[Federal Register Volume 77, Number 188 (Thursday, September 27, 2012)]
[Rules and Regulations]
[Pages 59318-59320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-23775]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 51

RIN 2900-AO36


Removal of 30-Day Residency Requirement for Per Diem Payments

AGENCY: Department of Veterans Affairs.

ACTION: Direct final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is taking direct final 
action to amend its regulations concerning per diem payments to State 
homes for the provision of nursing home care to veterans. Specifically, 
this rule removes the requirement that a veteran must have resided in a 
State home for 30 consecutive days before VA will pay per diem for that 
veteran when there is no overnight stay. The intended effect of this 
direct final rule is to permit per diem payments to State homes for 
veterans who do not stay overnight, regardless of how long the veterans 
have resided at the State homes, so that the State homes will hold the 
veterans' beds until the veterans return.

DATES: Effective: This rule is effective on November 26, 2012, without 
further notice, unless VA receives a significant adverse comment by 
October 29, 2012. If significant adverse comment is received, VA will 
publish a timely withdrawal of the rule in the Federal Register.

ADDRESSES: Written comments may be submitted through http://www.regulations.gov; by mail or hand delivery to the Director, 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; or by 
fax to (202) 273-9026. Comments should indicate that they are submitted 
in response to ``RIN 2900-AO36, Removal of 30-Day Residency Requirement 
for Per Diem Payments.'' Copies of comments received will be available 
for public inspection in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., 
Monday through Friday (except holidays). Please call (202) 461-4902 for 
an appointment. (This is not a toll-free number.) In addition, during 
the comment period, comments may be viewed online through the Federal 
Docket Management System at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Harold Bailey, Program Management 
Officer (Director of Administration), VA Health Administration Center, 
Purchased Care (10NB3), Veterans Health Administration, Department of 
Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420, (303) 
331-7551. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: This rule amends part 51 of title 38, Code 
of Federal Regulations, to remove the requirement that a veteran 
receiving nursing home care in a State home must have resided in the 
State home for at least 30 consecutive days before VA will pay per diem 
when that veteran does not stay in the State home overnight. VA pays 
per diem to State homes for veterans who stay elsewhere overnight to 
create a ``bed hold,'' so that the State home reserves the veteran's 
bed until the veteran returns from a temporary absence. Typically, 
these temporary absences arise from a veteran's acute need for a higher 
level of care, such as a period of hospitalization. Temporary absences 
also arise for reasons other than hospital care, such as when a veteran 
travels to visit family members.
    This rule also clarifies in 38 CFR 51.43(c) that VA calculates 
occupancy rate ``by dividing the total number of patients in the 
nursing home or domiciliary by the total recognized nursing home or 
domiciliary beds in that facility.'' This is consistent with current 
practice, and will help ensure that State homes understand our 
methodology.
    The 30-day residency requirement for bed hold per diem payments was 
established in 2009 in 38 CFR 51.43(c), which stated: ``Per diem will 
be paid under Sec. Sec.  51.40 and 51.41 for each day that the veteran 
is receiving care and has an overnight stay. Per diem also will be paid 
when there is no overnight stay if the veteran has resided in the 
facility for 30 consecutive days (including overnight stays) and the 
facility has an occupancy rate of 90 percent or greater. However, these 
payments will be made only for the first 10 consecutive days during 
which the veteran is admitted as a patient for any stay in a VA or 
other hospital (a hospital stay could occur more than once in a 
calendar year) and only for the first 12 days in a calendar year during 
which the veteran is absent for purposes other than receiving hospital 
care.'' See 74 FR 19433.
    In the proposed rule that preceded the addition of Sec.  51.43, we 
stated that the basis for the 30-day residency requirement was that 
``State homes should receive per diem payments to hold beds only for 
permanent residents and only if the State home would likely fill the 
bed without such payments. Allowing payments for bed holds only after a 
veteran has been in a nursing home for at least 30 consecutive days 
(including overnight stays) appears to be sufficient to establish 
permanent residency.'' 73 FR 72402. In addition, the 2009 final rule 
confirmed VA's intent to make the 30-day rule a factor that directly 
affected eligibility for bed hold payments, stating: ``We believe that 
30 days is a minimal amount of time for demonstrating that a veteran 
intends to be a resident at the State home and that the veteran was not 
temporarily placed in the State home.'' 74 FR 19429.
    VA adopted the 30-day residency requirement as the measure for 
determining whether a veteran would likely return to a State home after 
not having stayed there overnight, and in turn whether the State home 
should receive continued per diem payments in the veteran's absence to 
hold the veteran's bed. Through application of this requirement, 
however, VA has come to recognize that duration of residency in a State 
home is not an accurate predictor of whether a veteran is likely to 
return to a State home after a temporary absence. For instance, with 
absences resulting from the veteran's need for hospital care, the 
veteran's health status while hospitalized is actually what determines 
whether and

