Pa. Code tit. 55, pt. III, ch. 1181, subch. D, APPEALS OF ADVERSE DETERMINATIONS, app O
I. Federal Requirements. OBRA-87 requires the Department to implement six (6) specified remedies with respect to providers that are not in compliance with the provider participation requirements established by the Act:
1. Denial of payment under the State Plan with respect to new admissions.
2. Civil Monetary Penalties, assessed and collected with interest, for each day a provider facility is or was out of compliance with specified requirements under the Act.
(The Act provides for other civil monetary penalties against individuals which are to be administered by Federal agencies. (42 U.S.C.A. §§ 1320a-7a, 1396r(b)(3)(B)(ii).
3. Appointment of Temporary Management to oversee operations in the event of an orderly closure of the facility or while improvements are made in order to bring the facility into compliance with the Act's requirements.
4. Authority, in the case of an emergency, to close the facility and/or to transfer the residents to another facility. (42 U.S.C.A. § 1396r(h)(2)(A))
5. Denial of payment for new admissions of any provider facility which has not come into compliance with specified requirements of the Act within 3 months after the date on which that facility is found to be out of compliance. (42 U.S.C.A. § 1396r(h)(2)(C))
6. Denial of payment for new admissions and continuous monitoring until the Department is satisfied that the facility will remain in compliance as to a facility which, on 3 consecutive standard surveys, has been found to have provided substandard quality of care. (42 U.S.C.A. § 1396r(h)(2)(D))
In addition, the Act permits the States to implement additional remedies, such as directed plans of correction. (42 U.S.C.A. §§ 1396r(h)(1), 1396r(h)(2)(A))
II. Current State Law. Closure of Facilities and Removal of Jeopardy to Resident Health and Safety. Under current State law, the Department of Health is authorized to close nursing facilities (other than ICFs/MR) in the event of emergencies and, where necessary, to require the transfer of residents to other nursing facilities and take any other steps required to remove jeopardy to resident health and safety (35 P. S. §§ 448.814-448.819). The Department of Public Welfare provides limited payment in such situations (55 Pa. Code § 1181.58). Both Departments are required by law to coordinate their activities in such a situation (71 P. S. § 181), and such coordination can include delegation by the Department of Health to Department of Public Welfare staff to perform duties ordinarily assigned to staff of the Department of Health. The Department of Public Welfare has determined that these existing provisions of State law are sufficient to comply with the requirement that the State have the authority, in the case of an emergency, to close a provider facility and/or to transfer residents to other facilities, as required by 42 U.S.C.A. § 1396r(h)(2)(A)(iv). Therefore, no new statutes or regulations are required to meet this provision of the Act.
Denial of Payments for New Admissions. Under current Department regulations, the Department may terminate or suspend a provider facility's participation in the MA Program (55 Pa. Code § 1101.73 and 1101.77). This includes termination or suspension of payments pending appeals (55 Pa. Code §§ 1101.73 and 1101.77(c)). Such action may be taken if the Department determines that the provider facility has failed to comply with any requirements of 55 Pa. Code Chapters 1101 and 1181, including the requirements that such facilities conform with the requirements established by OBRA-87 (55 Pa. Code §§ 1101.77(a)(1) and 1181.41(3)). The Department may also preclude admissions of certain applicants whom the Department determines cannot be adequately served by the facility because of the facility's noncompliance with certain Program standards (55 Pa. Code §§ 1181.82 and 1181.548(3)). In addition, the Public Welfare Code authorizes the Department to make MA payments to nursing facilities subject to their meeting the requirements established by Title XIX of the Social Security Act for participation in the MA Program (62 P. S. § 443.1). Under this existing authority, the Department has precluded payments for new admissions pending correction of compliance deficiencies as an intermediate sanction. In addition, the Department of Health is authorized to preclude a facility from admitting additional patients as part of a plan of correction of licensing violations. The Department has determined that this existing authority is sufficient to comply with the requirement that the State have the authority to deny payments for new admissions at provider facilities determined to be out of compliance with OBRA-87 standards, as required by 42 U.S.C.A. § 1396r(h)(2)(A)(i), (C) and (D). Therefore, no new statutes or regulations are required to meet such provisions of the Act.
Monitoring Provider Operations to Assure Compliance. Under existing Department regulations, the Department has the authority to monitor provider facility operations to review compliance with Program requirements and to preclude the participation of provider facilities which are not in compliance (55 Pa. Code §§ 1101.71, 1101.77 and 1181.83). The Department may also preclude the re-enrollment of a terminated provider until such time as it is satisfied that there will be no repetition of the violations which led to the provider's termination (55 Pa. Code § 1101.82). In addition, the Department of Health is authorized to monitor facility compliance with the requirements of applicable State and federal regulations (35 P. S. § 448.813). The Department has determined that these existing provisions of State law are sufficient to comply with the requirement that the State have the authority to monitor a provider facility in order to determine that the facility will remain in compliance with OBRA-87, as required by 42 U.S.C. § 1396 r(h)(2)(D)(ii). Therefore, no new statutes or regulations are required to meet this provision of the Act.
