lose
the allocation of beds. The proposed rule gives the department broader authority
to waive this requirement that enhances quality of care.
The rules clarify an ambiguity in current practices to the effect that
facilities that voluntarily decertify beds must apply for new beds under the
same conditions as any other new applicant. In order to avoid confusion the
rules are also amended to the effect that DHS may require written approval
of the owner of the physical plant before approving any action that would
affect the status of the facility's Medicaid beds.
For clarity in §19.2322(h) the subsection title was changed and in
§19.2322(j) an introductory phrase was added. In §19.2324(b)(2)
and (c)(12) minor changes were made to departmental addresses in order to
clearly identify the area of contact in Long Term Care Regulatory.
The amendments will function by establishing more efficient and fair enforcement
of the rule on the distribution, allocation, and reallocation of Medicaid
beds. Additional Medicaid-certified beds will be available in facilities providing
a high quality of care.
The department received a comment from the Texas Health Care Association.
The comment addressed department procedures for handling special commissioner
waivers, and DHS staff are working on procedures for alerting the public regarding
requests for special commissioner's waivers.
The amendments are adopted under the Human Resources Code, Title
2, Chapters 22 and 32, which authorizes the department to administer public
and medical assistance programs; and under Texas Government Code §531.021,
which provides the Health and Human Services Commission with the authority
to administer federal medical assistance funds.
The amendments implement the Human Resources Code, §§22.001-
22.030 and §§32.001-32.042, specifically §32.0213.
§19.2322.Allocation, Reallocation, and Decertification Requirements.
(a)
Definitions. The words and terms defined below, when used
in this section, will have the following meanings, unless the context clearly
indicates otherwise.
(1)
Nursing Facility Operator (NFO)--The entity that is:
(A)
an applicant for licensure by the Texas Department of Human
Services (DHS) under Chapter 242 of the Texas Health and Safety Code and Medicaid
certification;
(B)
licensed by DHS; or
(C)
licensed and holds the contract to provide Medicaid services.
(2)-(3)
(No change.)
(4)
Controlling person--As defined in §242.0021 of
the Texas Health and Safety Code.
(5)
Nursing facility chain--An entity that owns, controls,
or operates under lease two or more nursing facilities within or across state
lines.
(b)
Purpose. The purpose of these rules is to control the number
of Medicaid beds for which DHS contracts. The allocation of certified beds
represents an opportunity to contract to serve a specific number of residents.
The Medicaid beds for which an NFO is certified are strictly limited to the
physical plant at which they were originally certified, unless their transfer
by the NFO in the county is expressly approved by DHS. The beds remain at
the physical plant even if the bed allocation was obtained by or through the
action of the NFO. When the NFO's business is sold, the allocation of certified
beds remains at the physical address at which they were originally certified.
Any transfer must meet the requirements contained in subsection (i) of this
section.
(c)
(No change.)
(d)
Quality of care.
(1)
History of quality of care. For purposes of this section,
an NFO demonstrates a history of quality care if, within the two years preceding
a request for additional capacity:
(A)
the NFO has not received any of the following sanctions:
(i)
termination of Medicaid certification;
(ii)
termination of Medicaid contract;
(iii)
civil penalty pursuant to §242.065 of the Texas
Health and Safety Code;
(iv)
Medicaid monetary penalty;
(v)
denial of payment for new admissions;
(vi)
denial of facility's license; or
(vii)
denial of new admissions, as described in §242.012
of the Texas Health and Safety Code; and
(B)
DHS does not find a clear pattern of substantial or repeated
licensing and Medicaid sanctions including administrative penalties, and/or
other sanctions.
(2)
Exceptions to history of quality of care.
(A)
Regardless of any sanctions imposed in subsection (d)(1)(A)
of this section. DHS may grant an application in a county with four or fewer
facilities, where none of the facilities would meet all of the requirements
in subsection (d) of this section for increased capacity, upon finding a clear
pattern of decreasing numbers of substantial or repeated licensing and Medicaid
sanctions including administrative penalties, and/or other sanctions on the
part of the NFO.
(B)
Subsection (d)(1)(A) of this section does not apply to
sanctions that are administratively withdrawn or subsequently reversed upon
administrative or judicial appeal.
