After a little more than a year's wait, CMS has published the final version of a massive overhaul of the regulations setting forth the requirements for Long-Term Care (LTC) facilities to participate in the Medicare and Medicaid programs.1 The relatively short timeframe between the proposed and final rules is impressive given that CMS received more than 9,800 public comments to the proposed rule.
The final regulations consist of three phases to be implemented over a three-year period. Phase 1 must be implemented by November 28, 2016, Phase 2 must be implemented by November 28, 2017, and Phase 3 must be implemented by November 28, 2019. CMS estimates that the total projected cost of this final rule will be about $62,900 per facility in the first year and $55,000 per facility for subsequent years.
According to CMS, the requirements2 in this final rule "will update the existing requirements for long-term care facilities to reflect current standards of practice." In addition, states CMS, "the revisions will provide added flexibility to providers, potentially improve efficiency and effectiveness, potentially enhance resident quality of care and quality of life, and potentially improve clinical outcomes." While all industry stakeholders welcome quality improvements, and while quality improvements can enhance cost efficiency (such as by reducing hospital readmissions), the implementation of quality improvements can also carry a significant price tag. This alert will highlight certain major provisions of the final rule3 and will also comment on potential impacts, cost and otherwise, to your LTC facility. Some provisions of the final rule do increase flexibility for LTC facilities in staffing and other areas, thereby representing potential cost-savings. Other provisions may increase facility costs.
Summary of Major Highlights
- No More Pre-dispute Binding Arbitration Agreements (§483.70(n)) — effective in Phase 1, i.e., by November 28, 2016. The final regulations prohibit LTC facilities4 from entering into an agreement for binding arbitration with a resident or his or her representative until after a dispute arises between the parties. Moreover, even after a dispute arises, an LTC facility cannot require the resident to sign an arbitration agreement as a condition of the resident continuing to stay at the facility. CMS recognizes in its preamble commentary to the final rule that many commenters objected to this provision by pointing to cases in which courts have rejected various federal agencies' attempts to prohibit the enforcement of arbitration agreements. Commenters also argued that when Congress intends to give an agency authority to prohibit or impose conditions on the use of arbitration agreements, it does so with unambiguous statutory language, and it did not do so in the Social Security Act. Nonetheless, CMS has finalized the prohibition on these types of arbitration agreements, although it did clarify that the prohibition does not affect existing agreements: "We emphasize that this final rule does not prohibit all arbitration agreements between residents and the LTC facilities in which they reside, and does not have any effect on existing arbitration agreements or render them unenforceable."
- Annual Facility Assessment (NEW 483.70(e)) — effective in Phase 2, i.e., by November 28, 2017. CMS finalizes a new requirement for facilities to conduct and document, on an annual basis, a facility-wide assessment to determine what resources are necessary to care for the facility's residents competently during both day-to-day operations and emergencies. Regarding the potential cost impact of this requirement, CMS states: "LTC facilities must already determine and plan for what staffing they will need, as well as the other resources that will be required to care for their residents and operate their facilities." Thus, concludes CMS, "we believe that conducting and documenting a facility assessment is a standard business practice and do not include a burden for this requirement in the impact analysis."
- QAPI (NEW 483.75) — effective in Phase 3, i.e., by November 28, 2019, with certain exceptions discussed below. The final rule requires each LTC facility to develop, implement, maintain and document an effective, comprehensive, data-driven quality assurance and performance improvement (QAPI) program that focuses on systems of care, outcomes and services for residents and staff. Moreover, in an exception to the fact that QAPI will otherwise be implemented in Phase 3, the facility must present its initial QAPI plan to the State Survey Agency not later than one year after the effective date of the final regulation (i.e., by November 28, 2017). The facility must continue to present its QAPI plan at each recertification survey thereafter or upon request by a surveyor or CMS.
