Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                             H.B. 503
Approved for Filing: G. Gunn 6                                     st
                                                                         1 Sub. (Buff)
          6 02-12-24 5:52 PM 6
                  Representative Jefferson S. Burton proposes the following substitute bill:
                       NURSING CARE FACILITY AMENDMENTS
                                       2024 GENERAL SESSION
                                            STATE OF UTAH
                               Chief Sponsor: Jefferson S. Burton
                                  Senate Sponsor: ____________
 6
 LONG TITLE
 General Description:
        This bill amends Medicaid provisions impacting nursing care facilities.
 Highlighted Provisions:
        This bill:
        < Allows a state-owned veterans nursing care facility to obtain a one-time approval
 for up to five total Medicaid certified beds, without the facility first proving bed
 capacity insufficiency or financial viability.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:                                                                                      1 stSub. H.B. 503
        26B-3-311, as renumbered and amended by Laws of Utah 2023, Chapter 306
        26B-3-313, as renumbered and amended by Laws of Utah 2023, Chapter 306
23
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 26B-3-311 is amended to read:
     *HB0503S01*
       1st Sub. (Buff) H.B. 503                                                     02-12-24 5:52 PM
         26B-3-311. Authorization to renew, transfer, or increase Medicaid certified
 programs -- Reimbursement methodology.
         (1) (a) The division may renew Medicaid certification of a certified program if the
 program, without lapse in service to Medicaid recipients, has its nursing care facility program
 certified by the division at the same physical facility as long as the licensed and certified bed
 capacity at the facility has not been expanded, unless the director has approved additional beds
 in accordance with Subsection (5).
         (b) The division may renew Medicaid certification of a nursing care facility program
 that is not currently certified if:
         (i) since the day on which the program last operated with Medicaid certification:
         (A) the physical facility where the program operated has functioned solely and
 continuously as a nursing care facility; and
         (B) the owner of the program has not, under this section or Section 26B-3-313,
 transferred to another nursing care facility program the license for any of the Medicaid beds in
 the program; and
         (ii) except as provided in Subsection 26B-3-310(4), the number of beds granted
 renewed Medicaid certification does not exceed the number of beds certified at the time the
 program last operated with Medicaid certification, excluding a period of time where the
 program operated with temporary certification under Subsection 26B-3-312(3).
         (2) (a) The division may issue a Medicaid certification for a new nursing care facility
 program if a current owner of the Medicaid certified program transfers its ownership of the
 Medicaid certification to the new nursing care facility program and the new nursing care
 facility program meets all of the following conditions:
         (i) the new nursing care facility program operates at the same physical facility as the
 previous Medicaid certified program;
         (ii) the new nursing care facility program gives a written assurance to the director in
 accordance with Subsection (4);
         (iii) the new nursing care facility program receives the Medicaid certification within
 one year of the date the previously certified program ceased to provide medical assistance to a
 Medicaid recipient; and
         (iv) the licensed and certified bed capacity at the facility has not been expanded, unless
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       02-12-24 5:52 PM                                                        1st Sub. (Buff) H.B. 503
 the director has approved additional beds in accordance with Subsection (5).
           (b) A nursing care facility program that receives Medicaid certification under the
 provisions of Subsection (2)(a) does not assume the Medicaid liabilities of the previous nursing
 care facility program if the new nursing care facility program:
           (i) is not owned in whole or in part by the previous nursing care facility program; or
           (ii) is not a successor in interest of the previous nursing care facility program.
           (3) The division may issue a Medicaid certification to a nursing care facility program
 that was previously a certified program but now resides in a new or renovated physical facility
 if the nursing care facility program meets all of the following:
           (a) the nursing care facility program met all applicable requirements for Medicaid
 certification at the time of closure;
           (b) the new or renovated physical facility is in the same county or within a five-mile
 radius of the original physical facility;
           (c) the time between which the certified program ceased to operate in the original
 facility and will begin to operate in the new physical facility is not more than three years,
 unless:
           (i) an emergency is declared by the president of the United States or the governor,
 affecting the building or renovation of the physical facility;
           (ii) the director approves an exception to the three-year requirement for any nursing
 care facility program within the three-year requirement;
           (iii) the provider submits documentation supporting a request for an extension to the
 director that demonstrates a need for an extension; and
           (iv) the exception does not extend for more than two years beyond the three-year
 requirement;
           (d) if Subsection (3)(c) applies, the certified program notifies the department within 90
 days after ceasing operations in its original facility, of its intent to retain its Medicaid
 certification;
           (e) the provider gives written assurance to the director in accordance with Subsection
 (4) that no third party has a legitimate claim to operate a certified program at the previous
 physical facility; and
           (f) the bed capacity in the physical facility has not been expanded unless the director
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        1st Sub. (Buff) H.B. 503                                                     02-12-24 5:52 PM
 has approved additional beds in accordance with Subsection (5).