(C)
In the case of sanctions that are appealed, either administratively
or judicially, an application to DHS for an allocation of Medicaid certified
beds will be suspended until the appeal has been finally resolved.
(D)
Subsection (d)(1) of this section will not apply if all
the following are met:
(i)
The applicant NFO has changed ownership within that period;
(ii)
The new owner of the NFO has demonstrated a history of
quality care in that nursing facility for at least one year preceding the
application for increased capacity; and
(iii)
The new owner of the NFO has demonstrated to DHS's satisfaction
a record of compliance in other nursing facilities it owns or operates.
(E)
In instances where the NFO, waiver applicant, or other
entity has no history of providing care, as outlined in subsection (d)(1)
of this section, DHS will review the overall record of other facilities that
the controlling person or persons owns, operates, or controls in order to
determine the ability to provide quality care.
(3)
Multiple ownership. Where an NFO, waiver applicant,
or other entity to which subsection (d) applies is owned, operated under lease
or otherwise controlled by nursing facility chain DHS will:
(A)
apply the criteria as outlined in subsection (d)(A) of
this section to the facility at issue; and
(B)
examine the overall record of the nursing facility chain
in order to determine the ability to provide quality care.
(e)
Exemptions. If the NFO meets all criteria, DHS may grant
the following exemptions from the policy stated in subsection (c) of this
section.
(1)
NFOs that change ownership. Except as otherwise provided
in this section, DHS limits contracting with the new owner to no more certified
Medicaid beds than the prior owner had when the ownership change occurred.
(2)
NFOs whose Medicaid contracts have been terminated.
DHS limits contracting to no more than the number of certified Medicaid beds
on the effective date of termination. The NFO must meet certification and
contract requirements within 90 days of the effective date of the termination
in order to retain the allocation of Medicaid beds. The loss of the bed allocation
after 90 days is dependant upon the NFO having failed two surveys within that
period, so long as these surveys were requested within sufficient time for
DHS to complete them within 90 days, consistent with federal requirements.
Until an NFO has qualified to re-enter the Medicaid program, the allocation
of beds to that facility is suspended and any sale of either the NFO or the
physical plant will not transfer or convey the bed allocation to a buyer.
However, DHS may make an affirmative finding that good cause exists to waive
this requirement to facilitate a change in ownership to protect residents
of the facility or for other good cause.
(3)
Replacement beds. DHS limits contracting of the replacement
beds to the county in which the original physical plant was located and to
no more than the number of certified Medicaid beds being replaced. The replacement
beds must be recertified in the replacement physical plant within 24 months
from the date of the DHS letter of approval to transfer beds. Potential NFOs
previously issued waivers have 18 months from the effective date of this rule
to be licensed and certified. DHS may grant an extension for extenuating circumstances,
at the discretion of the DHS commissioner.
(4)
Low capacity. For reasons of efficiency, DHS will
accept an application to contract up to 60 beds from a small facility of less
than 60 licensed beds if the NFO:
(A)
has a Medicaid contract to provide nursing facility services;
and
(B)
has not had remedies imposed, as specified in subsection
(d) of this section, which have resulted in contract cancellation in the 24-
month period immediately preceding the month of application.
(5)
Teaching facilities. Facilities approved and
contracted to operate as teaching nursing facilities from March 1, 1989, through
January 1, 1993, must continue to meet their affiliation agreements.
(6)
Special commissioner's waiver.
(A)
The commissioner of DHS has authority to waive the restriction
on contracting in subsection (c) of this section and direct DHS to enter into
Medicaid contracts with NFOs that satisfy the requirements specified in this
subparagraph. In a manner acceptable to DHS, each of these NFOs must:
(i)
document that there is a crisis and immediate need for
additional Medicaid nursing-facility beds in the NFO's community;
(ii)
document that there are problems with the quality of care
available in the NFO's community, and show that new Medicaid beds will remedy
these problems;
(iii)
demonstrate that Medicaid residents in their community
do not have reasonable access to quality nursing facility care;
(iv)
document strong community support for a new Medicaid nursing
facility; and
(v)
demonstrate a history of quality care, as specified in
subsection (d) of this section. An applicant that has not owned or operated
a nursing facility may apply; however, DHS will evaluate the applicant and
any controlling person to determine if the applicant has the capacity to provide
quality care.