- In addressing the cost burden associated with these new requirements, CMS notes that the existing LTC regulations already require that Quality Assessment and Assurance (QAA) committees identify and correct specific deficiencies at the LTC facility (and, therefore, despite the fact that QAPI will otherwise be implemented in Phase 3, the effective date of most of the QAA requirements is Phase I, i.e., by November 28, 2016).5 Per CMS: "We believe facilities will use some of the resources they have to comply with the QAA requirements … in the development of a QAPI-based, proactive approach to assessing services they provide (including those services furnished under contract or arrangement) and to improve the quality of care and quality of life provided to their residents." Moreover, states CMS: "Since the existing Interpretative Guidelines for facilities to comply with the Medicare regulations provide information on how to conduct quality improvement programs, we anticipate that some facilities are already utilizing the QAPI model. We also anticipate that facilities will use their existing resources to meet the requirements in this final rule."
- Compliance Program Requirements (NEW 483.85) — effective in Phase 3, i.e., by November 28, 2019. Although the Affordable Care Act set forth a statutory requirement for LTC facilities to have compliance programs,6 CMS has never before fleshed out these requirements through regulation. Now, a new section of the final LTC requirements (42 CFR 483.85) does just that. The new compliance program requirements vary depending on whether an operating organization has fewer than five facilities or five or more facilities. In response to commenters wondering how surveyors will determine compliance with these requirements, CMS responds that it will be developing and publishing sub-regulatory guidance. Below are CMS' estimates of the increased staffing costs associated with the new compliance program requirements:7
- Staffing. "We … estimate that in carrying out this program the compliance liaison (nursing staffs) in each of 6,919 facilities will commit 10 percent of an FTE, at a total cost of $87,788,272 (10% of FTE x 2080 x $61 x 6,919)."
- Additional Staffing for Operating Organizations with Five or More Facilities. "We estimate that in carrying out this program the compliance officer (similar to an administrator) in each of the 395 organizations operating 5 or more facilities will commit 30 percent of a full time equivalent (FTE) in the compliance program operation, for a total cost of $20,950,800 (30% of FTE x 2080 x $85 x 395)."
- Training Requirements (NEW 483.95) — effective in Phase 3, i.e., by November 28, 2019, with certain exceptions, e.g., (i) abuse and neglect training, (ii) dementia management and abuse prevention training, (iii) care of the cognitively impaired, and (iv) training of feeding assistants, all of which must be implemented in Phase 1, i.e., by November 28, 2016. CMS is adding another new section to specify the requirements of an effective training program that facilities must develop for new and existing employed, contracted, and volunteer staff. Specifically, according to CMS: "We are finalizing our proposal to require facilities to develop and/or update training materials to include topics on communication, resident rights, facility obligations, abuse, neglect, exploitation, infection control, and its QAPI program. We require that these training topics be provided for all new and existing staff; individuals providing services under a contractual arrangement; and volunteers, consistent with their expected roles and that they be able to demonstrate competency in these topic areas. We also expect each facility to keep a record of these trainings. To reduce regulatory burden and create a reasonable requirement we have not specified the amount or types of training that a facility must provide."
- Comprehensive Person-Centered Care Planning (483.21 and 483.10) — effective in Phase 1, i.e., by November 28, 2016, with certain exceptions as noted below. CMS adds staffing, documentation and timing requirements related to care plans and to admissions, discharges and transfers. For example:
- §483.21(a) requires facilities to develop within 48 hours of admission, and as a prerequisite to a more comprehensive care plan, a "baseline care plan" for each resident (as well as to provide a summary of such plan to the resident). As an exception to the Phase 1 implementation date for most of §483.21, the baseline care plan requirements are effective in Phase 2, i.e., by November 28, 2017.8
- As a means to encourage facilities to involve residents in their plans of care, §483.21(b)(2)(ii)(E) mandates that the facility must provide an explanation in the resident's medical record if the participation of the resident and his or her representative is determined not practicable for the development of the resident's care plan.9
- §483.10(c)(2)(v), as finalized, states that the resident has the right to sign the care plan after significant changes.
- §483.21(c)(2)(iii) imposes a new requirement that LTC facilities, as part of the discharge summary, reconcile all pre-discharge medications, both prescribed and non-prescription, with the resident's post discharge medications.
