House Study Bill 156
HOUSE FILE
BY (PROPOSED COMMITTEE ON
HUMAN RESOURCES BILL BY
CHAIRPERSON SMITH)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to nursing facility financial assistance related
2 to certain renovation and construction and regulatory
3 compliance, and providing an effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2004HC 82
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PAG LIN
1 1 Section 1. NEW SECTION. 249K.1 PURPOSE == INTENT.
1 2 The purpose of this chapter is to provide a mechanism to
1 3 support the appropriate number of skilled nursing facility
1 4 beds for the state's citizens and to financially assist
1 5 nursing facilities in remaining compliant with applicable
1 6 regulations. It is the intent of this chapter that the
1 7 administrative burden on both the state and nursing facilities
1 8 be minimal.
1 9 Sec. 2. NEW SECTION. 249K.2 DEFINITIONS.
1 10 As used in this chapter, unless the context otherwise
1 11 requires:
1 12 1. "Complete replacement" means completed construction on
1 13 a new nursing facility to replace a building that was
1 14 previously licensed and certified by the state.
1 15 2. "Department" means the department of human services.
1 16 3. "Iowa Medicaid enterprise" means Iowa Medicaid
1 17 enterprise as defined in section 249J.3.
1 18 4. "Major renovations" means construction or facility
1 19 improvements to a nursing facility in which the total amount
1 20 expended exceeds one million five hundred thousand dollars.
1 21 5. "Medical assistance" or "medical assistance program"
1 22 means the medical assistance program created pursuant to
1 23 chapter 249A.
1 24 6. "New construction" means the construction of a new
1 25 nursing facility which does not replace an existing licensed
1 26 and certified facility and requires the provider to obtain a
1 27 certificate of need pursuant to chapter 135, division VI.
1 28 7. "Nondirect care component" means the portion of the
1 29 reimbursement rate under the medical assistance program
1 30 attributable to administrative, environmental, property, and
1 31 support care costs reported on the provider's financial and
1 32 statistical report.
1 33 8. "Nursing facility" means a licensed, free=standing
1 34 skilled nursing facility.
1 35 9. "Provider" means a current or future owner or operator
2 1 of a nursing facility that provides medical assistance program
2 2 services.
2 3 10. "Rate determination letter" means the letter that is
2 4 distributed quarterly by the Iowa Medicaid enterprise to each
2 5 nursing facility, which is based on previously submitted
2 6 financial and statistical reports from each nursing facility.
2 7 11. "Skilled nursing facility" means any institution,
2 8 place, building, or agency providing for a period exceeding
2 9 twenty=four consecutive hours accommodation, board, and
2 10 nursing services, the need for which is certified by a
2 11 physician, to three or more individuals not related to the
2 12 administrator or owner thereof within the third degree of
2 13 consanguinity who by reason of illness, disease, or physical
2 14 or mental infirmity require continuous nursing care services
2 15 and related medical services, but do not require hospital
2 16 care. The nursing care services provided must be under the
2 17 direction of a registered nurse on a twenty=four=hour=per=day
2 18 basis.
2 19 Sec. 3. NEW SECTION. 249K.3 GENERAL PROVISIONS ==
2 20 INSTANT RELIEF == NONDIRECT CARE LIMIT EXCEPTION.
2 21 1. A provider that constructs a complete replacement,
2 22 makes major renovations to or newly constructs a nursing
2 23 facility may be entitled to the rate relief and exceptions
2 24 provided under this chapter. The total period during which a
2 25 provider may participate in any relief or exception shall not
2 26 exceed ten years. A provider seeking assistance under this
2 27 chapter shall request either instant relief or the nondirect
2 28 care limit exception.
2 29 2. If the provider requests instant relief, the following
2 30 provisions shall apply:
2 31 a. The provider shall submit a written request for instant
2 32 relief to the Iowa Medicaid enterprise explaining the nature,
2 33 timing, and goals of the project and the time period during
2 34 which the relief is requested. The written request for relief
2 35 shall provide adequate details to calculate the estimated
3 1 value of relief including but not limited to all of the
3 2 following:
3 3 (1) The total cost of the project, the estimated annual
3 4 depreciation expenses using generally accepted accounting
3 5 principles, and the estimated useful life based upon existing
3 6 medical assistance and Medicare provisions.
3 7 (2) If interest expenses are included, the general terms
3 8 of the debt service and the estimated annual amount of
3 9 interest expenses.
3 10 b. The following shall apply to the value of relief
3 11 amount:
3 12 (1) If interest expenses are disclosed, the amount of
3 13 these expenses shall be added to the value of relief.
3 14 (2) The calculation of the estimated value of relief shall
3 15 take into consideration the removal of existing assets and
3 16 debt service.
3 17 (3) The calculation of the estimated value of relief shall
3 18 be demonstrated as an amount per patient day to be added to
3 19 the current nondirect care component. The annual patient days
3 20 for this calculation shall be determined based upon budgeted
3 21 amounts or the most recent annual total as demonstrated on the
3 22 provider's Medicaid financial and statistical report.
3 23 (4) The combination of the current nondirect care
3 24 component and the estimated value of relief shall not exceed
3 25 one hundred and twenty percent of the nondirect care median
3 26 for the relevant period.
3 27 c. Instant relief granted under this subsection shall
3 28 begin the first day of the calendar quarter following
3 29 placement of the provider's assets in service.
