The Current and Future Impact of the Health Reform Law on Long Term Care Providers

1. The Current and Future Impact of the Health Reform Law on Long Term Care Providers Susan M. Fradenburg 300 N. Greene Street, Suite 1400 Greensboro, NC 27401 (336) 378-5482 susan.fradenburg@smithmoorelaw.com To ask a question during the presentation, click the Q&A menu at the top of this window, type your question in the Q&A text box, and then click “Ask.” After you click Ask, the button name will change to “Edit.” Questions will be queued and most will be answered at the end of the meeting as time allows.

2. What This Presentation Will Cover • What Provisions Have Gone into Effect • What Provisions Will Become Effective March 2011 • What is Still to Come

3. What is Already Effective? Ownership Disclosure • Facilities need to be able to identify and provide information on request regarding: (1) each member of the governing body of the facility, including the name, title and period of service of each such member; (2) each person who is an officer, director, member, partner, trustee or managing employee of the facility; and (3) each person or entity who is an additional disclosable party of the facility.

4. Definitions for Ownership Disclosure “Managing employee” is identified as an individual, including a general manager, business manager, administrator, director or consultant, who directly or indirectly manages, advises, or supervises, any element of the practices, finances, or operations of the facility.

5. Definitions for Ownership Disclosure A “disclosable party” is defined as an individual who: • exercises operational, financial or managerial control over the facility or a part of the facility; • provides policies or procedures for any of the operations of the facility or provides financial or cash management services to the facility; • leases or subleases real property to the facility;

6. Definitions for Ownership Disclosure A “disclosable party” is defined as an individual who: (4) owns a whole or part interest equal to or exceeding 5% of the total value of the real property; or, (5) provides management or administrative services, management or clinical consulting services or accounting or financial services to the facility.

7. Impact of Provision at this Time Resistance to Requiring Formal Written Reporting • Written report not required at this time • Florida’s Ombudsman had requested Florida’s 677 nursing homes submit written details regarding ownership stake by February 27, 2011 • Nursing Home Operators and Owners complained • Ombudsman was fired

8. What is Already Effective? Elder Justice Act -- Report Reasonable Suspicion of Crime Effective March 2010, an owner or operator of a long term care facility certified by Medicare and/or Medicaid shall notify each owner, operator, employee, manager, agent, or contractor of a long-term care facility of that individual’s obligation to report to the Secretary and 1 or more law enforcement entities any reasonable suspicion of a crime against any individual who is a resident of, or is receiving care from, the facility. 

9. Reporting Requirements • If the event that causes the suspicion resulted in serious bodily injury, the individual shall report the suspicion immediately, but not later than 2 hours after forming the suspicion.  • If the event that caused suspicion did not result in serious bodily injury, the individual shall report the suspicion not later than 24 hours after forming the suspicion. 

10. Penalties • The penalties for failure to report are civil money penalties of up to $300,000 and possible exclusion from participation in any Federal health care program.

11. Impact of Provision at this Time • While this reporting requirement went into effect on March 23, 2010, HHS has not set up any type of “hotline” or number to call to submit report within the 2 hour to 24 hour timeline. • No regulations have been promulgated to provide additional details or guidance.

12. Recommendations Given the lack of guidance from the Government, we would recommend that the following actions be taken at this time: (1) Report suspicions of crime to the State survey agency as “contractor” for HHS and to your local law enforcement agency; (2) Post conspicuously employee’s requirement to report “reasonable suspicion”;

13. Recommendations (3) Develop and implement policies and procedures to ensure that employees and other required reporters are educated on the provisions in this section, including guidance regarding “reasonable suspicion,” and “crime.” Guidance may vary from state to state and will require judgment call on behalf of reporter.

14. What Is Already Effective? Special Focus Facilities Effective October 1, 2010, the number of Special Focus Facilities (SFF”) per State will be adjusted to reflect current population of nursing homes in each State and a ten percent increase in slots nationally. • North Carolina has 4 slots • South Carolina has 2 slots • Georgia has 3 slots

15. Choosing SFF • Selection is now coordinated with “Five Star” Quality Policy • CMS provides the State with a list of 5 “candidates” for each available slot.

16. Procedures for Notification Initial Selection Notification: • State will notify facility that it has been selected due to persistent pattern of poor quality on last three surveys. • State will notify facility of potential early termination of provider agreement if there is not significant improvements in next four standard surveys or 24 months, whichever occurs earlier. “Significant improvement” is defined as no deficiencies that are at or above an “F” level.