Civil Monetary Penalties. Under existing Department regulations, the Department has the authority to terminate or suspend provider facilities' participation in the MA Program, including the suspension of payments pending appeals. Under this existing authority, the Department has imposed administrative monetary penalties on providers as an alternative to termination. The Department has also utilized statistical samples, under 55 Pa. Code § 1101.83(a), to determine restitution for services rendered contrary to Program requirements. The Department of Health is also authorized to impose civil monetary penalties in cases where provider facilities fail to promptly correct serious deficiencies which are also licensure requirements (35 P. S. § 448.817(b)). The Department has determined that these existing provisions of State law are sufficient to comply with the requirement that the State have the authority to impose civil monetary penalties on provider facilities found to be out of compliance with Program requirements, as required by 42 U.S.C.A. § 1396r(h)(2)(A)(ii). Therefore, no new statutes or regulations are required to meet this provision of the Act.
Appointment of Temporary Management and Directed Plans of Correction. Under existing State law, the Department of Health may petition the courts for the appointment of a temporary manager or master to oversee facility operations for a specified period of time or until violations of licensing standards or patterns of noncompliance are corrected and may also direct specific plans of correction for the facility (35 P. S. § 448.814). The Department of Public Welfare has the authority to terminate or suspend provider facilities' participation in the MA Program, including the suspension of payments pending appeals. Under this existing authority, the Department can, as a condition for the continuation of a provider agreement, require providers to permit the imposition of temporary management to oversee the operation of the facility and to assure the health and safety of the facility's residents and can direct specific plans of correction. The Department can also petition the courts for the appointment of a receiver in appropriate cases, Tate v. P.T.C., 410 Pa. 490, 190 A.2d 316 (1963) (Receivers may be appointed to manage solvent as well as insolvent entities in appropriate cases); or, for injunctive relief to require the facility to conform with OBRA-87 requirements, Rupel v. Bluestein, 280 Pa. Super. 65, 421 A.2d 406 (1980) (Courts of equity may prevent or restrain the commission of acts contrary to law and prejudicial to the rights of individuals). The Department has determined that these existing provisions of State law are sufficient to comply with the requirement that the State have the authority to appoint temporary management to oversee facility operations and to assure the health and safety of residents in appropriate cases where such temporary management is needed during the closure of a facility or in order to assure necessary improvements to bring the facility into compliance with OBRA-87 standards, as required by 42 U.S.C.A. § 1396r(h)(2)(A)(iii). Therefore, no new statutes or regulations are required to meet this provision of the Act.
Other Remedies. Any person or entity knowingly violating any of the Department's rules and regulations with respect to the MA Program can be prosecuted under 62 P. S. § 483; and, if convicted, they shall be guilty of a misdemeanor and shall be sentenced to pay a fine not exceeding $100, or to undergo imprisonment not exceeding 6 months, or both. If a provider or the owner, agent, or employe of a provider is convicted of such a crime, the Department can preclude the participation of the provider and any other convicted person(s) in the MA Program for a period of 5 years (55 Pa. Code § 1101.77(b)(3)).
III. Criteria for the Application of Remedies. The Act requires the Department to provide for the enforcement of the OBRA-87 facility participation standards through the use of the remedies specified by the Act at 42 U.S.C. § 1396 r(h)(2) and the use of the Department's authority to terminate the facility's participation in the MA Program and to administer the Program (42 U.S.C. § 1396 r(h)(1)). The Act vests the Department with broad discretion in the use of these remedies and other methods in order to provide the Department with the greatest flexibility to assure the health and safety of facility residents, to minimize the time between the identification of violations and the imposition of remedies, and to effectively deter and correct deficiencies.
The Act, however, directs the Department with respect to the application of certain remedies; and, where such direction exists, the Department shall apply the remedies as required by the Act. The Act requires the Department to impose incrementally more severe fines for repeated or uncorrected deficiencies; requires the Department to deny payment for new admissions in cases where providers fail to promptly correct deficiencies or have been found on 3 consecutive standard surveys to provide substandard quality of care; and requires the Department to monitor facilities which have been found on 3 consecutive standard surveys to provide substandard quality of care (42 U.S.C.A. §§ 1396r(h)(2)(A), (C) and (D).
Effective Date and Basis for the Imposition of Remedies. While the Act focuses on the determination of provider facility compliance through the use of the survey and certification process, it permits the Department to impose most of the remedies required by the Act even where the Department finds noncompliance through some other method. Under current State law and regulations, the Department and the Department of Health can take action whenever they determine that a facility is not in compliance with applicable law.
