OMH-22-09-00012-A Prior Approval Review for Quality and Appropriateness

9/2/09 N.Y. St. Reg. OMH-22-09-00012-A

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 35

September 02, 2009

RULE MAKING ACTIVITIES

OFFICE OF MENTAL HEALTH

NOTICE OF ADOPTION

 

I.D No. OMH-22-09-00012-A

Filing No. 943

Filing Date. Aug. 12, 2009

Effective Date. Sept. 02, 2009

Prior Approval Review for Quality and Appropriateness

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

Action taken:

Amendment of Part 551 of Title 14 NYCRR.

Statutory authority:

Mental Hygiene Law, sections 7.09, 31.04, 31.05 and 31.23

Subject:

Prior Approval Review for Quality and Appropriateness.

Purpose:

To streamline the process for agencies to obtain OMH project approval.

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

This rule will amend 14 NYCRR Part 551, Prior Approval Review for Quality and Appropriateness, by streamlining the process for agencies to obtain project approval from the Office of Mental Health.

Overview

All programs requiring licensure (e.g., inpatient, community residences, outpatient) by the Office of Mental Health are required to obtain prior approval from the Office before a program can be developed or modified. The current regulatory requirements involve a comprehensive review process that does not necessarily reflect the scope of the proposed action; thus, changes that are relatively ministerial in nature require the same level of review as a more substantial project. The amendments will make better use of agency resources by categorizing projects requiring review into three distinct categories: "Administrative Action", "Comprehensive PAR" and "E-Z PAR". The amendments will ultimately result in a reduction in the amount of time it takes for the Office of Mental Health to render a decision, as well as a reduction in the amount of paperwork necessary to be completed by providers. Ultimately, the streamlined process will allow the agency to more appropriately focus its resources on substantial projects and eliminate or reduce such focus on ministerial projects.

Requirements

Projects categorized as "Administrative Action" will not be subject to the prior approval review specified in Part 551 of Title 14 NYCRR; however, certain projects will require the submission of OMH-prescribed forms prior to the implementation of a proposed action.

Projects in the category of "Comprehensive PAR" review would include those that establish a new program which is not currently licensed by OMH or which has been licensed for less than six months; establishment of licensed psychiatric inpatient beds or expansion or reduction of licensed psychiatric inpatient beds by at least 15 percent of the licensed capacity of that site or by more than 10 beds, whichever is less; a change in sponsor of a program licensed by OMH where the new sponsor does not currently operate a program licensed by OMH or has been licensed for less than six months; closure of a licensed psychiatric inpatient program; capital projects that exceed $600,000 (or a dollar amount determined by the Commissioner based upon average construction cost increases subsequent to 2010), and projects otherwise eligible for E-Z PAR review that are reclassified to Comprehensive PAR review pursuant to the regulation.

Projects classified as E-Z Par review would consist of outpatient program projects submitted by an applicant which currently operates an outpatient program that is currently licensed by OMH including: establishment of a new outpatient program; establishment of a new satellite, relocation of a licensed outpatient program or satellite to a location outside of the program's current county; expansion or reduction of caseload or annual volume of services in a clinic treatment program over any contiguous 12-month period by more than 25 percent; expansion or reduction of the approved caseload or capacity of an outpatient program, excluding clinic treatment programs, over any contiguous 12-month period by more than 10 percent; closing an outpatient program; a substantial change in population served, services provided, or program type; and other projects that may have a substantial impact on outpatient mental health services. Other E-Z PAR projects would include licensed housing projects submitted by an applicant which currently operates a program which has been licensed by OMH including: expansion or reduction of licensed capacity; relocation of licensed housing, including community residences, crisis residences, single room occupancy residences; establishment of licensed housing operated by a business entity; establishment of licensed housing not selected through OMH's request for proposal process; and closure of licensed housing programs. E-Z PAR projects also include inpatient projects that involve expansion or reduction of licensed inpatient beds by more than 5 percent up to 15 percent, or by a maximum of 10 beds, whichever is less; and requests for a waiver of the requirement that the program admit individuals in emergencies. A change of sponsor of a program currently licensed by OMH, when the new sponsor currently operates a program which has been licensed by OMH for at least six months and is in good standing would warrant an E-Z PAR process, as would a significant change in the terms and conditions of an operating certificate and capital projects falling within a prescribed dollar range.

Final rule as compared with last published rule:

Nonsubstantial changes were made in section 551.7(a)(11).

