[Senate Report 106-13]
[From the U.S. Government Publishing Office]





                                                        Calendar No. 36

106th Congress                                                   Report
  1st Session                    SENATE                          106-13

=======================================================================



 
             NURSING HOME RESIDENTIAL SECURITY ACT OF 1999

                                _______
                                

                 March 10, 1999.--Ordered to be printed

                                _______


    Mr. Roth, from the Committee on Finance, submitted the following

                              R E P O R T

                         [To accompany S. 494]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, to which was referred the bill 
(S. 494) to amend title XIX of the Social Security Act to 
prohibit transfers or discharges of residents of nursing 
facilities as a result of a voluntary withdrawal from 
participation in the Medicaid program, having considered the 
same, reports favorably thereon without amendment, and 
recommends that the bill do pass.

                       I. SUMMARY AND BACKGROUND

                               A. Summary

    S. 494, as reported by the Committee on Finance, provides 
for the addition of a new section to the transfer and discharge 
requirements for nursing facilities participating in the 
Medicaid program. This new section requires facilities 
withdrawing from Medicaid to continue to care for current 
residents under the terms and conditions of the Medicaid 
program until those residents no longer require care.

                B. Background and Reason for Legislation

    Nearly 90 percent of all nursing homes participate in the 
Medicaid program. Decisions to withdraw from the program are 
very rare and usually result from facilities closing entirely.
    However, there have been a few isolated incidents of 
facilities deciding to convert to a purely private-pay 
clientele and in the process maneuvering to displace current 
residents who rely on Medicaid. Last year, The Wall Street 
Journal documented several cases of nursing home evictions 
across the Nation. One particularly egregious case occurred in 
Tampa, Florida, where a nursing home attempted to evict 52 
Medicaid beneficiaries under the guise of emptying its facility 
for remodeling. Nursing homes are often elderly residents' 
final homes, and abrupt removals can be quite traumatic.
    S. 494 does not interfere with the ability of a nursing 
home to withdraw from Medicaid. But when a still functioning 
facility decides to stop serving Medicaid clients, S. 494 will 
ensure that current residents do not find themselves scrambling 
to identify new care alternatives.

                         C. Legislative History

    S. 494 was introduced on March 2, 1999, by Senators Graham, 
Grassley, Roth, and Moynihan. The bill was considered in a 
Committee on Finance markup on March 4, 1999, and was ordered 
reported favorably by a recorded vote of 12-0, with an 
additional 6 votes in support, by proxy.

                      II. EXPLANATION OF THE BILL

                         Prior and Present Law

    Nursing facilities that choose to participate in the 
Medicaid program must comply with certain requirements relating 
to patients' rights as set forth in section 1919 of the Social 
Security Act. These requirements include transfer and discharge 
procedures. Generally, a nursing facility may not transfer or 
discharge a resident of a participating facility unless the 
transfer or discharge is necessary for the resident's welfare, 
or because the resident's health has improved enough to leave 
the facility, or unless the safety or health of others in the 
facility is endangered, or for non-payment for services, or if 
the facility ceases to operate. Various documentation and 
notice requirements apply to transfers or discharges that are 
permitted under the Medicaid statute. Current law does not 
extend any transfer or discharge protections to Medicaid 
residents or other residents in a nursing facility if the 
facility withdraws from participation in the Medicaid program.

                        Explanation of Provision

    The Committee provision would add a new section to the 
transfer and discharge requirements for nursing facilities 
participating in the Medicaid program. This new section sets 
forth the rights of residents in a facility in a case where the 
facility voluntarily withdraws from participation in the 
Medicaid program, but continues to provide nursing care 
services. The facility may not transfer or discharge any 
resident, whether or not Medicaid recipients, solely because of 
its withdrawal from Medicaid participation. All Medicaid 
participation agreement requirements continue to apply to all 
individuals who were residents of the facility on the day 
before the day the facility withdrew from the Medicaid program, 
until such individuals no longer require care.
    A nursing facility must advise individuals who enter the 
facility after the facility has voluntarily withdrawn from the 
Medicaid program that the facility is not participating in 
Medicaid, and that the facility may discharge the resident from 
the facility if the resident becomes eligible for Medicaid. 
This notice must be given to a new resident orally and in 
writing, and the facility must obtain a written acknowledgment 
of the receipt of such information at the time he or she 
becomes a resident.