Since the survey and certification process required by OBRA-87 is not yet in place due to delays in the required federal training program, the Department cannot presently make a determination that a provider facility has been found to have provided substandard quality of care on 3 consecutive standard surveys, pursuant to 42 U.S.C.A. § 1396r(h)(2)(D), since no such surveys are presently being conducted. The imposition of this mandatory remedy must therefore be delayed until the survey process is in place. This limitation does not preclude or prevent the Department from monitoring provider facilities as already permitted under State laws and regulations or from utilizing other available remedies to assure continued provider facility compliance with OBRA-87 standards.
The Department will begin to apply and impose the sanctions required by OBRA-87 immediately, along with any other remedies otherwise available under State law and regulations. Application of these remedies will not be restricted to the survey and certification process. The Department may cite a facility for violations of applicable OBRA-87 standards and may require the provider facility to show cause why any of these remedies should not be imposed at any time. The Department shall continue to coordinate its efforts with those of other agencies involved in protecting the health, safety and welfare of provider facility residents.
Termination of Facility Participation in the Program. A provider facility shall be terminated from participation in the MA Program in those cases where termination is required by Program regulations or otherwise by law (e.g., when such termination is directed by federal authorities pursuant to 42 U.S.C.A. 1320a-7 or when the provider is convicted of a Program-related crime or when the provider's license is suspended or revoked). A provider facility shall be terminated from participation in the MA Program as otherwise permitted by Program regulations whenever the provider facility has not shown cause for and agreed to the application of another remedy provided for in this appendix or otherwise in State law and regulations, including the application of the mandatory remedies required by 42 U.S.C.A. § 1396r(h)(2)(C)-(D). A provider facility shall be terminated from participation in the MA Program in any case in which the Department determines that compliance with Program standards and conditions of participation can most effectively be achieved by terminating the facility's participation, including those cases in which the facility has a history of repeated noncompliance with Program standards or conditions of participation for reasons within the control of the facility or its owners or where the facility or its owners have knowingly violated Program standards or conditions of participation or any Program regulation.
Closure of Facilities and Transfer of Residents and Intervention to Cure Immediate Threats to Resident Health and Safety. In the event of an emergency, a provider facility shall be closed and its residents transferred to other facilities, as provided by Department regulations and as determined by the Department of Health in cooperation with the facility. All facilities are required by law to notify the Department of Health in the event of any intended closure and that Department is authorized to require closures in order to protect residents' health and safety (28 Pa. Code §201.23). Provider facilities must also notify the Department of Public Welfare of any impending strike or emergency requiring resident transfers (55 Pa. Code § 1181.58). The Department of Public Welfare shall coordinate with the Department of Health in cases where there is a finding that there are deficiencies which immediately jeopardize the health and safety of residents to take immediate action to remove the jeopardy either by correcting the deficiencies, by transferring the residents, or by closing the facility temporarily or permanently. A provider facility's participation in the MA Program is not automatically terminated because of closures or transfers of residents in the case of an emergency.
Temporary Management. The appointment of temporary management will be required to oversee the operation of a provider facility and to assure the health and safety of the facility's residents in the following six (6) cases:
(1) Where the facility, after notice by the Department or by the Department of Health of a violation of a Program standard and the acceptance of a plan of correction submitted by the facility, has failed to bring the facility into compliance in the time specified in the plan of correction (even in a case where the facility has determined in the interim to close);
(2) Where the facility has demonstrated a pattern of episodes of noncompliance such as would convince a reasonable person that any correction of violations would be unlikely to be maintained (even in a case where the facility has determined to close);
(3) Where the facility has failed to submit a plan of correction within thirty (30) days of notice of violations from the Department or the Department of Health (even in a case where the facility has determined to close);
(4) Where persons responsible for the facility's management are disqualified from participation in the Program;
(5) Where persons responsible for the facility's management are otherwise unable to perform and the facility has certified to the Department that it requires a temporary manager pending the hiring of new personnel; or,
(6) Where the facility has been denied renewal of its license and that determination has been timely appealed to the licensing agency (the grant of a provisional license shall not be construed as a denial of renewal of a license).
Civil Monetary Penalties. Where the Department determines that a facility is out of compliance with any requirements of 42 U.S.C. § 1396 r(b)-(d) and such noncompliance could have been prevented by the provider, the Department may require the facility to make payment at a rate of $100 per violation per day of noncompliance, plus interest at the legal rate, until paid; however, if the provider unreasonably fails to correct any such deficiency within ten (10) days of notice thereof (including notice from its own records or staff), then the rate shall be increased to $500 per violation per day of delayed compliance, plus interest at the legal rate, until paid.