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

Joyce Donohue, NYS Office of Mental Health, 44 Holland Avenue, Albany, NY 12229, [phone], email: [e-mail]

Revised Regulatory Impact Statement

A revised regulatory impact statement is not submitted with this notice because the changes to the final version of the rulemaking are non-substantive. The language in Section 551.7(a)(11), which is reflected in the final, adopted version of the rulemaking, exists in the current version of Part 551. In the Notice of Proposed Rulemaking, OMH had removed certain requirements when a project proposes closure or termination. The agency has decided to use existing language and criteria when a project proposes closure. The changes do not reflect a new concept, nor do they add requirements which had not previously existed.

Revised Regulatory Flexibility Analysis

A revised regulatory flexibility analysis for small business and local governments is not submitted with this notice because the changes to the final version of the rulemaking are non-substantive. The language in Section 551.7(a)(11), which is reflected in the final, adopted version of the rulemaking, exists in the current version of Part 551. In the Notice of Proposed Rulemaking, OMH had removed certain requirements when a project proposes closure or termination. The agency has decided to use existing language and criteria when a project proposes closure. The changes do not reflect a new concept, nor do they add requirements which had not previously existed.

Revised Rural Area Flexibility Analysis

A revised rural flexibility analysis is not submitted with this notice because the changes to the final version of the rulemaking are non-substantive. The language in Section 551.7(a)(11), which is reflected in the final, adopted version of the rulemaking, exists in the current version of Part 551. In the Notice of Proposed Rulemaking, OMH had removed certain requirements when a project proposes closure or termination. The agency has decided to use existing language and criteria when a project proposes closure. The changes do not reflect a new concept, nor do they add requirements which had not previously existed.

Revised Job Impact Statement

A revised job impact exemption is not submitted with this notice because the changes to the final version of the rulemaking are non-substantive and will have no adverse impact upon jobs and/or employment opportunities. The language in Section 551.7(a)(11), which is reflected in the final, adopted version of the rulemaking, exists in the current version of Part 551. In the Notice of Proposed Rulemaking, OMH had removed certain requirements when a project proposes closure or termination. The agency has decided to use existing language and criteria when a project proposes closure. The changes do not reflect a new concept, nor do they add requirements which had not previously existed.

Assessment of Public Comment

The agency received two letters of comment regarding the amendments to Part 551 of Title 14 NYCRR. The issues and responses are below:

Issue: One letter indicated strong support for the concept of streamlining the Prior Approval Review (PAR) process but raised some concerns regarding the Local Governmental Units (LGU) involvement. Specifically, concerns were expressed that changes in service capacity could be processed through the Administrative Action process without LGU input. The writers requested inclusion of a requirement in the Administrative Action process that the form be formally reviewed by the LGU to evaluate the possible impact to the local planning process. The writers also believe that the LGU should have the ability to require that an application processed as an Administrative Action be converted to an E-Z Par review if deemed appropriate, including a 10-day response time for Administrative Action projects.

Response: The LGU will receive an electronic submission of Administrative Action projects at the same time as OMH. Projects categorized as "Administrative Action" will not be subject to the prior approval review specified in Part 551 of Title 14 NYCRR; however, certain projects will require the submission of OMH-prescribed forms prior to the implementation of a proposed action. Therefore, the Administrative Action process is considered a notification process, not a review process. The regulations in Section 551.9(c) specifically provide an opportunity for the LGU to request that OMH reclassify a project for review.

Issue: The response timeframes for LGUs could be problematic. LGUs must respond to Comprehensive PAR applications within 20 days and E-Z Par applications within 10 days or it will be deemed that the LGU has no objection. These timeframes may be impossible for some counties to meet because the issues may have to be raised with the Community Services Board (CSB). Should the CSB meet only once a month, it may be impossible for the LGU to respond in a timely fashion. The writers requested a longer time period for LGU response and further request that the "clock" not begin until such time as OMH has provided the entire submission to the LGU.

Response: One of the goals of the streamlined PAR process is to provide a more timely response to an entity submitting an application. An increase in the amount time for LGU response would be contrary to this goal. However, OMH does recognize that there may be cases where the allotted timeframes may be impossible for the LGU; therefore, OMH included language in the amended regulations which stated that reviewers may request an extension for cause (551.9(b)(1) and (2)). An occasional request from the LGU for an extension based on the CSB example mentioned above would be an illustration of a reasonable request for an extension for cause. In addition, the time spent in review ultimately should be lessened by these amended regulations because the applicant must provide a letter of intent to the LGU at the start of the process, and the LGU must provide a letter of support for such project prior to submission to OMH. Consistent with existing regulation, the timeframes for LGU review begin upon receipt of the packet by the LGU.

Issue: The word "population" is not defined in the regulation, while "caseload" is defined. The writers believe that "population" should be defined to ensure that there is no confusion between the two words. Also, the definition of "caseload" should be further expanded.