                             Effective Date

    Date of enactment.

                    III. BUDGET EFFECTS OF THE BILL

    In compliance with sections 308 and 403 of the 
Congressional Budget Act of 1974, and paragraph 11(a) of Rule 
XXVI of the Standing Rules of the Senate, the following letter 
has been received from the Congressional Budget Office on the 
budgetary impact of the legislation:
                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 8, 1999.
Hon. William V. Roth, Jr.,
Chairman, Committee on Finance, U.S. Senate,
Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 494, the Nursing 
Home Residential Security Act of 1999.

            Sincerely,
                                  Dan L. Crippen, Director.

    Enclosure.

               congressional budget office cost estimate

         S. 494--Nursing Home Residential Security Act of 1999

  (As ordered reported by the Senate Committee on Finance on March 4, 
                                 1999)

    CBO estimates that enactment of S. 494 would not affect 
federal spending. Because the bill would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply. 
S. 494 contains no intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act of 1995 (UNMA) and would not 
affect the budgets of state, local, or tribal governments. The 
bill does contain a private-sector mandate on nursing 
facilities currently participating in the Medicaid program, but 
the cost of that mandate to the affected facilities would be 
small.
    S. 494 would amend Medicaid law to prohibit transfers or 
discharges of residents of nursing facilities as a result of a 
facility's voluntary withdrawal from participation in the 
Medicaid program. The bill would not affect federal Medicaid 
spending because nursing facility residents would be likely to 
continue to receive Medicaid benefits if a facility withdraws 
from the program under both current law and the bill's new 
requirements.
    Current Medicaid law includes a set of requirements 
regarding residents' transfer and discharge rights for nursing 
facilities that participate in the Medicaid program and 
establishes mechanisms that states and the federal government 
may use to punish violation of those requirements. The bill 
would add a new requirement that a participating facility agree 
that in the event that it decides to withdraw from the Medicaid 
program in the future, it would continue to care for residents 
who were in its care at the time. In that instance, the 
facility would be deemed to be participating in the Medicaid 
program and would continue to receive payments for residents 
who were in its care at the time of withdrawal until the legal 
discharge or transfer of those residents. The requirement would 
apply only to facilities that continue to provide nursing 
facility services.
    CBO estimates that this bill would not affect federal 
Medicaid spending. Because nursing facilities are highly 
dependent on Medicaid revenue, it is unlikely that there would 
be a large-scale withdrawal from Medicaid program participation 
under current law. Furthermore, in many states, withdrawal from 
the Medicaid program carries risk of civil monetary penalties 
or other sanction. For instance, some states require Medicaid 
participation as a condition of licensure. Even in the rare 
instance where a facility does withdraw from the program under 
current law, the state or the Health Care Financing 
Administration would likely find new placement for Medicaid-
eligible residents. As national occupancy rates in nursing 
facilities are about 86 percent, it would be unlikely that a 
new placement would not be found.
    CBO finds that the new requirements of S. 494 would be 
considered a private-sector mandate under UMRA. For facilities 
now participating in Medicaid that chose to leave the program, 
the requirement to continue to care for current residents would 
be a new duty they could not avoid, even though it was not part 
of their agreement when they joined the program. Because few 
nursing facilities leave the program, however, and because 
those who did choose to leave would continue to receive 
Medicaid payments, the aggregate cost to affected facilities of 
this mandate would be small.

                       IV. VOTE OF THE COMMITTEE

    In compliance with section 133 of the Legislative 
Reorganization Act of 1946, the Committee states that S. 494 
was ordered reported favorably by a recorded vote of 12-0, with 
an additional 6 votes in support, by proxy.