(B)
DHS applies the following criteria when granting special
DHS commissioner's waivers:
(i)
If the physical plant has not completed construction requirements,
and if the NFO has not been licensed and certified within 24 months of the
date on the DHS letter approving the waiver, the DHS commissioner will rescind
the approvals for all such waivers granted.
(ii)
DHS may grant an extension for extenuating circumstances,
at the discretion of the DHS commissioner.
(7)
Criminal justice and underserved minorities.
The commissioner may grant a waiver of these restrictions for a contract if
the commissioner determines that beds are necessary for the following circumstances:
(A)
to meet the need identified and determined by the Texas
Department of Criminal Justice (TDCJ) as necessary to serve persons under
the supervision of TDCJ who have been released on parole, mandatory supervision,
or special needs parole under the Code of Criminal Procedure, Article 42.18;
or
(B)
to meet the documented demand in underserved minority communities
where beds are not available from existing resources. For purposes of this
waiver, the term minority shall mean all persons who are black, hispanic,
Asian or Pacific islander, American Indian, or Alaskan native. The facility
must:
(i)
be located in a county with a total population of at least
1,000,000, according to the most recent U.S. census;
(ii)
serve a zip code whose minority population is greater
than 50%, according to the most recent U.S. census;
(iii)
document that minority residents in the zip code in which
the facility is located are unable to attain Medicaid long term care services
in that specific location, due to lack of such service availability; and
(iv)
be the only waived facility, as defined in this paragraph,
in that county.
(C)
NFOs granted waivers must be licensed and certified within
24 months of the approval letter.
(D)
Potential NFOs previously issued waivers have 18 months
from the effective date of this rule to be licensed and certified.
(8)
Alzheimer's facilities. An Alzheimer's facility,
established under this waiver that seeks to increase its Medicaid bed allocation
will receive an increase of Medicaid beds as Alzheimer beds only. DHS waives
a restriction imposed by state law on the authority to contract under the
state Medicaid program for nursing home beds based on the percentage of beds
that are occupied in a geographical area if the NFO:
(A)
is affiliated with a medical school operated by the state;
(B)
is participating in research programs for the care and
treatment of persons with Alzheimer's disease;
(C)
is designed to separate and treat Alzheimer's disease by
stage and functional level; and
(D)
documents to DHS the need for the specific number of beds
requested.
(9)
Medicaid eligible residents for whom no Medicaid
bed is available. Facilities may obtain certified beds to serve residents
by meeting the following criteria:
(A)
The resident must:
(i)
have been a resident of the nursing facility for at least
six consecutive months before becoming eligible for Medicaid; and
(ii)
not have been eligible for Medicaid at the time of admission
to the nursing facility.
(B)
The NFO must:
(i)
request certification of currently non-certified Medicaid
beds;
(ii)
meet requirements for Medicaid participation;
(iii)
obtain a Medicaid contract; and
(iv)
have demonstrated to DHS a satisfactory history of quality
of care as specified in subsection (d) of this section.
(C)
The certification of the bed is in effect until the resident's
death or permanent discharge from the nursing facility or a Medicaid bed in
the nursing facility becomes available.
(D)
The number of Medicaid-certified beds under this paragraph
may not exceed 10% of the total number of licensed beds in the nursing facility
at any one time.
(f)
Loss of allocation due to sanctions. An NFO whose license
has been denied or revoked loses the allocation of certified beds on the effective
date of the denial or revocation and may not contract with DHS at the physical
plant for which those beds were allocated. No beds are transferred to the
buyer when an NFO whose license has been revoked or denied is sold. If the
owner of the physical plant also operates the facility, the denial of the
license will result in the loss of the owner's bed allocation at that facility.
If the owner of the physical plant leases to an NFO, the owner will lose the
allocation of beds when, within any 42-month period, one or more NFOs has
two of any of the following: license denials, license revocations, or contract
terminations. However, DHS may make an affirmative finding that good cause
exists to waive this requirement to facilitate a change in ownership to protect
residents of a facility or to ensure access to quality care in the community.
(g)
Decertification of unused beds.
