[Federal Register Volume 82, Number 141 (Tuesday, July 25, 2017)]
[Rules and Regulations]
[Pages 34408-34416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15519]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP06


Ensuring a Safe Environment for Community Residential Care 
Residents

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) adopts as final, with 
changes, a proposed rule governing the approval of a community 
residential care facility (CRC). The final rule prohibits a CRC from 
employing an individual who has been convicted in a court of law of 
certain listed crimes within 7 years of conviction, or has had a 
finding within 6 months entered into an applicable State registry or 
with the applicable licensing authority concerning abuse, neglect, 
mistreatment of individuals or misappropriation of property. The CRC is 
required to conduct an individual assessment of suitability for 
employment for any conviction or finding outside either the 7 year or 6 
month parameters. The CRCs is also required to develop and implement 
written policies and procedures that prohibit mistreatment, neglect, 
and abuse of residents and misappropriation of resident property. The 
CRC must report and investigate any allegations of abuse or 
mistreatment. The CRC must also screen individuals who are not CRC 
residents, but have direct access to a veteran living in a CRC. In 
addition, we are amending the rule regarding the maximum number of beds 
allowed in a resident's bedroom. VA published the proposed rule on 
November 12, 2015, and we received four public comments. We also 
received correspondence from a federal agency with recommendations. 
This final rule responds to public comments and feedback from that 
federal agency.

DATES: This rule is effective on August 24, 2017.

FOR FURTHER INFORMATION CONTACT: Dr. Richard Allman, Chief Consultant, 
Geriatrics and Extended Care Services (10P4G), Veterans Health 
Administration, Department of Veterans Affairs, 810 Vermont Ave. NW., 
Washington, DC 20420, (202) 461-6750. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: VA is authorized under 38 U.S.C. 1730 to 
assist veterans by referring them for placement, and aiding veterans in 
obtaining placement, in a community residential care facility (CRC). A 
CRC is a form of enriched housing that provides health care supervision 
to eligible veterans who do not need hospital or nursing home care, but 
who, because of medical, psychiatric and/or psychosocial limitations as 
determined through a statement of needed care, are unable to live 
independently and have no suitable family or significant others to 
provide the needed supervision and supportive care. VA maintains a list 
of approved CRCs. The cost of community residential care is financed by 
the veteran's own resources. A veteran may elect to reside in any CRC 
he or she wants; however, VA will only recommend CRCs that apply for 
approval and meet VA's standards. Once approved, the CRC is placed on 
VA's referral list and VA refers veterans for whom CRC care is an 
option to the VA-approved CRCs when those veterans are determining 
where they would like to live. VA published regulations governing CRCs 
at title 38 Code of Federal Regulations (CFR), Sec. Sec.  17.61-17.72. 
Standards for approval of CRCs are found at Sec.  17.63. On November 
12, 2015, VA published a proposed rule that would amend these 
standards. 80 FR 69909. Under the proposed rule, a CRC would be 
prohibited from employing an individual who has been convicted in a 
court of law of certain listed crimes, or has had a finding entered 
into an applicable State registry or with the applicable licensing 
authority concerning abuse, neglect, mistreatment of individuals or 
misappropriation of property. VA also proposed to require CRCs to 
develop and implement written policies and procedures that prohibit 
mistreatment, neglect, and abuse of residents and misappropriation of 
resident property. The proposed rule would have also required CRCs to 
report and investigate any allegations of mistreatment, neglect, or 
abuse, including injuries of unknown source, and misappropriation of 
resident property. In addition, the proposed rule would require the CRC 
to screen individuals who are not CRC residents, but have direct access 
to a veteran living in a CRC. The proposed revisions would improve the 
safety and help prevent the neglect or abuse of veteran residents in 
CRCs. In addition, we proposed to amend the rule regarding the maximum 
number of beds allowed in a resident's bedroom.
    The comment period for this proposed rule closed on January 11, 
2016. We received four public comments which generally supported the 
proposed rule, but recommended several changes. In addition, we 
received a letter from the U.S. Equal Employment Opportunity Commission

[[Page 34409]]

(EEOC) suggesting amendments to the proposed rule to avoid potential 
conflicts with Title VII of the of the Civil Rights Act of 1964 (42 
U.S.C. 2000e et seq.), as amended (Title VII). Upon review, VA has 
determined that it will adopt the proposed rule as final, with changes 
that are discussed below. These changes are related to elements added 
to the proposed rule, and some paragraphs that were in the proposed 
rule have been redesignated as a result. We have grouped the comments 
and responses into discrete subject areas.