- Under §483.21(c)(2)(iv), a post-discharge plan must be developed along with the participation of the resident and, with the resident's consent, his or her resident representative.
- Behavioral Health Services (483.40 (NEW ) and 483.45) — effective in Phase 2, i.e., by November 28, 2017, with certain exceptions as noted below. New section 42 CFR 483.40 amplifies previous requirements for providing behavioral health services to residents, including imposing new restrictions on psychotropic drugs. Some commenters expressed concern that the new psychotropic drug restrictions were so extensive that they could result in under-treatment of pain and other distressing symptoms and reduce the efficacy of palliative care and the overall quality of life for the residents. In response, CMS removed the drug category of "opioid analgesics" from the finalized definition of "psychotropic drug" and lengthened the time limit for PRN (or "as needed") orders of psychotropic drugs (including anti-depressants) from the proposed 48 hours to 14 days.
- Physical Plant Requirements (483.90) — effective in Phase 1, i.e., by November 28, 2016, with certain exceptions.10
- For facilities that receive approval of construction or reconstruction plans by state and local authorities, or are newly certified, after November 28, 2016 ("new facilities"), the number of residents per room is limited to two (the previous limit was four residents per room). One commenter asked CMS to make clear that "newly certified" does not include facilities where there has been a change of ownership. Other commenters echoed similar concerns about certification after change of ownership. CMS responded that when facilities change ownership, the new owners have the option of accepting the existing provider agreement, in which case the facility would not be "newly certified." However, per CMS, "when a new owner does not accept the existing provider agreement, the facility does require a 'new certification' and these requirements would apply."
- For new facilities, each resident room must have its own bathroom equipped with at least a commode and a sink. CMS dropped the proposed requirement to have a shower in each bathroom.
- Increased Staffing, Documentation and Legal Requirements
- Additional Members of the Interdisciplinary Team (IDT) – 483.21(b)(2)(ii) — effective in Phase 1, i.e., by November 28, 2016. CMS has finalized its proposal to require that a nurse aide (NA) and a member of nutrition services participate on the IDT. CMS estimates that participation on the IDT will add one hour of staff time to the duties of an NA and a member of food services. The participating food services member need not be a dietitian.
- Pharmacy Services – Drug Regimen Review (483.45(c)(2)) — effective in Phase 2, i.e., by November 28, 2017. The monthly drug regimen review (DRR) performed by the pharmacist must include a concurrent review of the resident's medical record.
- Qualifications for Dietary Staff – 483.60(a) — effective in Phase 1, i.e., by November 28, 2016, with certain exceptions discussed below. The final rule establishes new requirements for dietitians and, for facilities that do not employ a full-time dietitian, for directors of food and nutrition services (the previous LTC requirements did not address qualifications for a food service manager). CMS requires that the director of food and nutrition services be certified as a certified dietary manager, certified food service manager or similar national certification for food service management and safety from a national certifying body; or have an associate’s or higher degree in food service management or hospitality from an accredited institution of higher learning, or meet established state requirements. CMS notes: "Many states already establish additional staff qualifications for food service directors and we expect that most facilities already hire food service directors that meet these requirements." For dietitians and food services staff hired, contracted or appointed prior to November 28, 2016, CMS allows five years following the effective date of the final rule for these individuals to come into compliance with these qualifications.
- Grievances (483.10(j)) — effective in Phase 1, i.e., by November 28, 2016. Facilities must establish a grievance policy, appoint a grievance official, and, if the resident requests, issue written grievance decisions.11 Facilities need not hire a new, full-time individual to act as a grievance official. Moreover, CMS does not mandate any particular timeframe in which a grievance investigation must be completed (although the facility must give the resident a "reasonable expected time frame for completing the review"). In commenting on the cost of these requirements, CMS states: "Based on these existing regulations, we expect that most facilities already have process for residents to file a grievance and a process in which they will investigate and respond. Therefore, the cost associated with establishing a grievance policy will be associated with designating an individual as the grievance official who is responsible for overseeing the grievance process. We do not specify who has to be the grievance official, but for purposes of estimating the cost we believe that an average facility will designate a social worker to be the grievance official and that individual will need to commit about 10 percent of a FTE to his or her responsibilities for overseeing the grievance process."