3 30 d. Instant relief granted under this subsection shall be
3 31 terminated at the time of the provider's subsequent biannual
3 32 rebasing when the submission of the annual cost report for the
3 33 provider includes the new replacement costs and the annual
3 34 property costs reflect the new assets.
3 35 3. If the provider requests the nondirect care limit
4 1 exception, all of the following shall apply:
4 2 a. The nondirect care limit for the rate setting period
4 3 shall be increased to one hundred and twenty percent of the
4 4 median for the relevant period.
4 5 b. The exception period shall not exceed a period of two
4 6 years and shall be requested within sixty days of the release
4 7 of the July 1 rate determination letters following each
4 8 biannual rebasing cycle.
4 9 c. If applicable, the provider shall identify any time
4 10 period in which instant relief was granted and shall indicate
4 11 how many times the instant relief was granted previously.
4 12 Sec. 4. NEW SECTION. 249K.4 SPECIAL CIRCUMSTANCES ==
4 13 RECENT PROJECTS AND PRELIMINARY APPROVAL.
4 14 1. a. The department shall allow a one=time nondirect
4 15 care limit exception for a provider that has completed
4 16 facility replacement and shall include the costs of the
4 17 completed facility replacement in the provider's current
4 18 reimbursement as documented in the financial and statistical
4 19 report submitted for fiscal year 2004.
4 20 b. A provider specified in paragraph "a" may request the
4 21 exception under this subsection within thirty days of the
4 22 effective date of this Act.
4 23 c. An exception approved under this subsection shall be
4 24 counted against the total number of years of relief or
4 25 exceptions allowed a provider under section 249K.3.
4 26 2. a. A provider preparing cost or other feasibility
4 27 projections for a request for relief or an exception pursuant
4 28 to section 249K.3 may submit a request for preliminary
4 29 approval.
4 30 b. The request shall contain all of the information
4 31 required for the type of assistance sought pursuant to section
4 32 249K.3.
4 33 c. The provider shall estimate the timing of the
4 34 initiation and completion of the project to allow the
4 35 department to respond with estimates of both instant relief
5 1 and the nondirect care limit exception.
5 2 d. The department shall respond to a request for
5 3 preliminary approval under this subsection within thirty days
5 4 of receipt of the request.
5 5 Sec. 5. NEW SECTION. 249K.5 ADMINISTRATION ==
5 6 PARTICIPATION REQUIREMENTS.
5 7 1. The Iowa Medicaid enterprise shall administer this
5 8 chapter. The department of human services shall adopt rules,
5 9 pursuant to chapter 17A, to administer this chapter.
5 10 2. In addition to any other factors to be considered in
5 11 determining if a provider is eligible to participate under
5 12 this chapter, the Iowa Medicaid enterprise shall consider all
5 13 of the following:
5 14 a. The history of the provider's regulatory compliance.
5 15 b. The historical access to nursing facility services for
5 16 medical assistance program beneficiaries.
5 17 c. The projected service demand based upon the specific
5 18 geographic area in which the provider is located.
5 19 d. The provider's dedication to and participation in
5 20 quality of care, considering all quality programs in which the
5 21 provider has participated.
5 22 e. The provider's plans to facilitate person=directed
5 23 care.
5 24 f. The provider's plans to facilitate dementia units and
5 25 specialty post=acute services.
5 26 g. The provider's need to obtain regulatory compliance for
5 27 sprinkler systems or heating, ventilation, and air
5 28 conditioning systems.
5 29 3. a. Any relief or exception granted under this chapter
5 30 is temporary and shall be immediately terminated if all of the
5 31 participation requirements under this chapter are not met.
5 32 b. If a provider's medical assistance program or Medicare
5 33 certification is revoked, any existing exception or relief
5 34 shall be terminated and the provider shall not be eligible to
5 35 request subsequent relief or an exception under this chapter.
6 1 4. Following a change in ownership, relief or an exception
6 2 previously granted shall continue and future rate calculations
6 3 shall be determined under the provisions of 441 IAC 81.6(12)
6 4 relating to termination or change of ownership of a nursing
6 5 facility.
6 6 Sec. 6. EFFECTIVE DATE. This Act, being deemed of
6 7 immediate importance, takes effect upon enactment.
6 8 EXPLANATION
6 9 This bill provides for financial assistance to freestanding
6 10 skilled nursing facility providers. A provider may request
6 11 either instant relief, which is a per=patient day amount to be
6 12 added to the current direct care component not to exceed 120
6 13 percent of the nondirect care median for the relevant period,
6 14 or a nondirect care limit exception, which is an increase in
6 15 the nondirect care limit for the relevant period of 120
6 16 percent of the median. The assistance may be requested by a
6 17 provider who constructs a complete replacement, makes major
6 18 renovations, or newly constructs a nursing facility. All
6 19 assistance provided is limited to a maximum of 10 years. The
6 20 bill also provides for a one=time exception for providers who
6 21 have complete facility replacement costs included in their
6 22 fiscal year 2004 financial and statistical reports, and
6 23 provides for the requesting of a preliminary approval for
6 24 providers preparing cost or other feasibility projections.
6 25 The provisions are to be administered by the department of
6 26 human services. The bill takes effect upon enactment.
6 27 LSB 2004HC 82
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