State-Related Issues

    One commenter raised several issues related to actions states may 
be required to take as a result of the proposed rule. As we discuss in 
greater detail below, this rulemaking imposes no requirements on 
states.
    The commenter stated that many states will likely face challenges 
in implementing the new rule, and that VA should allow states 
flexibility in the specific details of their program and implementation 
time. The commenter also stated that some states may not include CRCs 
as ``covered facilities'' and state laws would have to be amended. In 
addition, the commenter noted that states do not define ``employee'' 
the same for purposes of requiring background checks. Given the issues 
of passing enabling state legislation, obtaining approval in states 
with rigorous information technology (IT) project reviews, and 
developing IT system interfaces with external partners, the commenter 
suggested that VA specify a timeframe for implementing the background 
check component of this rule. In addition, the commenter stated that 
the VA rule should designate a state agency to coordinate and make 
employment eligibility determinations for all CRCs in that state. The 
commenter noted that a state agency may receive rap-back notification 
of arrests from state law enforcement departments, and that arrest 
information may not be passed on to employers in some cases. However, 
state determination analysts could monitor and resolve the eligibility 
status of the subject applicant or employee. The commenter listed 
several efficiencies that would be achieved by adopting this process.
    The common thread in this series of comments is the potential 
impact this rulemaking will have on states. However, states are not 
mandated to pass any legislation, publish regulations, initiate any IT 
projects, or take any other action related to this rulemaking. Nor is 
this rulemaking such that VA would consider obligating a state to 
expend resources to coordinate and make employment eligibility 
determinations for all approved CRCs in the state. The section of part 
17 that is being amended addresses standards that a CRC must meet to be 
listed by VA as an approved CRC, and all regulatory requirements are 
directed to the CRC operator, which is typically not a state entity. 
The rulemaking prohibits the CRC from employing an individual who has 
been convicted by a court of law of abusing, neglecting, or mistreating 
individuals within 7 years, or an individual who has had a finding 
entered into an applicable State registry or with the applicable 
licensing authority concerning abuse, neglect, mistreatment of 
individuals or misappropriation of property within 6 months. As we 
noted when we proposed this rule, many states have programs in place 
that the CRC can use to assist in complying with this requirement (80 
FR 69909, 69910 (November 12, 2015)). In those states where no program 
is in place, we are not requiring the states to take any legislative or 
programmatic action. The CRC must identify an alternative means to meet 
the regulatory requirement. We make no changes based on these comments.