17. Procedures for Notification Notification of Removal from SFF Designation • Facility can “graduate” from SFF program when complete two consecutive standard surveys with no deficiencies at “F” level or greater. • State shall notify facility, Administrator, Governing Body, Owner/Operators, State Ombudsman and State Medicaid Director of the facility's removal from SFF program.

18. Termination process and procedure SFF does not meet requirements at time of fourth survey or 24 months than CMS will either: (1) recommend a 5th survey -- only done if progressive improvement shown or there is a change of ownership or (2) Terminate provider agreement

19. Effective March 23, 2011 Reduction of civil monetary penalties in certain circumstances. Beginning March 2011, the Secretary has discretion to reduce a penalty by up to 50% where the facility first self reports the deficiency and then self corrects it within 10 days after being notified of the imposition of the penalty. However, no reduction will be permitted if: 1. It is a repeat deficiency, and the Secretary already reduced a penalty imposed on the facility in the preceding year; or 2. The penalty is imposed for a deficiency that results in a pattern of harm or widespread harm, immediately jeopardizes the health or safety of a resident, or results in the death of a resident.

20. Collection of Penalties Collection of Penalties. The Secretary may provide for placement of the civil money penalty collected into an escrow account on the date on which the IDR process is completed or 90 days after the date of the imposition of the penalty, whichever is earlier.

21. Collection of Penalties • If an appeal is successful, the facility receives its money back plus interest. • If an appeal is unsuccessful, some portion of the amounts collected may be used to support activities that benefit residents.

22. Regulations in Final Rule Stage to be effective March 23, 2011 • July 9, 2010, DHHS proposed regulations to implement this section of Act. • Regulations are in the Final Rule Stage and set to become effective March 23, 2011. Regulations provide: Placing penalty funds in escrow pending appeal. A facility will no longer be able to wait until its appeal is completed to pay the imposed CMP. The CMP can be placed in an escrow account either on the date the independent informal dispute resolution process (“IIDR”) is completed or 90 days after imposition of the CMP, which ever date is earlier. The CMP will be returned with interest if the facility is successful in its appeal.

23. Regulations in Final Rule Stage to be effective March 23, 2011 • Discussion of new regulations in Federal Register make clear that CMS intends to collect the CMP within ninety days of the imposition of the CMP, at the latest. • There is no provision for setting up a procedure by which a facility can request a delay in collection.

24. Regulations in Final Rule Stage to be effective March 23, 2011 “Independent” informal dispute resolution (“IDR”) It is proposed that an IDR: (a) be requested within 30 days of notice of imposition of a CMP; (b) be completed within 60 days of the imposition of the CMP; (c) generate a written record;

25. Independent IDR Process (d) include notification to an involved resident or resident representative as well as the state ombudsman and be give these individuals the opportunity to provide written comments; and (e) be conducted by the State, CMS, or an entity approved by the State and CMS, who has no conflict of interest with the survey process. If an entity wants to use the IDR process the facility will have to pay for the costs associated with that process. The actual fee is not currently specified, but it may be incorporated into rule when it becomes final on March 23, 2011.

26. Regulations in Final Rule Stage to be effective March 23, 2011 50% reduction. The Secretary can reduce CMPs resulting in a “D” through “G” level deficiency that was not cited in the prior year by 50% under the following conditions: (a) facility self-reports noncompliance to CMS or the State before it is identified by CMS or the State; (b) correction of the noncompliance must have occurred within ten days of the date the deficient practice was identified.

27. Regulations in Final Rule Stage to be effective March 23, 2011 Allocation of Civil Money Penalties: 50% of the collected CMPs should be used to benefit nursing home residents. Examples given for use of funds include: (1) support and protect residents of facility that closes; (2) support resident and family councils; and, (3) support facility improvement initiatives. Collected CMPs cannot be used for survey and certification operations and functions.

28. Effective March 2011 Notification of Facility Closure • An administrator of a facility must submit to the Secretary, the long-term care ombudsman, residents of the facility and the resident’s legal representatives or responsible parties, written notification of an impending closure. • Notice must be given at least 60 days prior to the closure, unless the Secretary is terminating facility’s participation in Medicare program resulting in closure, then the Secretary shall identify date by which notice must be given. • The notice shall include a plan for the transfer and relocation of the resident’s prior to closure. The plan for transfer and relocation shall be approved by the State.

29. Notification of Facility Closure • The facility may not admit any new residents on or after date of notification. • The State shall ensure that before a facility closes all residents of the facility have been successfully relocated.