Response: There is a distinction between "population" and "caseload" but OMH believes that the term "population" is self evident within the regulation and, therefore, does not require definition. OMH also believes that the definition of "caseload" is sufficient within the regulation and does not require modification.

Issue: The term "special population" should be defined and all changes in "special populations" should be included in the E-Z Par review.

Response: OMH believes that the term "special population" is self-evident and does not require definition. The fact that a program proposes to serve a special population does not necessarily indicate that a particular population has a specialized clinical need or other characteristic that would require enhanced review. Such a determination can be made based upon the description of the special population in the project being proposed.

Issue: Section 551.9(g) should be modified to provide that in cases where OMH proposes a decision contrary to a recommendation of approval or disapproval by the LGU, the Commissioner shall afford the LGU an opportunity for a public hearing and not just an opportunity to request a public hearing.

Response: Mental Hygiene Law § 31.23 provides that the local Health Systems Agency (HSA) has an opportunity to request a public hearing, but it does not provide the LGU the right to request a public hearing. In recognition of the role of the LGU, OMH has previously included an opportunity for the LGU to request a public hearing. The statute as to the HSA provides that, "The commissioner shall not take any action contrary to the advice of the health systems agency for facilities other than family care homes, community residences or residential care centers for adults until he affords an opportunity to the agency to request a public hearing and if so requested, a public hearing shall be held." By regulation, OMH is granting the same right to LGU entities to request a public hearing.

Issue: LGUs should be given the opportunity to notify OMH that the LGU has determined not to submit a letter of support and that it will submit comments on the proposal in the normal course of review.

Response: The LGU will have the right to decide not to submit a letter of support and will have a copy of the application to review within the time period allowed. Extensions for cause are allowable under the regulation.

Issue: Applications submitted without prior consultation should be deemed incomplete and returned to applicant.

Response: Section 551.5(c) of the regulation states that, "The applicant shall consult with the local governmental unit through its director of community services or designee in the county or counties to be served by the project prior to submission of an application to the Office of Mental Health in accordance with this Part." In addition, a letter of support must be submitted by the applicant in order for processing to occur of E-Z Par applications.

Issue: A provision should be added to the regulations which states that projects should be subject to E-Z Par review not only when there is a relocation outside of the area currently served by the program, but also outside of a service area as defined by the LGU. This will ensure LGU input.

Response: The agency feels this issue is addressed sufficiently by mandating that the applicant obtain a letter of support from the LGU and include that letter with the E-Z Par application.

Issue: Under the amended regulations, expansion or reduction of inpatient capacity of less than 5 percent or less than 10 beds (whichever is less), shall be processed as an Administrative Action and not subject to an E-Z Par or Comprehensive Review. The writer stated that the threshold bed levels should be measured over a prior 12-month period in order to avoid the potential for hospitals unbundling their reductions to avoid E-Z Par review.

Response: As stated above, the applicant must obtain a letter of support from the LGU. The LGU would be in the best position to determine if the scenario mentioned above regarding hospitals unbundling their reductions is actually occurring. The LGU could then advise OMH of the situation and request that OMH reclassify the project for review.

Issue: Under the amended regulations, regulatory compliance of existing programs and services will be taken into consideration during reviews of applications. Further, an applicant, who has a current operating certificate with a duration of less than 12 months, or who has had an operating certificate with a duration of less than 12 months within two years of filing the application, must demonstrate the ability to comply with regulatory requirements in currently licensed programs prior to OMH approving an application. The writer stated that it is unclear if these requirements pertain only to OMH-licensed programs or more generally New York State-licensed programs. The writer recommended that the most comprehensive review, the requirements pertain to the latter.

Response: OMH's scope of authority and expertise relates to the operation of mental health services and compliance with OMH regulations. It should be noted, however, that providers are required to demonstrate character and competence under this Part and a pattern of repeated violation of other regulatory authority would certainly be taken into account in determining whether the requisite character and competence are present.

Issue: A provision in the amended regulations which provides for the OMH Commissioner's approval of a project but denial of public funds is outmoded and should be repealed due to the repeal of Medicaid neutrality.

Response: The fact that OMH previously repealed the regulatory language related to Medicaid neutrality has no bearing on this regulatory amendment. In April, 2008, the agency repealed language which stated that in reviewing outpatient projects, the Office of Mental Health shall consider, for projects in which the proposed operating budget includes reimbursement from Medicaid or local assistance, the impact, source, and availability of the State share from such funds. However, there could potentially be a situation where a provider wishes to undertake a project that is worthwhile but which does not qualify for Medicaid or for which there are no other public funds available. The language which gives the OMH Commissioner the right to make a determination to approve a project while denying public funds is found in current regulation. It was not amended in this most recent version, and it is not arbitrary and capricious. Therefore, OMH does not intend to alter the language in the current rulemaking.