Standards for Criminal History Checks

    One commenter stated that VA should require comprehensive 
background checks, including fingerprint-based criminal history checks 
and both state and Federal Bureau of Investigation (FBI) criminal 
history checks. The commenter also suggested that VA should require 
electronic fingerprinting to increase efficiency of that comprehensive 
criminal history check.
    We agree that a criminal history check based on fingerprints is the 
gold standard, and that electronic fingerprinting increases the 
efficiency of a comprehensive criminal history check. However, it is 
unclear to VA whether fingerprinting services, and a criminal history 
check based on those fingerprints, can be requested or easily obtained 
by all approved CRCs in all states or localities; and, if so, the costs 
that would be incurred by a CRC related to such services. It is also 
unclear whether requiring fingerprints in this case would result in an 
outcome different than that contemplated under this rulemaking. VA will 
continue to review this issue, and may propose changes in the future 
based on additional data. We make no changes at this time based on this 
comment.
    One commenter stated that VA should consider instituting a rap-back 
requirement and a validity period for criminal history checks. Rap-back 
is the process for notifications and review in the event that a 
previously cleared direct access worker is then subsequently arrested 
or convicted of a crime. The commenter asserted that in a 12-month 
period, one state participating in the Centers for Medicare and 
Medicaid Services' National Background Check Program received 9,500 
criminal history notifications from state law enforcement agencies for 
``cleared'' long term care employees. Based on these notifications, 
1,260 (13 percent) resulted in employees being determined ineligible 
for continued employment in direct access positions VA considered both 
issues when developing this rulemaking. Rap-back requires a system that 
remains in place and continuously monitors any change in status of an 
individual for which a criminal history check has been completed. The 
system would also have to include a mechanism for communicating to the 
CRC any change in status. To our knowledge, this type of system is not 
readily available to all CRC operators. One example of an existing rap-
back initiative is operated by the FBI as part of its Next Generation 
Identification program. The FBI's rap-back service is available only to 
authorized state or federal agencies. Also, VA has insufficient 
information to determine whether a rap-back system would result in an 
outcome different than that contemplated under this rulemaking. VA will 
continue to review this issue, and may propose changes in the future 
based on additional data. We make no changes at this time based on this 
comment. Regarding the issue of imposing a validity period for criminal 
history checks, under Sec.  17.63 a CRC is required to maintain 
compliance with regulatory standards in order to continue to be listed 
by VA as an approved facility. The approving official inspects each CRC 
at least annually, and ensuring that CRC staff is qualified to be 
employed in the CRC is one element of that inspection. Given this 
requirement, VA believes that establishing a validity period for 
criminal history checks is unnecessary. We make no changes based on 
this comment.
    One commenter stated that VA should consider expanding the list of 
registries reviewed as part of the background check process. The 
commenter suggested that, at a minimum, the background check should 
include searches of the in-state nurse aide registry and any out-of-
state nurse aide registry as appropriate; professional licensing 
registries; the U.S. Department of Health and Human Services List of

[[Page 34410]]

Excluded Individuals/Entities; state child abuse and adult abuse 
registries; and, state and national sex offender registries.
    Under Sec.  17.63(j)(3)(i)(A)(2) of the proposed rule, we stated 
that a CRC provider must not employ an individual who has had a finding 
entered into an applicable State registry or with the applicable 
licensing authority concerning abuse, neglect, mistreatment of 
individuals or misappropriation of property. While we noted examples of 
applicable State registries in our discussion of this paragraph (80 FR 
69909, 69910 (November 12, 2015)), the rule does not specify the number 
or types of State registries that should be reviewed. The issue of 
which State registry is ``applicable'' is wholly dependent on the 
occupation of the individual seeking or holding the job, or the 
requirements of the job. We make no changes based on this comment.
    One commenter stated that VA should seek technical assistance from 
an experienced organization that has worked across many states 
implementing background check programs. The issue of seeking technical 
assistance from an outside organization is beyond the scope of this 
rulemaking. We make no changes based on this comment.

Bar for Certain Crimes, Definition of ``Convicted of a Criminal 
Offense,'' and Title VII Concerns

