HLT-13-10-00005-P Residential Health Care Facility (RHCF) Bed Need Methodology

3/31/10 N.Y. St. Reg. HLT-13-10-00005-P

NEW YORK STATE REGISTER

VOLUME XXXII, ISSUE 13

March 31, 2010

RULE MAKING ACTIVITIES

DEPARTMENT OF HEALTH

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. HLT-13-10-00005-P

Residential Health Care Facility (RHCF) Bed Need Methodology

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of section 709.3 of Title 10 NYCRR.

Statutory authority:

Public Health Law, section 2803(2)

Subject:

Residential Health Care Facility (RHCF) Bed Need Methodology.

Purpose:

Revision of Residential Health Care Facility (RHCF) Bed Need Methodology.

Substance of proposed rule (Full text is posted at the following State website:www.health.state.ny.us):

Proposed changes to subdivision (a) of 10 NYCRR section 709.3 would extend the application of the need methodology to the evaluation of Certificate of Need (CON) applications for the renovation of residential health care facilities (RHCFs), the sale or transfer of RHCF beds between facilities, and changes of ownership of RHCFs that are subject to review by the Public Health Council. The Department of Health expects that this provision will encourage the operators of nursing homes to upgrade their facilities in a manner that converts underused inpatient space to less restrictive forms of care, while modernizing and maintaining space for inpatient beds in numbers that reflect actual bed need in the operators' individual service areas, as identified by the need methodology. The Department believes that the need methodology should be extended to transactions for the renovation, sale and transfer of facilities and beds to discourage the maintenance of excess bed capacity throughout the State and simultaneously encourage the development of less restrictive settings for long-term care.

The proposed amendments would replace the current base year of 2000 with the year 2006, and change the planning target year from 2007 to 2016. In the need methodology set forth in subdivision (d), the several five-year age ranges employed for estimating segments of the population over age 65 would be replaced by the age ranges of 65-74 years and 75 years and older. Estimates of the population aged 0-64, 65-74, and 75 and older for the base year and the planning target year would be derived from projections by the New York State Data Center. The number of functionally dependent individuals age 65 and older would be derived from United States Census Bureau data which identify persons with a self-care limitation as those who reside in the community but report having a condition that makes activities of daily living difficult.

Estimates of needed RHCF beds derived under the amended regulations would continue to include beds needed for dementia patients (e.g., Alzheimer's disease and related disorders) but would no longer include beds for ventilator-dependent patients. This reflects the issuance of a separate need methodology for long-term ventilator beds (10 NYCRR section 709.17) since section 709.3 was last amended. The proposed methodology would also continue to exclude RHCF bed need estimates for special pediatric beds, beds for patients with AIDS, and beds for those in need of long-term rehabilitation for head injury.

Further proposed revisions to subdivision (d) would add the number of long-term care patients served by managed long-term care programs to the factors employed in calculating normative use rates for long-term care services and in estimating the number of persons served by long-term care services overall. The fundamental element of the methodology - the blending of statewide pattern use rates and local utilization rates to derive county-specific bed numbers - would remain unchanged. There would also be no change to the 99 percent imputed occupancy rate used in adjusting initial calculations of bed need and the 97 percent threshold occupancy rate for approval of new beds where need is indicated. The proposed regulations also would retain the provision in subdivision (h) for the consideration of local factors that may indicate a need for additional beds, despite an overall occupancy rate of less than 97 percent in the planning area. These local factors include, but are not limited to:

• The impact of requirements pertaining to the placement of persons with disabilities into the most integrated setting appropriate to their needs;

• The growth and availability of long-term home and community-based services, including other non-institutional residential programs;

• Patient migration patterns that vary from those included in the bed need methodology;

• The health status of residents of the planning area;

• Waiting lists for RHCF admission made up of patients who cannot be served adequately in other settings.

The revised regulation would no longer list the county-specific RHCF bed need numbers derived from the need methodology. It is the Department's intention to post these bed numbers on its website to facilitate ease of access by the public and permit updating of the numbers as new beds come into service or existing beds close through rightsizing or because of other developments.

The proposed rules would continue to provide for a reserve of up to 300 additional RHCF beds for the State as a whole. Subdivision (l) states that these beds may be approved in response to applications to add a single bed or multiple beds to an existing facility, to add an extension unit to an existing facility or to construct a new facility, and only to meet emergency situations or other unanticipated circumstances, such as natural disasters and unexpected changes in population census, migration patterns, or health characteristics.