- Expanded Access to Records (483.10(h) — effective in Phase 1, i.e., by November 28, 2016). CMS has expanded the right to access records to include both personal and medical records. However, states CMS, "we do not require facilities to translate or summarize personal and medical records and survey reports."
- Notification of Charges – 483.10(f)(11)(iii) — effective in Phase 1, i.e., by November 28, 2016. The final rule specifies that if a resident requests a non-covered item or service for which the facility will charge, the facility must inform the resident both orally and in writing of the charge. The prior provisions required that facilities only "inform" the resident. In commenting on the anticipated cost of this provision, CMS states: "We expect that 'informing' has typically been accomplished orally; therefore the additional cost to facilities is associated with providing the written information at the time the oral information is given. We anticipate that this written information will most often be in the form of a list of standard charges for frequently requested items and the cost will be the cost of photocopying or printing the list. In infrequent cases, an individualized cost page may be needed. We estimate that a facility will spend no more than $50 per year on average to print the notices."
Potential Cost-Savings and Burdensome Proposals Dropped by Final Rule
The final rule, while adding many new requirements for LTC facilities, does provide expanded flexibility for facilities in certain respects. Moreover, in the final rule CMS dropped some of the provisions of the proposed rule that commenters found too restrictive. Finally, CMS emphasizes in the preamble commentary to the final rule that it could have explored, but opted not to, several requirements (such as minimum staffing ratios for LTC facilities) that could have proven especially burdensome for facilities. A highlight of some of these types of provisions and CMS commentary is below.
- Flexibility to Use Non-Physician Staff. In various places throughout the final rule, CMS incorporates the full scope of practice for non-physician practitioners related to actions that were formerly restricted to physicians. For example, in new §483.50, a physician assistant, nurse practitioner or clinical nurse specialist can now order laboratory, radiology and other diagnostic services for a resident in accordance with state law, including scope of practice laws. As another example, a practitioner other than the attending physician can now determine that a hospital transfer is medically appropriate in an emergency situation, consistent with state law and facility policy (§483.70(j)). As a final example, CMS modifies the regulatory text at §483.30(e)(2) and §483.30(e)(3), respectively, to specify that the attending physician has the authority to delegate to a qualified dietitian or other clinically qualified nutrition professional the task of writing dietary orders, and to delegate to a qualified therapist the task of writing therapy orders, to the extent that these professionals are permitted to perform these tasks under state law. CMS cautions that the some positions and tasks are still restricted to physicians because of the statutory mandates of the Social Security Act (such as the requirement at section 1819(b)(6)(A) of the Act, which requires that the care of every resident be provided under the supervision of a physician).
- CMS Dropped and Did Not Finalize the Following Proposals:
- To require facilities to credential residents' chosen attending physicians. However, states CMS: "We have revised these requirements to state that the physician must be licensed to practice and must meet applicable regulatory requirements as well as a requirement that, in the event that it becomes necessary for a facility to seek alternate physician participation, the facility must discuss this with the resident and honor the resident's selection of a new attending physician."
- To require facilities that provide outpatient rehabilitative therapy services to meet requirements similar to those already established for hospitals.
- To require that a social worker be part of the IDT.
- To require that a facility, prior to an unscheduled transfer of a resident to a hospital, provide or arrange for an in-person evaluation of a resident, to be conducted expeditiously, by a physician, a physician assistant, nurse practitioner, or clinical nurse specialist prior to transferring the resident to a hospital.
- In addition, CMS Clarifies in the Commentary to the Final Rule that the Final Rule Does NOT Involve the Following:
- No minimum staffing ratios for LTC facilities.
- "We are not mandating a 24/7 RN presence in each facility at this time."
- "We are not, at this time, requiring criminal background checks on volunteers, but would expect facilities to exercise reasonable care consistent with the volunteers' expected roles and not knowingly engage volunteers who have been found guilty of abuse, neglect, exploitation, misappropriation of property, or mistreatment by a court of law. With regard to the employees of contractors such as those performing renovations, who would not be providing care to or interacting directly with residents, we would expect the facility to exercise reasonable care in selecting the contractor."