(1)
Six months after the effective date of the adopted rule,
an NFO with an average occupancy rate for the preceding six months of less
than 70% will have a specific number of its beds decertified. The number of
beds to be decertified will be calculated by subtracting the preceding six-month
average occupancy rate of Medicaid certified beds in the facility from 70%
of the number of allocated certified beds and dividing the difference by 2,
rounding the final figure down if necessary. For example: for a facility with
100 Medicaid-certified beds and a 50% occupancy rate, the difference between
70% (70 beds) and 50% (50 beds) is 20 beds, divided by 2, equals 10 beds to
be decertified.
(2)
NFO occupancy rates may be reviewed annually and if
the average occupancy rate is below 70% for the previous six months, the decertification
process will occur.
(3)
Medicaid-certified beds in new or replacement physical
plants and newly constructed wings in existing physical plants will be exempt
from this decertification process until they have been certified for two years.
(4)
Facilities that have had beds decertified under this
subsection are also eligible to receive an increased allocation of certified
beds if the requirements in subsection (d) of this section are met.
(5)
Facilities that voluntarily decertify existing Medicaid
beds must apply for Medicaid beds under the same conditions as any other new
applicant for licensure and certification.
(h)
Allocation of additional Medicaid beds. NFOs that wish
to increase the number of allocated certified beds must meet the following
criteria.
(1)
A Medicaid-certified NFO must have an average occupancy
rate of 90% of the current number of its certified beds for nine out of the
previous 12 months. The request for additional beds must be no greater than
10% of the current number of certified beds in a nursing facility;
(2)
An NFO's request for Medicaid-certified beds must
be no greater than 10% of the current number of its licensed beds.
(3)
NFOs may reapply for additional Medicaid-certified
beds, having met the requirements in paragraphs (1) or (2) of this subsection,
no sooner than nine months from the date of the prior allocation.
(4)
To qualify for increased bed capacity the NFOs must,
in addition to meeting the criteria in paragraph (1) or (2) of this subsection,
demonstrate a history of quality care, as defined in subsection (d) of this
section.
(i)
Transfer of allocation of Medicaid beds within a county.
Subject to approval by DHS, the NFO has the opportunity to contract for Medicaid-certified
beds under the following conditions:
(1)
Certified Medicaid beds may be transferred within a county
if the owners of the physical plants involved approve the transfer in writing.
(2)
DHS must expressly approve the transfer specified
in paragraph (1) of this subsection. To have a transfer approved, the physical
plant owners and NFOs involved in the transaction must establish a history
of quality of care as defined in subsection (d) of this section.
(j)
Owner authorization of Medicaid status. DHS may require
written approval of the owner of the physical plant before approving any action
that would affect the status of the Medicaid beds.
§19.2324.Selection and Contracting Procedures for Adding Beds in High-Occupancy Areas.
(a)
Definitions. The words and terms defined below, when used
in this section, will have the following meanings, unless the context clearly
indicates otherwise.
(1)
Nursing Facility Operator (NFO)--The entity that is:
(A)
an applicant for licensure by DHS, under Chapter 242 of
the Texas Health and Safety Code, and Medicaid-certification;
(B)
licensed by the Texas Department of Human Services (DHS);
or
(C)
licensed and holds the contract to provide Medicaid services.
(2)-(6)
(No change.)
(b)
Primary selection process-conversion of existing licensed
beds. When DHS determines that the occupancy rate in a county exceeds the
threshold during any six- month period, DHS places a public notice in the
(1)
(No change.)
(2)
Potential contractors seeking to contract in an area
identified in the public notice must demonstrate a history of quality of care,
as specified in §19.2322(d) of this title (relating to Allocation, Reallocation,
and Decertification Requirements), and must make written reply to the public
notice. The reply must be received by the Application and Issuance Unit, Long
Term Care-Regulatory, Mail Code E- 342, Texas Department of Human Services,
P.O. Box 149030, Austin, Texas 78714-9030, before the close of business on
the published ending date of the open solicitation period. The reply must
include the following information:
(A)-(C)
(No change.)
(3)
(No change.)
(c)
Secondary selection process - new construction. When there
are insufficient available beds after the primary selection, potential contractors
may participate in a secondary selection process. The secondary selection
is for potential contractors who wish to construct a nursing facility or an
addition to an existing nursing facility.
(1)
(No change.)