Text of proposed rule and any required statements and analyses may be obtained from:

Katherine Ceroalo, DOH, Bureau of House Counsel, Regulatory Affairs Unit, Room 2438, ESP, Tower Building, Albany, NY 12237, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

Statutory Authority:

Paragraph (2) of section 2802 of the Public Health Law details the Commissioner of Health's role in the approval of Certificate of Need (CON) applications for the construction of new hospitals and authorizes the Commissioner to approve such applications following review by the State Hospital Review and Planning Council (SHRPC). In addition, paragraph (2)(a) of section 2803 of the Public Health Law authorizes the SHRPC to adopt and amend rules and regulations, subject to the approval of the Commissioner, to implement the purposes and provisions of Article 28 of the Public Health Law. Pursuant to section 2801(1), (2) and (3) of the Public Health Law, a nursing home or residential health care facility falls within the definition of a hospital.

Legislative Objectives:

Article 28 of the Public Health Law seeks to protect and promote the health of the inhabitants of the State by assuring the efficient, accessible, and affordable provision of health services of the highest quality and that such services are properly utilized. Subdivision (2) of section 2802 states that the Commissioner shall not act upon an application for construction until he or she is satisfied as to the public need for the construction at the time and place and under the circumstances proposed. Consistent with this legislative objective, the proposed amendments will ensure that the criteria for determination of public need for construction of new or replacement residential health care facility (RHCF) beds will provide access to nursing home care for New Yorkers, while avoiding excess RHCF bed capacity.

The need methodology set forth in 10 NYCRR section 709.3 is and will continue to be used with respect to establishment applications considered by the Public Health Council (PHC) pursuant to section 2801-a of the Public Health Law and is incorporated by reference in the PHC's RHCF bed methodology under 10 NYCRR section 670.3.

Current Requirements:

Construction projects undertaken by hospitals, nursing homes, clinics and other health care facilities are subject to approval under Article 28 of the Public Health Law. Construction is defined under Article 28 to include the erection or building of a health care facility and the "substantial acquisition, alteration, reconstruction, improvement, extension or modification of a facility, including its equipment. . . ." Such "equipment" includes inpatient beds for hospitals and RHCFs.

The review of public need under Article 28 helps ensure that beds and services are distributed throughout the State in a manner that both provides sufficient access to care and guards against the costs associated with the operation and maintenance of beds in excess of those needed. By limiting the beds in a given area to the number appropriate for the population, the public need methodology also discourages inappropriate admissions to inpatient care. The approval process for construction of RHCF beds is subject to a determination of public need using the need methodology set forth in 10 NYCRR section 709.3.

Needs and Benefits:

The continuing decline of high occupancy rates in nursing homes throughout the State, the absence of significant waiting lists for nursing home placement over the past several years and the low number of patients who are on hospital alternative level of care (ALC) status suggest that the overall framework of the current RHCF bed need methodology remains adequate today. Based on this experience, the Department of Health does not propose to change the major elements of the current RHCF bed need methodology. Rather, the proposed rule changes seek to update section 709.3 to reflect new population census projections and the effects of the continued growth of alternatives to RHCF care.

Proposed changes in subdivision (a) of the regulation would extend the application of the need methodology to the evaluation of Certificate of Need (CON) applications for the renovation of RHCFs, the sale or transfer of RHCF beds between facilities, and changes of ownership of RHCFs that are subject to review by the PHC. The Department expects that this provision will encourage the operators of nursing homes to upgrade their facilities in a manner that converts underused inpatient space to less restrictive forms of care, while modernizing and maintaining space for inpatient beds in numbers that reflect actual bed need in the operators' individual service areas, as identified by the need methodology. The Department believes that the need methodology should be extended to transactions for the renovation, sale and transfer of facilities and beds to discourage the maintenance of excess bed capacity throughout the State and simultaneously encourage the development of less restrictive settings for long-term care.

The proposed amendments would replace the current base year of 2000 with the year 2006, and change the planning target year from 2007 to 2016. In the need methodology set forth in subdivision (d), the several five-year age ranges employed for estimating segments of the population over age 65 would be replaced by the age ranges of 65-74 years and 75 years and older. Estimates of the population aged 064, 65-74, and 75 and older for the base year and the planning target year would be derived from projections by the New York State Data Center. The number of functionally dependent individuals age 65 and older would be derived from United States Census Bureau data which identify persons with a self-care limitation as those who reside in the community but report having a condition that makes activities of daily living difficult.

Further proposed revisions to subdivision (d) would add the number of long-term care patients served by managed long-term care programs to the factors employed in calculating normative use rates for long-term care services and in estimating the number of persons served by long-term care services overall. The fundamental element of the methodology - the blending of statewide pattern use rates and local utilization rates to derive county-specific bed numbers - would remain unchanged. There would also be no change to the 99 percent imputed occupancy rate used in adjusting initial calculations of bed need and the 97 percent threshold occupancy rate for approval of new beds where need is indicated. The proposed regulations also would retain the existing provision of subdivision (h) which permits consideration of local factors that may indicate a need for additional beds, despite an overall occupancy rate of less than 97 percent in the planning area.

