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Affordable Health Care for America Act: Implications for SNFs

This weekend, the House is reportedly set to vote on their version of healthcare reform – H.R. 3962.  The bill is a “monster”; nearly 2,000 pages long.  The title belies the fact that the Bill doesn’t just attempt to create “affordable health care” – it goes much, much further.  For example, embedded within the hundreds of pages are dozens of new regulations and payment reforms that will fundamentally change the SNF industry.  Important to note, the layers of new requirements are designed to sit “on top of” the already existing layers of regulations that pertain to SNFs. 

As I have done before with all of the healthcare reform bills, I read H.R. 3962, paying special attention to the post-acute provisions contained within.  Below, I have summarized the “significant” provisions that apply directly to SNFs, contained in H.R. 3962.


  • Eliminates the market-basket increase for FY 2010 for all days after 1/1/2010.
  • For FY 2011, market-basket increases are subject to a Productivity Adjustment (offset).  The basis of this formula, which may be amended by the Secretary of DHHS, is a 10 year moving average of the amount of economy wide, private non-farm business, multi-factor productivity.
  • The Secretary is directed to speed-up the case-mix adjustments for 2010 and 2011 using the appropriate re-calibration factor.  This effectively reduces SNF spending by $1.05 billion in the fiscal year (net of any rate increases).
  • Increases the Non-Therapy Ancillary services component by 10%.  The Therapy case-mix component is reduced by 5.5%.  These provisions are effective for all days after 1/1/2010.
  • The Secretary is directed to revise the Non-Therapy Ancillary Services component by 2011 but in so doing, the revisions must be budget neutral.
  • Incorporates a provision of outlier payments for Non-Therapy and Therapy Ancillary Services as an addition or adjustment (positive) based on aggregate costs incurred by a facility for any particular patient, not based on length of stay.  This provision is required to be budget neutral and cannot exceed 2% of total payments projected to be made to SNFs.
  • Directs the Secretary to investigate and provide a report, on how to bundle post-acute payments under Medicare for patients going from an inpatient hospital (acute) to an LTAC, SNF, Home Health Agency, inpatient rehab facility or out-patient rehab facility.  The report is due no later than three years after the legislation in enacted.
  • Extends the Part B therapy cap exception process to 12/31/2011.


  • Requires an SNF to make available to the public (posted and available on request) the names, titles and length of service of all members of the governing body and any person who is an owner, managing employee, director, officer, member or partner.
  • Further requires the disclosure on any person or entity who has a direct or indirect ownership interest (greater than 5%) in the facility’s assets or property by way of a deed, mortgage, note, trust, etc.
  • Requires the Secretary to develop a form and format for submission of this information to the Secretary, inclusive of how frequent submissions should be.  The reporting would be a Condition of Participation in Title 19 and Title 18.
  • Includes note in the text that this reporting or disclosure is in “addition to” and does not replace or reduce, any existing requirements of disclosure or reporting.
  • The required information collected by the Secretary will be published and available to the public within one year after final regulations are promulgated.
  • Requires SNFs to develop a Compliance and Ethics program, no later than one year after the Secretary and OIG develop the regulations for Compliance and Ethics programs, including a model program.  The general requirement is stated as a facility must have a program that is effective in detecting and preventing criminal, civil and administrative violations and promoting quality of care.  The required elements are as follows. 

(I) The organization must have established compliance standards and procedures to be followed by its employees, contractors, and other agents that are reasonably capable of reducing the prospect of criminal, civil, and administrative violations under this Act. (II) Specific individuals within high-level personnel of the organization must have been assigned overall responsibility to oversee compliance with such standards and procedures and have sufficient resources and authority to assure such compliance. (III) The organization must have used due care not to delegate substantial discretionary authority to individuals who the organization  knew, or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil, and administrative violations under this Act. (IV) The organization must have taken steps to communicate effectively its standards and procedures to all employees and other agents,  such as by requiring participation in training programs or by disseminating publications that explain in a practical manner what is required (V) The organization must have taken reasonable steps to achieve compliance with its standards, such as by utilizing monitoring and auditing systems reasonably designed to detect criminal, civil, and administrative violations under this Act by its employees and other agents and by having in place and publicizing a reporting system whereby employees and other agents could report violations by others within the organization without fear of retribution. (VI) The standards must have been consistently enforced through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals responsible for the failure to detect an offense. (VII) After an offense has been detected, the organization must have taken all reasonable steps to respond appropriately to the offense and to prevent further similar offenses, including repayment of any funds to which it was not entitled and any necessary modification to its program to prevent and detect criminal, civil, and administrative violations under this Act. (VIII) The organization must periodically undertake reassessment of its compliance program to identify changes necessary to reflect changes within the organization and its facilities.

  • Creates a Quality Assurance and Performance Improvement Program where the Secretary establishes best practices and standards for SNFs and provides technical assistance to the SNFs on how to meet these standards.  Within 1 year, facilities would be required to submit a plan to the Secretary on the facility will meet such standards and implement the best practices including how such implementation will be coordinated with quality assurance activities.
  • Requires the GAO to conduct a study on SNF undercapitlization taking into account the type of ownership.  The study is to determine whether undercapitlization effects quality of care including staffing and food costs.  The report is to contain recommendations on options for requirements such as liability insurance, surety bonds or minimum capitalization requirements. The report is due to Congress no later than 18 months after the Act is passed.
  • Creates new provisions for the Nursing Home Compare website. This provision also requires the Secretary to update the site with more timely survey information, specifically stated as the State shall submit any results or enforcement action to the Secretary no later than the same is submitted to the facility.  Below is a summary of the requirements.