- "We agree that a facility is not expected to query 50 states for information on each licensed individual. We would expect the facility to check with the state in which the facility is located and care is delivered and potentially bordering states or other states that the individual is known to have been licensed in, based on the individuals resume or other employment information available to the facility."
- "We do not require that any of the members of the IDT participate in person. Facilities have the flexibility to determine how to hold IDT meetings whether in person or by conference call. The facility may determine that participation by the nursing assistant or any member, may be best met through email participation or written notes. We believe that this added flexibility will help to alleviate concerns of shortage and availability."
Conclusion — Many Details Deferred to Sub-Regulatory Guidance
The impact of the massive overhaul of the LTC regulations will play out over the three-year phased implementation period, but LTC facilities should be cognizant of the fact that the Phase 1 provisions take effect almost immediately, i.e., by November 28, 2016. In addition, the final rule defers many details to sub-regulatory guidance. By our count, CMS mentions 53 times in its preamble to the final rule that it will flesh out various requirements through "sub-regulatory guidance" (this number includes a handful of instances in which CMS indicates that it has the authority to add to requirements with sub-regulatory guidance, but does not actually say that it will do so, and a few instances in which the preamble commentary is not entirely clear whether CMS is referring to existing sub-regulatory guidance). Thus, an important compliance cost for LTC facilities will be monitoring and integrating these multiple pieces of guidance as they are issued.
See 81 Fed. Reg. 68688, et seq (October 4, 2016).
Note that CMS has historically designated the standards and certification (S&C) regulations for LTC facilities as "requirements" of participation, rather than "conditions" of participation, the latter term being used for S&C regulations applicable to other types of Medicare-participating providers, such as hospitals. Some commenters took the occasion of the proposed new set of LTC "requirements" to express concern that this terminology effectively makes any violation or unmet requirement a reason for surveyors to close a facility (instead of issuing a notice of deficiency and asking for a plan of correction). In response, CMS confirmed that its terminology deliberately follows the statutory language of "requirements," but noted that "[e]xcept in very rare cases of serious, immediate health and safety risks to residents, facilities are always given an opportunity to address and correct deficiencies."
The final rule is so vast that we cannot cover all of its topics within the space of this alert.
The regulations define "facilities" as Medicare SNFs, Medicaid NFs, and distinct parts of institutions participating in Medicare as SNFs or in Medicaid as NFs. 42 CFR 483.5(a).
The only QAA requirement to be delayed beyond Phase I is the requirement that the infection control and prevent officer (ICPO) be part of the QAA committee. This requirement is effective in Phase 3, i.e., by November 28, 2019.
Section 6102 of the ACA mandated compliance and ethics programs in LTC facilities.
CMS also provides aggregate estimates across all facilities of the following additional costs associated with the compliance program requirements: (i) Information Collection Requirement (ICR). "We estimate the information collection requirement (ICR) burden associated with developing this program to be $26,052,468;" and (ii) Ongoing annual review and revision. "[F]acilities are required to review their compliance and ethics program annually. Therefore, for subsequent years we estimate to comply with the ICR requirement to review and, if necessary, revise the operating organization's program annually will cost an estimated $6,216,900."
The other exception to the Phase 1 implementation date is that the services outlined in the care plan must be "trauma-informed." This requirement is delayed until Phase 3, i.e., by November 28, 2019.
In developing this requirement, CMS expressed its concern about a July 2012 OIG report revealing that 91 percent of the care plans reviewed in the study did not contain evidence that the resident or a representative participated in the care planning process.
The exceptions relate to the call system from each resident’s bedside, which is delayed until Phase 3 (i.e., by November 28, 2019), and the policies regarding smoking, which are delayed until Phase 2 (i.e., by November 28, 2017).
The prior regulations were less specific, stating that residents had the right to voice grievances without discrimination or reprisal and requiring facilities to promptly resolve grievances.