[[Page 59319]]

when he or she will return to a nursing home level of care at the State 
home. With absences resulting from non-hospital care reasons, the 
veteran in almost all instances communicates an intent to return to the 
State home within a specific period of time, or communicates that he or 
she will not be returning. With both types of absences, we no longer 
find that a veteran's period of residency at a State home is 
determinative as to whether the veteran will likely return to the State 
home. Therefore, we believe the 30-day residency requirement is 
unnecessary in ensuring standards of bed hold per diem payments, and 
are removing this requirement from 38 CFR 51.43(c).
    Based on our experience in applying Sec.  51.43(c) since 2009, we 
believe our determination of whether to pay bed hold per diem for 
veterans who are absent overnight from State homes should be based on 
whether the veteran's bed would otherwise be taken by another resident. 
The best predictor of whether a veteran's bed is likely to be taken by 
another resident during the veteran's absence is the State home's 
occupancy rate, not the length of time the veteran has resided in the 
State home. If a State home has sufficient beds to offer new residents 
so that it need not fill the veteran's bed during the veteran's 
absence, then per diem payments to hold the veteran's bed are not 
needed. If the State home does not have a sufficient number of 
available beds, then per diem payments should be paid for a veteran 
during any absence, subject to the limitations set forth in the rest of 
Sec.  51.43(c) to ensure the bed is reserved for the veteran until he 
or she returns to the State home.
    Thus, the current 90 percent occupancy requirement for State homes 
in Sec.  51.43(c) will serve as the sole criterion to determine whether 
bed hold per diem is paid to State homes, and those payments will 
remain subject to the limitations currently in Sec.  51.43(c) (``Per 
diem also will be paid when there is no overnight stay if * * * the 
facility has an occupancy rate of 90 percent or greater. However, these 
payments will be made only for the first 10 consecutive days during 
which the veteran is admitted as a patient for any stay in a VA or 
other hospital (a hospital stay could occur more than once in a 
calendar year) and only for the first 12 days in a calendar year during 
which the veteran is absent for purposes other than receiving hospital 
care.''). Maintaining the occupancy measure and payment limitations for 
bed hold per diem payments, while removing the residency requirement, 
will help ensure that VA is able to provide stable nursing home care 
via State homes as we intend.
    Additionally, removing the 30-day residency requirement brings VA 
more in line with generally accepted standards of practice for nursing 
home care. VA's other community nursing home care programs (such as the 
contract nursing home care program) do not have a similar residency 
requirement, and VA seeks to have a consistent bed hold policy for 
nursing home care provided to veterans in non-VA facilities. Moreover, 
it is administratively burdensome to track periods of residency in 
State homes across the country, as the total estimated average daily 
census for State homes is over 18,000 veterans in the nursing home 
level of care. This continuous tracking diverts significant VA 
resources, as this information must be monitored for 139 State nursing 
homes 5 days a week at 97 VA Medical Centers (VAMC) of jurisdiction, 
for 52 weeks a year for approximately an hour a day. Assuming a GS-06, 
step 5 grade level employee at each VAMC tracks residency for those 
state nursing homes in its jurisdiction, the estimated cost to VA in 
continuing this practice is $418,000 annually. In comparison, VA 
estimates that 1,095 more per diem payments would be made per year if 
there were no residency requirement, for an estimated increased annual 
cost of $265,000. Based on these calculations, tracking residency, due 
to the current 30-day residency requirement, costs VA nearly 60 percent 
more than the amount of the projected increase in per diem payments 
that VA would make if the 30-day residency requirement were removed. In 
addition, tracking residency does not ensure veteran beds are held as 
we intend and does not contribute to our efforts in providing 
dependable nursing home care to veterans through State homes. Under the 
current rule, State homes also shoulder the administrative burden of 
tracking and reporting the residency dates of veterans, and will likely 
receive a similar benefit from the removal of the 30-day requirement.
    Though in the past we believed a 30-day residency requirement 
helped ensure per diem was paid judiciously, VA now understands that 
the costs of this requirement outweigh possible savings. There have 
been numerous ongoing requests from the State home community and the 
National Association of State Veterans Homes (NASVH) for VA to remove 
the 30-day residency requirement for bed hold per diem payments. 
Because this rule benefits veterans and liberalizes a prerequisite for 
per diem payments, we do not believe that any members of the public are 
adversely affected by this rule.