(i) Information that is reported to the Secretary with regard to Disclosure/Ownership

(ii) Information on the `Special Focus Facility program’ (or a successor program) established by the Centers for Medicare and Medicaid Services, according to procedures established by the Secretary. Such procedures shall provide for the inclusion of information with respect to, and the names and locations of, those facilities that, since the previous quarter (I) were newly enrolled in the program; (II) are enrolled in the program and have failed to significantly improve; (III) are enrolled in the program and have significantly improved; (IV) have graduated from the program; and (V) have closed voluntarily or no longer participate under this title.

(iii) Staffing data for each facility (including resident census data and data on the hours of care provided per resident per day) based on data submitted under subsection (b)(8)(C), including information on staffing turnover and tenure, in a format that is clearly understandable to consumers of long-term care services and allows such consumers to compare differences in staffing between facilities and State and national averages for the facilities. Such format shall include (I) concise explanations of how to interpret the data (such as a plain English explanation of data reflecting `nursing home staff hours per resident day’) (II) differences in types of staff (such as training associated with different categories of staff); (III) the relationship between nurse staffing levels and quality of care; an (IV) an explanation that appropriate staffing levels vary based on patient case mix.

(iv) Links to State internet websites with information regarding State survey and certification programs, links to Form 2567 State inspection reports (or a successor form) on such websites, information to guide consumers in how to interpret and understand such reports, and the facility plan of correction or other response to such report.

(v) The standardized complaint form developed under subsection (f)(8), including explanatory material on what complaint forms are, how they are used, and how to file a complaint with the State survey and certification program and the State long-term care ombudsman program.

(vi) Summary information on the number, type, severity, and outcome of substantiated complaints.

(vii) The number of adjudicated instances of criminal violations by employees of a nursing facility–(I) that were committed inside the facility; (II) with respect to such instances of violations or crimes committed inside of the facility that were the violations or crimes of abuse, neglect, and exploitation, criminal sexual abuse, or other violations or crimes that resulted in serious bodily injury; and

(viii) The number of civil monetary penalties levied against the facility, employees, contractors, and other agents.

(ix) Any other information that the Secretary determines appropriate.

  • The Act includes new cost reporting requirements under which facilities will be required to submit separately, expenditures on direct care staff (wages and benefits) and taking into account, spending on agency staff.  The changes also require the Secretary to establish a new cost report format covering disclosure of spending on Direct Care, Indirect Care, Capital, and Administrative Costs.  The Secretary is further required to make the information available to interested parties on request.
  • The Act requires the Secretary to establish a standardized complaint form to be made available to the State survey agency.  The form is to be made available by the State to any resident, ombudsman, person acting on behalf of the resident or employee of the SNF or representative of the employee.  The State must establish a complaint resolution process that ensures that the complainant will not be retaliated against and that each complaint will be;  a) tracked including notification to the complainant, b) a determination is made regarding the severity of the complaint and the investigation thereof, c) deadlines are in place for responding to the complaint and notifying the complainant of the outcome, d) procedures to ensure that the complainant’s identity remains confidential.
  • The Act also includes specific Whistleblower protections for complaints including a requirement that employee rights to report claims against a facility are protected, are posted.
  • Within two years from the passage of the Act, a SNF must submit to the Secretary, staffing information in a uniform manner determined by the Secretary that identifies; a) type of employee (RN, LPN, Other Personnel), b) resident census and case-mix data, c) information on employee turnover and tenure as well as hours of care provided by each category of employee reported.
  • The Secretary is required to establish a new system for national and state criminal background checks on employees with direct patient access.  There are also provisions included requiring States and facilities to use fingerprinting as a means of background checking (or other measures similarly reliable).
  • The Act redefines and reinterprets, Civil Money Penalties for non-compliance.  In the case of “per instance”, the Secretary is required as follows; a) in the case of a death, the fine may be up to $100,000, b) in the case of actual harm or immediate jeopardy, the fine must be no less than $3,050 and no more than $100,000, c) in all other deficiencies, no less than $250 and no more than $3,050.  With respect to “per day” fines, the Secretary is required as follows; a) in the case of actual harm or immediate jeopardy, no less than $3,050 per day and no more than $25,000, b) in the case of any other deficiency, no less than $250 per day and no more than $3,050.  The Secretary is allowed, in a case of self-reporting and correction, to reduce the forfeiture by up to 50% unless the instance is for a repeat deficiency, the deficiency is widespread, or the harm constitutes immediate jeopardy.
  • The Act creates a pilot Independent Monitor Program to oversee interstate and intrastate chains of nursing facilities. The Secretary is to identify the facilities and to establish the monitoring criteria which is to include or cover items such as ownership, management, distribution of funds for care and facilities, and reviews of compliance/survey activities to determine the causes of poor performance. The chain is required to respond to findings/recommendations from the Monitor within ten days of receipt.  Per the Act, the chain will bear a portion of the costs of the Monitor.
  • The Act includes new provisions for the closure of a nursing facility.
  • The Act requires the Secretary to conduct a study on Nurse Aide training and to determine whether the amount (hours) and content of the training should be revised.
  • The Act requires nursing facilities to implement an ongoing training program of dementia training and abuse prevention training.
  • The Act requires a change to the Medicare and Medicaid Conditions of Participation, requiring all Directors of Food Service to be Certified Dietary Managers or to have equivalent military, academic or other qualifications as specified by the Secretary.

As I indicated, these are the significant provisions contained in the Bill’s text.  There are literally dozens more terms, provisions and interwoven requirements that will undoubtedly impact SNFs should this Bill, as written, become law.  Suffice to say, the message to SNFs is lower Medicare reimbursement and more regulation on top of what already exists.



November 6, 2009 - Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , ,

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