Calendar No. 36 106th Congress Report SENATE 1st Session 106-13 CMS Library C2-07-13 7500 Security B!vd. Baltimore, Marytend 21244 NURSING HOME RESIDENTIAL SECURITY ACT OF 1999 March 10, 1999.—Ordered tobe printed Mr. Roth, from the Committee on Finance, submitted the following REPORT [To accompany S. 494] [Includingcostestimate ofthe Congressional Budget Office] The Committee on Finance, to which was referred the bill (S. 494) to amend title XIX of the Social Security Act to prohibit transfers or discharges of residents of nursing facilities as a result of a voluntary withdrawal from participation in the Medicaid pro- gram, having considered the same, reports favorably thereon with- out amendment, and recommends that the bill do pass. SUMMARY AND BACKGROUND I. A. Summary S. 494, as reported by the Committee on Finance, provides for the addition of a new section to the transfer and discharge require- ments for nursing facilities participating in the Medicaid program. This new section requires facilities withdrawing from Medicaid to continue to care for current residents under the terms and condi- tions of the Medicaid program until those residents no longer re- quire care. B. Background and Reason for Legislation Nearly 90 percent of all nursing homes participate in the Medic- aid program. Decisions to withdraw from the program are very rare and usually result from facilities closing entirely. However, there have been a few isolated incidents offacilities de- ciding to convert to a purely private-pay clientele and in the proc- 69-010 2 ess maneuvering to displace current residents who rely on Medic- aid. Last year, The Wall Street Journal documented several cases ofnursing home evictions across the Nation. One particularly egre- gious case occurred in Tampa, Florida, where a nursing home at- tempted to evict 52 Medicaid beneficiaries under the guise of emptying its facility for remodeling. Nursing homes are often elder- ly residents' final homes, and abrupt removals can be quite trau- matic. S. 494 does not interfere with the ability of a nursing home to withdraw from Medicaid. But when a still functioning facility de- cides to stop serving Medicaid clients, S. 494 will ensure that cur- rent residents do not find themselves scrambling to identify new care alternatives. C. Legislative History S. 494 was introduced on March 2, 1999, by Senators Graham, Grassley, Roth, and Moynihan. The bill was considered in a Com- mittee on Finance markup on March 4, 1999, and was ordered re- ported favorably by a recorded vote of 12-0, with an additional 6 votes in support, by proxy. n. EXPLANATION OF THE BILL Prior and Present Law Nursing facilities that choose to participate in the Medicaid pro- gram must comply with certain requirements relating to patients' rights as set forth in section 1919 ofthe Social Security Act. These requirements include transfer and discharge procedures. Generally, a nursing facility may not transfer or discharge a resident ofa par- ticipating facility unless the transfer or discharge is necessary for the resident's welfare, or because the resident's health has im- proved enough to leave the facility, or unless the safety or health of others in the facility is endangered, or for non-payment for serv- ices, or ifthe facility ceases to operate. Various documentation and notice requirements apply to transfers or discharges that are per- mitted under the Medicaid statute. Current law does not extend any transfer or discharge protections to Medicaid residents or other residents in a nursing facility ifthe facility withdraws from partici- pation in the Medicaid program. Explanation ofProvision The Committee provision would add a new section to the transfer and discharge requirements for nursing facilities participating in the Medicaid program. This new section sets forth the rights of residents in a facility in a case where the facility voluntarily with- draws from participation in the Medicaid program, but continues to provide nursing care services. The facility may not transfer or dis- charge any resident, whether or not Medicaid recipients, solely be- cause of its withdrawal from Medicaid participation. All Medicaid participation agreement requirements continue to apply to all indi- viduals who were residents ofthe facility on the day before the day the facility withdrew from the Medicaid program, until such indi- viduals no longer require care. 3 A nursing facility must advise individuals who enter the facility after the facility has voluntarily withdrawn from the Medicaid pro- gram that the facility is not participating in Medicaid, and that the facility may discharge the resident from the facility if the resident becomes eligible for Medicaid. This notice must be given to a new resident orally and in writing, and the facility must obtain a writ- ten acknowledgment of the receipt of such information at the time he or she becomes a resident. Effective Date Date ofenactment. BUDGET EFFECTS OF THE BILL III. In compliance with sections 308 and 403 of the Congressional Budget Act of 1974, and paragraph 11(a) of Rule XXVI of the Standing Rules ofthe Senate, the following letter has been received from the Congressional Budget Office on the budgetary impact of the legislation: U.S. Congress, Congressional Budget Office, Washington, DC, March 8, 1999. Hon. William V. Roth, Jr., Chairman, Committee on Finance, U.S. Senate, Washington, DC. Dear Mr. Chairman: The Congressional Budget Office has pre- pared the enclosed cost estimate for S. 494, the Nursing Home Res- idential Security Act of 1999. Sincerely, Dan L. Crippen, Director. Enclosure. ^ . > CONGRESSIONAL BUDGET OFFICE COST ESTIMATE — S. 494 Nursing Home Residential Security Act of1999 (As ordered reported by the Senate Committee on Finance on March 4, 1999) CBO estimates that enactment of S. 494 would not affect federal spending. Because the bill would not affect direct spending or re- ceipts, pay-as-you-go procedures would not apply. S. 494 contains no intergovernmental mandates as defined in the Unfunded Man- dates Reform Act of 1995 (UNMA) and would not affect the budgets of state, local, or tribal governments. The bill does contain a pri- vate-sector mandate on nursing facilities currently participating in the Medicaid program, but the cost of that mandate to the affected facilities would be small. S. 494 would amend Medicaid law to prohibit transfers or dis- charges of residents of nursing facilities as a result of a facility's voluntary withdrawal from participation in the Medicaid program. The bill would not affect federal Medicaid spending because nurs- ing facility residents would be likely to continue to receive Medic- aid benefits if a facility withdraws from the program under both current law and the bill's new requirements. Current Medicaid law includes a set of