    In addition to public comments, VA received a letter from EEOC 
recommending that VA consider revising the proposed rule to avoid 
potential conflict with Title VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e et seq.). EEOC recommended that VA consider revising the 
provisions regarding the prohibition on CRCs employing individuals with 
conviction records or negative State registry or licensing authority 
findings; the definition of `` `convicted' of a criminal offense''; and 
the types of State registry findings that may result in exclusion from 
employment with CRCs, to avoid potential conflicts with Title VII. It 
stated that VA's careful consideration of the scope of its criminal 
conduct ban is important because, while Title VII does not preempt 
federally imposed criminal restrictions, such conflicts should be kept 
to a minimum.
    In proposed Sec.  17.63(j)(3)(i)(A), we stated that CRCs would be 
prohibited from employing individuals who have been convicted by a 
court of law of abuse, neglect, or mistreatment of individuals; and 
would be prohibited from employing individuals who have had a finding 
regarding abuse, neglect, mistreatment of individuals, or 
misappropriation of property entered into an applicable State registry 
or with an applicable licensing authority. EEOC noted that the proposed 
rule does not appear to impose any time limits on the convictions or 
State registry or licensing authority findings that may exclude CRC 
applicants from consideration. In addition, it stated that the 
prohibition is very broad, applying to a range of offenses over an 
unspecified time period, with no exceptions or consideration of 
potentially extenuating factors or circumstances. As an example, EEOC 
stated that if an individual was convicted of stealing candy as a minor 
this could be considered misappropriation of property under the 
proposed rule. However, this type of crime would not be job related and 
exclusion from employment would be inconsistent with business 
necessity, and would be discriminatory if it is shown to have a 
disparate impact. EEOC also stated that the proposed rule would not 
allow for consideration of rehabilitation efforts, a long and positive 
work history and references positively attesting to an individual's 
work ethic and integrity.
    In addition, EEOC recommended that VA consider narrowing the 
definition of conviction of a criminal offense to exclude expunged 
convictions and participation in first offender, deferred adjudication, 
or other arrangements or programs in which a judgment of conviction has 
not been made. EEOC noted that, consistent with its guidelines, a CRC 
could consider the conduct and circumstances that resulted in the 
expungement or the individual's participation in such programs when 
making employment decisions.
    Further, EEOC recommended that VA narrow the prohibition of 
employment based on State registry findings to findings that resulted 
in convictions, or, at the very least, prosecution. EEOC stated that, 
as currently written, individuals with applicable State registry 
findings are excluded from employment with CRCs, even if they have not 
been prosecuted for or found guilty of any crime. These individuals may 
pose no greater threat to a CRC resident than applicants without such 
State registry findings. Consequently, such exclusions may not be job 
related and consistent with business necessity.
    We generally agree. In 2012, EEOC issued ``Enforcement Guidance on 
the Consideration of Arrest and Conviction Records in Employment 
Decisions under Title VII of the Civil Rights Act of 1964.'' One 
purpose of that guidance is to assist EEOC in coordinating ``with other 
federal departments and agencies with the goal of maximizing federal 
regulatory consistency with respect to the use of criminal history 
information in employment decisions.'' Title VII prohibits employment 
discrimination based on race, color, religion, sex, or national origin. 
The guidance addresses both disparate treatment (where an employer 
treats criminal history information differently for different 
applicants or employees based on race or national origin) and disparate 
impact (a neutral policy, such as excluding applicants from employment 
based on certain criminal conduct, that disproportionately impacts some 
individuals based on race or national origin, where the exclusion is 
not job related and consistent with business necessity).
    An arrest, or mere allegation of misconduct, does not establish 
that criminal conduct has occurred. A criminal conviction, on the other 
hand, serves as legally sufficient evidence that a person engaged in 
particular conduct. In certain circumstances, however, there may be 
reasons for an employer not to rely on the conviction record alone when 
making an employment decision.
    As an initial matter, we note that various federal or state laws 
effectively bar employment in certain positions if an individual is 
convicted of certain crimes. For instance, at the federal level, 18 
U.S.C. 2381 bans from future federal employment an individual who has 
been convicted of treason. Similar types of bans are found in state 
law. The majority of states have laws or regulations governing hiring 
of individuals applying for positions in long term care, residential 
care, adult day care, nursing homes, and similar types of care provided 
to elderly or at risk individuals. Many states establish a permanent 
bar on employment in one or more of these service sectors for 
convictions of certain serious crimes, and a ban for a defined number 
of years for convictions of other types of crimes. The specific 
criminal offenses listed in the statutes and regulations vary by state, 
as does the length of the bar on employment following conviction. One 
example is South Carolina Regulation 61-84, Standards for Licensing 
Community Residential Care Facilities, which provides that staff 
members, direct care volunteers, and private sitters of a licensed 
community residential care facility shall not have a prior conviction 
or pled no contest (nolo-contendere) to abuse, neglect, or exploitation 
of a child or a vulnerable adult as defined in state law. Another 
example is District of Columbia Code 44-552 which prohibits a long term 
care facility from employing or contracting