        (4) (a) The entity requesting Medicaid certification under Subsections (2) and (3) shall
 give written assurances satisfactory to the director or the director's designee that:
        (i) no third party has a legitimate claim to operate the certified program;
        (ii) the requesting entity agrees to defend and indemnify the department against any
 claims by a third party who may assert a right to operate the certified program; and
        (iii) if a third party is found, by final agency action of the department after exhaustion
 of all administrative and judicial appeal rights, to be entitled to operate a certified program at
 the physical facility the certified program shall voluntarily comply with Subsection (4)(b).
        (b) If a finding is made under the provisions of Subsection (4)(a)(iii):
        (i) the certified program shall immediately surrender its Medicaid certification and
 comply with division rules regarding billing for Medicaid and the provision of services to
 Medicaid patients; and
        (ii) the department shall transfer the surrendered Medicaid certification to the third
 party who prevailed under Subsection (4)(a)(iii).
        (5) (a) The director may approve additional nursing care facility programs for Medicaid
 certification, or additional beds for Medicaid certification within an existing nursing care
 facility program, if a nursing care facility or other interested party requests Medicaid
 certification for a nursing care facility program or additional beds within an existing nursing
 care facility program, and the nursing care facility program or other interested party complies
 with this section.
        (b) [The] Except as provided under Subsection (5)(e), a nursing care facility or other
 interested party requesting Medicaid certification for a nursing care facility program or
 additional beds within an existing nursing care facility program under Subsection (5)(a) shall
 submit to the director:
        (i) proof of the following as reasonable evidence that bed capacity provided by
 Medicaid certified programs within the county or group of counties impacted by the requested
 additional Medicaid certification is insufficient:
        (A) nursing care facility occupancy levels for all existing and proposed facilities will
 be at least 90% for the next three years;
        (B) current nursing care facility occupancy is 90% or more; or
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        02-12-24 5:52 PM                                                         1st Sub. (Buff) H.B. 503
         (C) there is no other nursing care facility within a 35-mile radius of the nursing care
 facility requesting the additional certification; and
         (ii) an independent analysis demonstrating that at projected occupancy rates the nursing
 care facility's after-tax net income is sufficient for the facility to be financially viable.
         (c) Any request for additional beds as part of a renovation project are limited to the
 maximum number of beds allowed in Subsection (7).
         (d) The director shall determine whether to issue additional Medicaid certification by
 considering:
         (i) whether bed capacity provided by certified programs within the county or group of
 counties impacted by the requested additional Medicaid certification is insufficient, based on
 the information submitted to the director under Subsection (5)(b);
         (ii) whether the county or group of counties impacted by the requested additional
 Medicaid certification is underserved by specialized or unique services that would be provided
 by the nursing care facility;
         (iii) whether any Medicaid certified beds are subject to a claim by a previous certified
 program that may reopen under the provisions of Subsections (2) and (3);
         (iv) how additional bed capacity should be added to the long-term care delivery system
 to best meet the needs of Medicaid recipients; and
         (v) (A) whether the existing certified programs within the county or group of counties
 have provided services of sufficient quality to merit at least a two-star rating in the Medicare
 Five-Star Quality Rating System over the previous three-year period; [and]
         (B) information obtained under Subsection (9)[.]; and
         (vi) subject to Subsection (5)(e), for a state-owned veterans nursing care facility,
 whether the facility has previously been approved for a Medicaid certified bed increase under
 this Subsection (5).
         (e) For a state-owned veterans nursing care facility that has not previously been
 approved for a certified bed increase under this Subsection (5):
         (i) the facility is exempt from the requirements under Subsection (5)(b); and
         (ii) the director may approve, for that facility location only, up to five total Medicaid
 certified beds.