requirements regarding residents' transfer and discharge rights for nursing facilities that participate in the Medicaid program and establishes mechanisms that states and the federal government may use to punish violation of those requirements. The bill would add a new requirement that a participating facility agree that in the event that it decides to withdraw from the Medicaid program in the future, it would con- tinue to care for residents who were in its care at the time. In that instance, the facility would be deemed to be participating in the Medicaid program and would continue to receive pa3rments for resi- dents who were in its care at the time ofwithdrawal until the legal discharge or transfer of those residents. The requirement would apply only to facilities that continue to provide nursing facility services. CBO estimates that this bill would not affect federal Medicaid spending. Because nursing facilities are highly dependent on Med- icaid revenue, it is unlikely that there would be a large-scale with- drawal from Medicaid program participation under current law. Furthermore, in many states, withdrawal from the Medicaid pro- gram carries risk of civil monetary penalties or other sanction. For instance, some states require Medicaid participation as a condition of licensure. Even in the rare instance where a facility does with- draw from the program under current law, the state or the Health Care Financing Administration would likely find new placement for Medicaid-eligible residents. As national occupancy rates in nursing facilities are about 86 percent, it would be unlikely that a new placement would not be found. CBO finds that the new requirements of S. 494 would be consid- ered a private-sector mandate under UMRA. For facilities now par- ticipating in Medicaid that chose to leave the program, the require- ment to continue to care for current residents would be a new duty they could not avoid, even though it was not part of their agree- ment when they joined the program. Because few nursing facilities leave the program, however, and because those who did choose to leave would continue to receive Medicaid payments, the aggregate cost to affected facilities ofthis mandate would be small. VOTE OF THE COMMITTEE IV. In compliance with section 133 of the Legislative Reorganization Act of 1946, the Committee states that S. 494 was ordered reported favorably by a recorded vote of 12-0, with an additional 6 votes in support, by proxy. V. REGULATORY IMPACT In compliance with paragraph 11(b) ofrule XXVI ofthe Standing Rules of the Senate, the Committee makes the following statement concerning the possible regulatory impact that might be incurred in carrying out the bill as reported. 5 Impact on Businesses The bill, which has received the endorsement of the nursing home industry, requires facilities withdrawing from the Medicaid program to continue to comply with Medicaid regulations, including those related to nursing home survey and certification, until cur- rent residents covered by Medicaid no longer require care. Accord- ingly, nursing homes will remain subject to Medicaid regulations longer than if they were able to immediately withdraw fully from participation in the program. VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED In compliance with paragraph 12 of Rule XXVI of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, exist- ing law in which no change is proposed is shown in roman): SOCIAL SECURITY ACT ijj: H= * ^ * * TITLE XIX—GRANTS TO STATES FOR MEDICAL **ASS*ISTAN*CE PR*OGRA*MS * ^ ^ ^ ^ :i: :)lf: SEC. 1919. REQUIREMENT FOR NURSINGFACILITIES. — (c) Requirements Relating to Residents' Rights. — (2) Transfer and discharge rights. (F) Continuing rights i—n case of voluntary with- drawal FROM PARTICIPAT—ION. (i) In general. In the case of a nursing facility that voluntarily withdraws from participation in a State plan under this title but continues to p—rovide services ofthe typeprovided by nursing facilities (I) the facility's voluntary withdrawal from participation is not an acceptable basis for the transfer or discharge of residents of the facility who were residing in the facility on the day before the effective date of the withdrawal (including those residents who were not entitled to medical assistance as ofsuch day); (II) the provisions of this section continue to apply to such residents until the date of their dis- charge from the facility; and (III) in the case ofeach individual who begins residence in the facility after the effective date of such withdrawal, the facility shall provide notice orally and in a prominent manner in writing on a 6 separate page at the time the individual begins residence ofthe information described in clause fiij and shall obtain from each such individual at such time an acknowledgment ofreceipt ofsuch in- formation that is in writing, signed by the individ- ual, and separate from other documents signed by such individual. Nothing in this subparagraph shall be construed as af- fecting any requirement of a participation agreement that a nursing facility provide advance notice to the State or the Secretary, or both, ofits intention to termi- nate the agreement. fiij IXFORMATIOX FOR XEW RESIDEXTS.—The infor- mation described in this clause for a resident is the fol- lowing: Gj The facility is not participating in the pro- gram under this title with respect to that resident. fll) The facility may transfer or discharge the resident from the facility at such time as the resi- dent is unable to pay the charges of the facility, even though the resident may have become eligible for medical assistance for nursing facility services under this title. (iiij CO—XTIXUATIOX OF PAYMEXTS AXD OVERSIGHT AUTHORITY. Notwithstanding any other provision of this title, with respect to the residents described in clause (ijd), a participation agreement of a facility de- scribed in clause fij is deemed to continue in effect under such plan after the effective date of the facility's voluntary withdrawal fr—om participation under the State plan forpurposes of fij receivingpayments under the State plan for nursing facility services provided to such residents; fllj maintaining compliance with all applica- ble requirements ofthis title; and flllj continuing to apply the survey, certifi- cation, and enforcement authority provided under subsections (g) and (h) (including involuntary ter- mination ofa participation agreement deemed con- tinued under this clause). — fiv) No APPLICATIOX TO XEW RESIDEXTS. This paragraph (other than subclause dllj of clause (ij) shall not apply to an individual who begins residence in a facility on or after the effective date of the with- drawal from participation under this subparagraph. if. lif if if. ^ :if. o CMS Library C2-07-13 7500 Security Blvd. 21^M Saitlrrtore, ^^3ry;•g^d- ^