[[Page 34411]]

with an unlicensed health care worker who has been convicted within 7 
years of any of several enumerated offenses. Several states have opted 
for a similar approach.
    The proposed rule listed classes of crimes that an individual could 
be convicted of, rather than specific crimes defined in law. Based on 
comments received, VA believes this formulation could lead to 
uncertainty and confusion. In addition, the proposed rule would impose 
a permanent bar on employment in a CRC for a conviction. VA has 
determined that a more nuanced approach is appropriate, and that the 
rule should align more closely with established state requirements. To 
address EEOC's concerns, VA will make several changes to the rule. 
First, we will more clearly define the types of criminal activity that 
could be disqualifying. VA's primary concern is to ensure that a 
veteran residing in a CRC is not subjected to abuse, neglect, 
mistreatment, or misappropriation of property. To that end, VA will 
state that a CRC may not employ an individual who has been convicted of 
any of the following offenses or their equivalent in a state or 
territory: Murder, attempted murder, or manslaughter; arson; assault, 
battery, assault and battery, assault with a dangerous weapon, mayhem 
or threats to do bodily harm; burglary; robbery; kidnapping; theft, 
fraud, forgery, extortion or blackmail; illegal use or possession of a 
firearm; rape, sexual assault, sexual battery, or sexual abuse; child 
or elder abuse or cruelty to children or elders; or unlawful 
distribution or possession with intent to distribute a controlled 
substance. VA believes that this list of criminal offenses is 
sufficiently narrow and well-defined in law to target only those types 
of crimes that are of concern to VA. Rather than imposing a lifetime 
ban for a conviction of an enumerated crime, we will require a 7 year 
ban. This is in line with several state statutes related to similar 
types of employment, and VA believes it is consistent with our 
objectives, and supports our goal of ensuring a safe environment for 
CRC residents. Employees, contractors and volunteers working in VA-
operated facilities, such as community living centers or nursing homes, 
must undergo a background screening as required by Office of Personnel 
Management (OPM) regulations at 5 CFR parts 731 and 736. Veterans 
residing in these VA-operated facilities can be confident that VA staff 
members, contractors, and volunteers have been screened for previous 
criminal convictions. One purpose of this rulemaking is to provide the 
same or similar level of assurance to veterans residing in approved 
CRCs.
    A finding in a State registry or with the applicable licensing 
authority concerning abuse, neglect, mistreatment of individuals or 
misappropriation of property is not equivalent to conviction of a 
crime, and we do not believe that a 7 year ban on employment based on a 
State registry or licensing authority is appropriate. However, we do 
not believe that an adverse finding in a relevant State registry or 
with an applicable licensing authority should be ignored, because even 
in the absence of a conviction the allegation of wrongdoing is by an 
individual or entity authorized to provide such information, and such 
information is subject to some level of investigation before it is 
approved for inclusion. We believe imposing a 6 month ban on employment 
in an approved CRC is appropriate, as this recognizes the adverse 
finding while also recognizing that there may be a follow-up 
investigation of the alleged incident during the 6 months following an 
adverse finding.
    Where the conviction by a court of law of a crime enumerated in 
this rule occurred greater than 7 years in the past, or a finding was 
entered into a State registry or with the applicable licensing 
authority more than 6 months in the past, the CRC must perform an 
individual assessment of the applicant or employee to determine 
suitability for employment. The individual assessment must include 
consideration of the following factors: The nature of the job held or 
sought; the nature and gravity of the offense or offenses; the time 
that has passed since the conviction and/or completion of the sentence; 
the facts or circumstances surrounding the offense or conduct; the 
number of offenses for which the individual was convicted; the employee 
or applicant's age at the time of conviction, or release from prison; 
the nexus between the criminal conduct of the person and the job duties 
of the position; evidence that the individual performed the same type 
of work, post-conviction, with the same or a different employer, with 
no known incidents of criminal conduct; the length and consistency of 
employment history before and after the offense or conduct; 
rehabilitation efforts, including education or training; and, 
employment or character references and any other information regarding 
fitness for the particular position.
    The factors listed above are derived from leading court decisions 
on what should be included in an individual assessment for Title VII 
purposes. To ensure that post-conviction suitability for employment is 
properly assessed for individuals who are 7 years post-conviction, VA 
believes these factors should be utilized by CRC operators.
    A conviction of a relevant offense alone greater than 7 years in 
the past is not a bar to employment; and the listed factors will be 
considered by the CRC in determining eligibility for employment. VA 
believes that requiring the CRC to take these listed factors into 
consideration when conducting an individual assessment of an 
applicant's or employee's prior conviction for a crime strikes the 
proper balance between VA's goal of providing a safe environment for 
veterans residing in a CRC, due process for the applicant or employee, 
and the need for the CRC operator to ensure the hiring of a suitable 
individual.
    In addition, we are amending the definition of conviction of a 
criminal offense to exclude an expunged conviction, as an expunged 
conviction is considered in law to have never occurred.
    We do not agree with EEOC that the definition of conviction of a 
criminal offense should be amended to exclude participation in first 
offender deferred adjudication, or other arrangements or programs in 
which a judgment of conviction has not been made. Several federal 
statutes include these, or similar, types of deferred adjudications in 
the definition of ``conviction.'' Examples include an immigration 
statute, 8 U.S.C. 1101(a)(48)(A), and a statute excluding certain 
individuals and entities from participation in Medicare and State 
health care programs, 42 U.S.C. 1320a-7(i). Case law reflects that 
resolution of the issue of whether any particular deferred adjudication 
qualifies as a conviction under these statutes is wholly dependent on 
the facts of the case and the relevant underlying state or federal law 
(see, e.g., Crespo v. Holder, 631 F.3d 130 (4th Cir. 2011) and Travers 
v. Shalala, 20 F.3d 993 (9th Cir. 1994)). Rather than disregarding 
deferred adjudication in its entirety, VA has determined that a better 
approach is to require the CRC operator to consider a deferred 
adjudication on a case by case basis, conducting an individual 
assessment utilizing the factors listed above to determine eligibility 
for employment. VA believes that the individual assessment will address 
the concerns raised by EEOC, and the rule is amended accordingly.