Where the Department determines that a provider facility, within sixty (60) days, is again out of compliance with the same requirement of 42 U.S.C.A. § 1396r(b)-(d) as to which the Department has previously sought a civil monetary penalty and such repeated noncompliance could have been prevented by the provider, the Department may require the facility to make payment at a rate of $200 per violation per day of noncompliance, plus interest at the legal rate, until paid; however, if the provider unreasonably fails to correct any such deficiency within ten (10) days of notice thereof (including notice from its own records or staff), then the rate shall be increased to $500 per violation per day of delayed compliance, plus interest at the legal rate, until paid.
With respect to deficiencies involving screening, services or notices required for residents, the Department shall deem each resident that failed to receive the required notice or service or screening to be a separate violation.
The provider shall be held liable for violations caused by the acts and omissions of its officers, agents and employes; however, the provider shall not automatically be held liable for violations caused by the criminal acts of such persons, but may be liable in cases where the provider is also liable for such acts. Where the Department determines that a provider facility is knowingly out of compliance with any Program regulation or requirement, it shall refer the matter to the Office of Attorney General for review as to possible prosecution under the Public Welfare Code or other applicable laws, as well as, where appropriate, to relevant licensing agencies.
Denial of Program Payment for New Admissions. The Department will require a provider facility to waive Program payments with respect to new admissions (either in general or limited to those requiring certain kinds or levels of care):
(1) Where the provider facility has been out of compliance with any requirement of 42 U.S.C.A. § 1396r(b)-(d) for a period of 3 months after the date the facility is found to be out of compliance with any such requirement and continues to be out of compliance;
(2) Where the provider facility has been found on 3 consecutive standard surveys conducted under 42 U.S.C.A. § 1396r(g)(2) to have provided substandard quality of care and the Department has not made a subsequent determination that the facility is or will remain in compliance with the requirements of 42 U.S.C.A. § 1396r(b)-(d);
(3) Where the Department has determined that the facility is not currently in compliance with requirements of 42 U.S.C.A. § 1396r(b)-(d) and is not able to provide services in compliance with the requirements of 42 U.S.C.A. § 1396r(b)-(d) for such additional residents;
(4) Where the Department determines that the facility is not able to provide services in compliance with the requirements of 42 U.S.C.A. § 1396r(b)-(d) for such additional residents; or,
(5) Where the Department has not approved the admission of such additional residents through the pre-admission screening processes established by law.
Monitoring Facilities With Repeated Substandard Care. Where a provider facility has been determined on 3 consecutive standard surveys conducted under 42 U.S.C.A. § 1396r(g)(2) to have provided substandard quality of care, the Department shall require the facility to permit the Department to monitor the facility, consistent with the requirements of 42 U.S.C.A. §§ 1396r(g)(4)(B) and (h)(2)(D)(ii), until the facility has demonstrated to the satisfaction of the Department that it is in compliance with the requirements of 42 U.S.C.A. § 1396r(b)-(d) and that it will remain in compliance with such requirements. Nothing in this paragraph shall be construed to limit the Department's rights to monitor provider facility operations as required by 42 U.S.C.A. § 1396r(g)(4)(B) or as otherwise permitted by law or otherwise.
IV.Relationship of Remedies and Rights During Appeals. When the Department determines that a provider facility is subject to the remedies discussed in this appendix, it will issue a notice to the provider facility, as required by 42 CFR 431.154, of the Department's intent to take action and requesting the provider for a response to inform the Department as to any errors in the Department's findings, as well as with respect to the appropriate remedy. If the provider facility fails to respond to such advance notice, the Department will terminate the provider facility's participation in the MA Program by a subsequent notice, effective as of the date specified in the advance notice. If the provider does timely respond to the advance notice, the Department will consider the information submitted and will advise the provider facility of the Department's decision with respect to the matter in a subsequent notice to be issued prior to the effective date of any termination.
The Department's advance notice will include alternative remedies to termination which the Department will consider, which alternatives shall be based on the criteria in this appendix. If the provider facility agrees to the suggested alternative remedy, the Department shall enter an order permitting the provider facility's continued participation in the Program subject to the alternative remedy. Such an order shall require compliance with the alternative remedy even though the provider may still be contesting the basis for the Department's findings and determination; however, such an order shall not require the provider to make payment of any civil monetary penalty until and unless the Department's determination is sustained by a final order.
If the provider facility's appeal of the Department's determination is sustained by a final order, the provider facility may obtain payment for residents admitted to the facility after the effective date of any limitation on new admissions, as permitted by such final order, under 55 Pa. Code § 1101.77(c)(3)(i). The costs of providing temporary management pursuant to 42 U.S.C.A. § 1396r(h)(2)(iii) are borne by the Department.
Pa. Code tit. 55, pt. III, ch. 1181, subch. D, APPEALS OF ADVERSE DETERMINATIONS, app O