Administrative Procedure Act

    VA believes this direct final rule is non-controversial, 
anticipates that this rule will not result in any significant adverse 
comment, and therefore is issuing it as a direct final rule. Previous 
actions of this nature, which remove restrictions on VA medical 
benefits to improve health outcomes, have not been controversial and 
have not resulted in any significant adverse comment or objection. 
However, in the ``Proposed Rules'' section of this Federal Register 
publication, we are publishing a separate, substantially identical 
proposed rule document that will serve as a proposal for the provisions 
in this direct final rule if any significant adverse comment is filed. 
(See RIN 2900-AO37).
    For purposes of the direct final rulemaking, a significant adverse 
comment is one that explains why the rule would be inappropriate, 
including challenges to the rule's underlying premise or approach, or 
why it would be ineffective or unacceptable without a change. In 
determining whether an adverse comment is significant and warrants 
withdrawing a direct final rule, we will consider whether the comment 
raises an issue serious enough to warrant a substantive response in a 
notice-and-comment process in accordance with section 553 of the 
Administrative Procedure Act (5 U.S.C. 553). Comments that are 
frivolous, insubstantial, or outside the scope of the rule will not be 
considered adverse under this procedure. For example, a comment 
recommending an additional change to the rule will not be considered a 
significant comment unless the comment states why the rule would be 
ineffective without the additional change.
    Under direct final rule procedures, if no significant adverse 
comment is received within the comment period, the rule will become 
effective on the date specified above. After the close of the comment 
period, VA will publish a document in the Federal Register indicating 
that no significant adverse comment was received and confirming the 
date on which the final rule will become effective. VA will also 
publish a notice in the Federal Register withdrawing the proposed rule.
    However, if any significant adverse comment is received, VA will 
publish in the Federal Register a notice acknowledging receipt of a 
significant adverse comment and withdrawing the direct final rule. In 
the event the direct

[[Page 59320]]

final rule is withdrawn because of receipt of any significant adverse 
comment, VA can proceed with the rulemaking by addressing the comments 
received and publishing a final rule. Any comments received in response 
to the direct final rule will be treated as comments regarding the 
proposed rule. Likewise, any significant adverse comment received in 
response to the proposed rule will be considered as a comment regarding 
the direct final rule. VA will consider such comments in developing a 
subsequent final rule.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
rulemaking, represents VA's implementation of its legal authority on 
this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance is read to conform with this 
rulemaking if possible or, if not possible, such guidance is superseded 
by this rulemaking.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. The State homes that are subject to this rulemaking are 
State government entities under the control of State governments. All 
State homes are owned, operated and managed by State governments except 
for a small number that are operated by entities under contract with 
State governments. These contractors are not small entities. Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers and titles are 
64.005, Grants to States for Construction of State Home Facilities; 
64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home 
Care; 64.015, Veterans State Nursing Home Care; 64.018, Sharing 
Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol 
and Drug Dependence.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on September 10, 2012, for publication.

List of Subjects in 38 CFR Part 51

    Administrative practice and procedure, Claims, Grant programs-
health, Grant programs-veterans, Health care, Health facilities, Health 
professions, Health records, Mental health programs, Nursing homes, 
Reporting and recordkeeping requirements, Travel and transportation 
expenses, Veterans.

    Dated: September 24, 2012.
Robert C. McFetridge,
Director, Office of Regulation Policy and Management, Office of the 
General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 51 as follows:

PART 51--PER DIEM FOR NURSING HOME CARE OF VETERANS IN STATE HOMES

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  38 U.S.C. 101, 501, 1710, 1741-1743, 1745.



0
2. Amend Sec.  51.43(c) by removing ``the veteran has resided in the 
facility for 30 consecutive days (including overnight stays) and'', and 
by adding a sentence at the end of the paragraph to read as follows:


Sec.  51.43  Per diem and drugs and medicines--principles.

* * * * *
    (c) * * * Occupancy rate is calculated by dividing the total number 
of patients in the nursing home or domiciliary by the total recognized 
nursing home or domiciliary beds in that facility.
* * * * *
[FR Doc. 2012-23775 Filed 9-26-12; 8:45 am]
BILLING CODE 8320-01-P