The Department of Public Health’s Determination of Need (DoN) Program recently adopted revised DoN regulations and new DoN guidelines that will impact nursing home providers.
1. The revised DoN regulations (Regulations) took effect on January 27, 2017. All DoN applications filed on or after the 27th will be reviewed under the new Regulations. Applications filed prior to January 27, 2017 will be reviewed under the regulations and guidelines in effect at the time of filing.
2. The DoN Program rescinded all DoN guidelines in effect under the old regulations effective January 27, 2017, and issued several new guidelines effective the same day, including a guideline that continues the moratorium on new nursing home beds.
3. The rescinded guidelines included the Nursing Facility Replacement and Renovation Guideline and the Continuing Care Retirement Community Guideline, both of which contained exemptions from the bed need moratorium. Neither of these guidelines were replaced or updated.
4. The newly enacted guidelines are Community Health Planning, Community-Based Health Initiative Planning, Health Priorities, and Equipment and Services. In general, these guidelines reflect the DoN Program’s emphasis on (i) an applicant’s engagement is community-based health that begins before an application is submitted and continues after approval, (ii) the role of DoN in improving social determinates of health for vulnerable populations, and (iii) the continued regulation of certain technologies and services (e.g., MRI and radiation therapy).
5. The DoN Program’s current policy on acquisition and use of out-of-service nursing home beds, which previously was covered by the Nursing Facility Replacement and Renovation Guideline, is unknown. The DoN Program may treat reactivated out-of-service beds as new beds subject to the moratorium, or otherwise limit the use of out-of-service beds. Providers considering the purchase of out-of-service beds will proceed at their own risk until the DoN Program clarifies its policy on this issue.
6. The Regulations introduce a new type of nursing home renovation project called a “Conservation” project. A Conservation project must “Sustain” or “Restore” a health care facility for its designated purpose, and to its original functionality. Examples of work that “Sustain” a facility include roof replacement, refinishing of walls, HVAC repair/replacement, replacement of carpeting and “similar kinds of work”.
“Restore” means to return a facility to such a condition that it may be used for its original intended purpose and function. An example is a project that will bring the facility into compliance with federal, state, or local safety or building requirements.
Conservation projects are required to meet only three (3) of the six (6) DoN evaluation Factors under the Regulations. The three Factors that must be met are:
a. Compliance (requires applicant to be in compliance with applicable federal, state and local laws);
b. Financial Feasibility and Reasonableness of Expenditures (requires applicant to engage independent certified public accountant to review the applicant’s financial records and financial analysis of the project, and then provide written assurance to the DoN Program that the project is financially feasible and within the applicant’s capability); and
c. Community-Based Health Initiative (requires applicant to be involved in identifying and funding a community-based health project).
7. Nursing home renovation/construction projects that do not qualify as Conservation projects will undergo full DoN review. Applicants undergoing full review must, amongst other requirements, engage in extensive planning with the community, and demonstrate “need” for the project by the facility’s “Patient Panel”. “Patient Panel” means the patients and residents served by the facility during the 36-month period that preceded filing of the application. The term “need” is not defined. We do not yet know whether the DoN Program will require a nursing home applicant to defend its licensed bed quota by demonstrating a continued “need” for its licensed beds.
All of the guidelines, as well as the new DoNapplication form, can be found on the DoN Program website.
If you would like to discuss the impact of the new Regulations on your circumstances, please contact Ruselle W. Robinson or Gerald J. Billow.
This Alert is provided for information purposes only, and does not constitute legal advice. According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2017. Posternak Blankstein & Lund LLP. All rights reserved.
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