                          V. REGULATORY IMPACT

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
statement concerning the possible regulatory impact that might 
be incurred in carrying out the bill as reported.

                          Impact on Businesses

    The bill, which has received the endorsement of the nursing 
home industry, requires facilities withdrawing from the 
Medicaid program to continue to comply with Medicaid 
regulations, including those related to nursing home survey and 
certification, until current residents covered by Medicaid no 
longer require care. Accordingly, nursing homes will remain 
subject to Medicaid regulations longer than if they were able 
to immediately withdraw fully from participation in the 
program.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

SOCIAL SECURITY ACT

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TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS-

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SEC. 1919. REQUIREMENT FOR NURSING FACILITIES.

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          (c) Requirements Relating to Residents' Rights.--

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                  (2) Transfer and discharge rights.--

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                    (F) Continuing rights in case of voluntary 
                withdrawal from participation.--
                            (i) In general.--In the case of a 
                        nursing facility that voluntarily 
                        withdraws from participation in a State 
                        plan under this title but continues to 
                        provide services of the type provided 
                        by nursing facilities--
                                    (I) the facility's 
                                voluntary withdrawal from 
                                participation is not an 
                                acceptable basis for the 
                                transfer or discharge of 
                                residents of the facility who 
                                were residing in the facility 
                                on the day before the effective 
                                date of the withdrawal 
                                (including those residents who 
                                were not entitled to medical 
                                assistance as of such day);
                                    (II) the provisions of this 
                                section continue to apply to 
                                such residents until the date 
                                of their discharge from the 
                                facility; and
                                    (III) in the case of each 
                                individual who begins residence 
                                in the facility after the 
                                effective date of such 
                                withdrawal, the facility shall 
                                provide notice orally and in a 
                                prominent manner in writing on 
                                a separate page at the time the 
                                individual begins residence of 
                                the information described in 
                                clause (ii) and shall obtain 
                                from each such individual at 
                                such time an acknowledgment of 
                                receipt of such information 
                                that is in writing, signed by 
                                the individual, and separate 
                                from other documents signed by 
                                such individual.
                        Nothing in this subparagraph shall be 
                        construed as affecting any requirement 
                        of a participation agreement that a 
                        nursing facility provide advance notice 
                        to the State or the Secretary, or both, 
                        of its intention to terminate the 
                        agreement.
                            (ii) Information for new 
                        residents.--The information described 
                        in this clause for a resident is the 
                        following:
                                    (I) The facility is not 
                                participating in the program 
                                under this title with respect 
                                to that resident.
                                    (II) The facility may 
                                transfer or discharge the 
                                resident from the facility at 
                                such time as the resident is 
                                unable to pay the charges of 
                                the facility, even though the 
                                resident may have become 
                                eligible for medical assistance 
                                for nursing facility services 
                                under this title.
                            (iii) Continuation of payments and 
                        oversight authority.--Notwithstanding 
                        any other provision of this title, with 
                        respect to the residents described in 
                        clause (i)(I), a participation 
                        agreement of a facility described in 
                        clause (i) is deemed to continue in 
                        effect under such plan after the 
                        effective date of the facility's 
                        voluntary withdrawal from participation 
                        under the State plan for purposes of--
                                    (I) receiving payments 
                                under the State plan for 
                                nursing facility services 
                                provided to such residents;
                                    (II) maintaining compliance 
                                with all applicable 
                                requirements of this title; and
                                    (III) continuing to apply 
                                the survey, certification, and 
                                enforcement authority provided 
                                under subsections (g) and (h) 
                                (including involuntary 
                                termination of a participation 
                                agreement deemed continued 
                                under this clause).
                            (iv) No application to new 
                        residents.--This paragraph (other than 
                        subclause (III) of clause (i)) shall 
                        not apply to an individual who begins 
                        residence in a facility on or after the 
                        effective date of the withdrawal from 
                        participation under this subparagraph.

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