Estimates of needed RHCF beds derived under the amended regulations would continue to include beds needed for dementia patients (e.g., Alzheimer's disease and related disorders) but would no longer include beds for ventilator-dependent patients. This reflects the issuance of a separate need methodology for long-term ventilator beds (10 NYCRR section 709.17) since section 709.3 was last amended. The revised methodology would also continue to exclude RHCF bed need estimates for special pediatric beds, beds for patients with AIDS, and beds for those in need of long-term rehabilitation for head injuries.

The revised regulation would no longer list the county-specific RHCF bed need numbers derived from the need methodology. It is the Department's intention to post these bed numbers on its website to facilitate ease of access by the public and permit updating of the numbers as new beds come into service or existing beds close through rightsizing or because of other developments (county bed numbers derived from the methodology have been posted on the Department website concurrent with the publication of these amended rules for public comment.). This practice will also result in access to more up-to-date information on RHCF beds for stakeholders and the general public.

Subdivision (f) of the amended regulation would retain the provision that public need estimates for RHCF beds in New York City shall be obtained from the sum of need estimates for each of the city's five counties, and that the public need for RHCF beds in the counties of Nassau and Suffolk shall be obtained from the sum of the need estimates for each of those two counties.

To help ensure that the revised methodology remains flexible, adequate and timely, the proposed rules would require the Department to conduct an evaluation of the revised need formula by December 31, 2013.

COSTS:

Costs to State Government Other than the Department of Health:

There are no costs to State government other than the Department of Health.

Costs to Local Government:

There are no costs to local governments. For local governments that operate nursing homes, the proposed rules represent merely a change in the existing bed need methodology, with which local governments must already comply.

Costs to Private Regulated Parties:

Because the proposed amendments merely amend existing rules with which nursing homes must already comply, these changes carry no costs for private regulated parties.

Costs to the Department of Health:

There will be no additional costs to the Department of Health because CON review is an established function of the agency.

Local Government Mandates:

The proposed amendments do not impose any new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district or other special district.

Paperwork:

The proposed amendments impose no new reporting requirements, forms or other paperwork.

Duplication:

There are no relevant State or Federal rules which duplicate, overlap or conflict with the proposed amendments.

Alternatives:

The Department considered a repeal of the existing need methodology and its replacement with a completely new formula. However, the continuing decline of high occupancy rates in RHCFs over the past several years and the general absence of long waiting times for RHCF admission in most areas suggested that the current methodology was sound and would be adequate for the coming years, if updated to reflect new population data and continued growth in the availability of alternatives to RHCF care.

Because actual long-term care market areas often involve more than one county, the Department explored the notion of employing a geographical unit other than the county as the standard planning area for section 709.3. However, existing subdivision (j) of the regulation permits the consideration of a service area that includes a long-term care planning area outside of that in which a facility or proposed facility is located. In addition, circumstances outside the individual county (such as bed occupancy rates in counties contiguous to the applicant's county) are among those local factors that can be considered as pertinent to the assessment of public need for a particular application for RHCF beds under subdivision (h) of the existing regulation. The Department concluded that, together, existing subdivisions (h) and (j) give section 709.3 the flexibility to allow consideration, when advisable, of areas other than the county as the standard planning area.

Federal Standards:

The proposed amendments do not exceed any minimum standards of the Federal government. There are no Federal rules affecting CON approval of RHCF beds.

Compliance Schedule:

The proposed rules will take effect upon filing. Because CON applications may be submitted at any time, there is no schedule of compliance.

Regulatory Flexibility Analysis

No Regulatory Flexibility Analysis is required pursuant to section 202-b(3)(a) of the State Administrative Procedure Act. The proposed amendment does not impose an adverse economic impact on small businesses or local governments, and it does not impose reporting, recordkeeping or other compliance requirements on small businesses or local governments.

Rural Area Flexibility Analysis

No Rural Area Flexibility Analysis is required pursuant to section 202-bb(4)(a) of the State Administrative Procedure Act. The proposed amendment does not impose an adverse impact on facilities in rural areas, and it does not impose reporting, recordkeeping or other compliance requirements on facilities in rural areas.

Because rural areas in general have insufficient numbers of RHCF beds, it is not expected that the application of the need methodology to the renovation, transfer and sale of existing beds and facilities as proposed in the amended subdivision (a) will adversely affect RHCFs in rural areas.

Job Impact Statement

No Job Impact Statement is required pursuant to section 201-a(2)(a) of the State Administrative Procedure Act. Because the proposed rule is aimed at maintaining high occupancy in nursing homes, the jobs and employment opportunities associated with such optimum use of residential health care facilities will be affected favorably.