30. Impact of Closure • The Secretary may, in her discretion, continue to make payments to the facility for a resident until a resident has been relocated. • Any facility who fails to comply with these notification requirements: • shall be subject to a civil monetary penalty of up to $100,000, and • may be excluded from participation in any Federal health care program.

31. Effective March 2011 • Changes to Nursing Home Compare website • Designed to provide more and timelier information. • The reform bill requires the State to submit nursing home survey and certification data, including enforcement actions, to CMS at the same time as it sends notice to the facility of the survey results and enforcement action.

32. Changes to Nursing Home Compare • CMS must use the information submitted to update the website “as expeditiously as practicable” and not less than quarterly.

33. Information to be included on Nursing Home Compare website Additional information includes: (1) Staffing data for each facility, including census data, hours of care provided per resident per day, and staffing turnover (note that staffing data is not subject to the March 2011 implementation date); (2) Links to state websites with survey and certification information, Form 2567 reports, plans of correction, and information to help consumers understand the reports; (3) A new standardized complaint form and instructions on how to file a complaint;

34. Additional Information to be Included (4) A summary of the number, type, severity, and outcome of substantiated complaints at each facility; (5) A summary of adjudicated instances of criminal violations by employees of a nursing home within the facility by type, such as abuse, neglect, or other crimes that resulted in serious bodily injury, and the penalty for the violations; (6) Information on the status of facilities in the Special Focus Facility Program; and (7) The number of civil monetary penalties assessed against the facility, employees, contractors, and other agents.

35. Effective March 2011 Additional Training Requirements Dementia and Prevention Training • Facilities shall include in initial training programs for nurse aides dementia management training and patient abuse training. • The Secretary may require that such topics are also covered as part of ongoing training of nurse aides.

36. Effective March 2011 Complaint Form • The Secretary is to develop a standardized complaint form that the State will make available for use by residents, or individuals acting on the resident’s behalf. • The form shall be used to file a complaint with a State survey and certification agency and the local ombudsman program. The resident or a person acting of their behalf can still submit a complaint in a manner or format other than the standardized complaint form.

37. Complaint Process • The State is to establish a complaint resolution process in order to ensure that there is no retaliation against an individual that files a complaint. • The resolution process shall include: (1) procedures to track complaints received; (2) procedures to determine severity of complaint and investigation of the complaint; and, (3) deadlines for responding to the complaint.

38. Still to Come . . . . Staffing Accountability By March 2012, facilities will be required to submit electronically direct care staffing information, including information with respect to agency and contract staff based on payroll and other verifiable and auditable data in a uniform format.

39. Staffing Accountability The information submitted shall include, but not be limited to: • the category of work a certified employee performs, such as whether the employee is a registered nurse, licensed practical nurse, licensed vocational nurse, certified nursing assistant, therapist, or other medical personnel; • resident census data and information on resident case mix; • information of employee turnover and tenure; and • the hours of care provided by each category of certified employees.

40. Staffing Accountability • Agency and contract staff data must be reported separately from information on employee staffing. • The procedure and timing of the electronic reporting as well as any additional information to be submitted will be established after consultation with the ombudsman program, consumer advocacy groups, provider stakeholder groups, employees, and their representatives.

41. Still to Come . . . Expenditure Reporting • Effective March 2012, skilled nursing facilities must separately report expenditures for wages and benefits for direct care staff, breaking out, at a minimum, registered nurses, licensed professional nurses, certified nurse assistants, and other medical and therapy staff. • The Secretary is to redesign the cost report form by March 2011 so as to allow such reporting and make the information on such expenditures readily available to interested parties upon request.

42. Still to Come. . . . Ethics and Compliance Nursing facilities must implement compliance and ethics programs that are “effective in preventing and detecting criminal, civil, and administrative violations under this Act and in promoting quality of care” by March 2013.

43. Ethics and Compliance (cont) • The formality of the program may vary based on: • the size of the organization and • number of facilities operated.

44. Ethics and Compliance Program Program must include: (1) compliance standards and procedures; (2) designation of high-level personnel with sufficient resources and authority to assure the enforcement of the program; (3) appropriate staff training programs; (4) monitoring, auditing, and reporting systems;

45. Program Requirements Program must include: (5) disciplinary mechanisms for violations and failure to detect violations; (6) an appropriate plan for responding to violations and preventing future similar violations; and (7) periodic reassessment of the program and its effectiveness.

46. Ethics and Compliance Progress • Regulations to provide additional guidance on implementation and enforcement of this section must be issued by March 2012. • Three years after the regulations are in place, the Secretary must assess whether such programs led to changes in deficiency citations, quality performance, or quality of care, and report the results of the assessment to Congress.

47. Questions