(2)
Potential contractors seeking to contract to construct
a nursing facility or an addition to an existing nursing facility in a high-
occupancy area must demonstrate a history of quality care, as specified in
§19.2322(d) of this title (relating to Allocation, Reallocation and Decertification
Requirements). This rule does not eliminate a new potential NFO who has no
history of providing care. The NFO must make written reply to the public notice.
The reply must be received by Long Term Care-Regulatory, Mail Code E-342,
Texas Department of Human Services, P.O. Box 149030, Austin, Texas 78714-
9030, before the close of business on the published ending date of the open
solicitation period. The reply must include the following information:
(A)-(C)
(No change.)
(3)-(11)
(No change.)
(12)
Providers may request an informal review of DHS actions
involving this section and §19.2322 of this title (relating to Allocation,
Reallocation, and Decertification Requirements) by writing to unit manager,
Application and Issuance Unit, Long Term Care-Regulatory, Mail Code E-342,
Texas Department of Human Services, P.O. Box 149030, Austin, Texas 78714-9030.
The review must be requested within 30 days of the DHS action.
(d)
(No change.)
(e)
Requesting occupancy reports. DHS computes occupancy rates
by using the information contained in DHS's Nursing Facility Monthly Occupancy
Report form. Monthly copies of occupancy-rate information for a particular
county are available on request. Requests may be sent to Long Term Care Bed-Regulatory,
Mail Code E-342, Texas Department of Human Services, P.O. Box 149030, Austin,
Texas 78714-9030.
(f)
(No change.)
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 June
29, 1999.
TRD-9903890
Paul Leche
General Counsel, Legal Services
Texas Department of Human Services
Effective date: August 1, 1999
Proposal publication date: April 30, 1999
For further information, please call: (512) 438-3765
Subchapter D. Provider Contracts
40 TAC §47.4902
The Texas Department of Human Services (DHS) adopts an amendment
to §47.4902, without changes to the proposed text published in the May
7, 1999, issue of the
Texas Register
(24 TexReg
3462).
This amendment changes the provider qualifications for the PHC program
to specify the appropriate level of licensure. Currently, DHS contracts for
PHC with home and community support services (HCSS) agencies that are licensed
under the one of the following categories: licensed and certified home health
services, licensed home health services, or personal assistance services.
The requirement for these categories of licensure was implemented to facilitate
coordination of PHC and Medicare services. However, currently there is no
requirement for the Medicare agency to be in geographical proximity to the
licensed home health agency. Due to recent federal changes in the Medicare
program required by the Balanced Budget Act, many HCSS agencies are closing
their Medicare offices and voluntarily relinquishing their licensed and certified
category of licensure.
The amendment assures that primary home care services will be delivered
under the most appropriate category of licensure. PHC provider agencies will
now be required to be licensed only under the licensed home health category
or the personal assistance category. PHC providers who only have the licensed
home health or the personal assistance category of licensure will be required
to refer PHC clients to Medicare providers for Medicare services. According
to the Texas Department of Health, PHC providers who only have the licensed
and certified category of licensure may add the licensed home health services
or personal assistance services category free of charge.
The amendment also specifies the requirement for a separate contract in
each DHS region and that the counties included in the DHS contract must be
included in the service area of the license on file at the Texas Department
of Health. Additionally, the amendment clarifies that out-of-state corporations
are required to be authorized to do business in the State of Texas. The requirement
to specify geographical boundaries covered by the appropriate category of
licensure will assure that PHC providers are qualified to deliver PHC services
in the areas included in the contract with DHS.
The amendment will function by promoting consistency between licensure
and contracting requirements for personal assistance services; ensuring compliance
with applicable state regulations and program requirements; and ensuring that
personal assistance services are delivered under the appropriate category
of licensure.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Human Resources Code, Title
2, Chapters 22 and 32, which provides the department with the authority to
administer public and medical assistance programs and under Texas Government
Code §531.021, which provides the Health and Human Services Commission
with the authority to administer federal medical assistance funds.
The amendment implements §§22.001-22.030 and 32.001-32.042 of
the Human Resources Code.
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 June
29, 1999.
TRD-9903891
Paul Leche
General Counsel, Legal Services
Texas Department of Human Services
Effective date: August 1, 1999
Proposal publication date: May 7, 1999
For further information, please call: (512) 438-3765
Subchapter L. Fair Hearings
Chapter 47.
Primary Home Care
Chapter 79.
Legal Services