         (6) The department shall adopt administrative rules in accordance with Title 63G,
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        1st Sub. (Buff) H.B. 503                                                      02-12-24 5:52 PM
 Chapter 3, Utah Administrative Rulemaking Act, to adjust the Medicaid nursing care facility
 property reimbursement methodology to:
        (a) only pay that portion of the property component of rates, representing actual bed
 usage by Medicaid clients as a percentage of the greater of:
        (i) actual occupancy; or
        (ii) (A) for a nursing care facility other than a facility described in Subsection
 (6)(a)(ii)(B), 85% of total bed capacity; or
        (B) for a rural nursing care facility, 65% of total bed capacity; and
        (b) not allow for increases in reimbursement for property values without major
 renovation or replacement projects as defined by the department by rule.
        (7) (a) Except as provided in Subsection 26B-3-310(3), if a nursing care facility does
 not seek Medicaid certification for a bed under Subsections (1) through (6), the department
 shall, notwithstanding Subsections 26B-3-312(3)(a) and (b), grant Medicaid certification for
 additional beds in an existing Medicaid certified nursing care facility that has 90 or fewer
 licensed beds, including Medicaid certified beds, in the facility if:
        (i) the nursing care facility program was previously a certified program for all beds but
 now resides in a new facility or in a facility that underwent major renovations involving major
 structural changes, with 50% or greater facility square footage design changes, requiring review
 and approval by the department;
        (ii) the nursing care facility meets the quality of care regulations issued by CMS; and
        (iii) the total number of additional beds in the facility granted Medicaid certification
 under this section does not exceed 10% of the number of licensed beds in the facility.
        (b) The department may not revoke the Medicaid certification of a bed under this
 Subsection (7) as long as the provisions of Subsection (7)(a)(ii) are met.
        (8) (a) If a nursing care facility or other interested party indicates in its request for
 additional Medicaid certification under Subsection (5)(a) that the facility will offer specialized
 or unique services, but the facility does not offer those services after receiving additional
 Medicaid certification, the director shall revoke the additional Medicaid certification.
        (b) The nursing care facility program shall obtain Medicaid certification for any
 additional Medicaid beds approved under Subsection (5) or (7) within three years of the date of
 the director's approval, or the approval is void.
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        02-12-24 5:52 PM                                                      1st Sub. (Buff) H.B. 503
         (9) (a) If the director makes an initial determination that quality standards under
 Subsection (5)(d)(v) have not been met in a rural county or group of rural counties over the
 previous three-year period, the director shall, before approving certification of additional
 Medicaid beds in the rural county or group of counties:
         (i) notify the certified program that has not met the quality standards in Subsection
 (5)(d)(v) that the director intends to certify additional Medicaid beds under the provisions of
 Subsection (5)(d)(v); and
         (ii) consider additional information submitted to the director by the certified program
 in a rural county that has not met the quality standards under Subsection (5)(d)(v).
         (b) The notice under Subsection (9)(a) does not give the certified program that has not
 met the quality standards under Subsection (5)(d)(v), the right to legally challenge or appeal the
 director's decision to certify additional Medicaid beds under Subsection (5)(d)(v).
         Section 2. Section 26B-3-313 is amended to read:
         26B-3-313. Authorization to sell or transfer licensed Medicaid beds -- Duties of
 transferor -- Duties of transferee -- Duties of division.
         (1) This section provides a method to transfer or sell the license for a Medicaid bed
 from a nursing care facility program to another entity that is in addition to the authorization to
 transfer under Section 26B-3-311.
         (2) (a) A nursing care facility program may transfer or sell one or more of its licenses
 for Medicaid beds in accordance with Subsection (2)(b) if:
         (i) at the time of the transfer, and with respect to the license for the Medicaid bed that
 will be transferred, the nursing care facility program that will transfer the Medicaid license
 meets all applicable regulations for Medicaid certification;
         (ii) the nursing care facility program gives a written assurance, which is postmarked or
 has proof of delivery 30 days before the transfer, to the director and to the transferee in
 accordance with Subsection 26B-3-311(4);
         (iii) the nursing care facility program that will transfer the license for a Medicaid bed
 notifies the division in writing, which is postmarked or has proof of delivery 30 days before the
 transfer, of:
         (A) the number of bed licenses that will be transferred;
         (B) the date of the transfer; and
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        1st Sub. (Buff) H.B. 503                                                       02-12-24 5:52 PM
         (C) the identity and location of the entity receiving the transferred licenses; and
         (iv) if the nursing care facility program for which the license will be transferred or
 purchased is located in an urban county with a nursing care facility average annual occupancy
 rate over the previous two years less than or equal to 75%, the nursing care facili