Appeals

    A commenter recommended the inclusion of an appeals process in 
those instances where an individual is denied employment because of the 
results of a criminal history check. While it is true

[[Page 34412]]

that VA will review staffing as part of the inspection and approval 
process, employment decisions are made solely by the CRC. The CRC, in 
turn, is a business operating under the auspices of the state, county, 
or locality. Individuals seeking to contest employment decisions may 
have other recourse under state law, and sometimes under federal law. 
Any rulemaking by VA on the issue of appeals could have the effect of 
limiting an individual's right to challenge a CRC's decision under 
state law, in essence preempting relevant state law. VA believes that a 
better approach is to preserve those rights. We make no changes based 
on this comment.

Reporting and Investigating Alleged Mistreatment, Neglect, Abuse, and 
Misappropriation of Resident's Property

    One commenter supported VA requiring a CRC to report alleged 
mistreatment, neglect, abuse, and misappropriation of resident's 
property to the approving official within twenty-four hours of when the 
provider becomes aware, and the results of any investigation within 
five working days. However, the commenter recommended that these 
reports also be shared with the appropriate state agency. Another 
commenter stated that VA should clarify under what circumstance, how, 
and when external authorities are engaged.
    We agree. In some instances, approved CRCs are licensed by the 
state, and therefore must comply with any state requirements for 
reporting alleged mistreatment, neglect, abuse, and misappropriation of 
residents' property to the appropriate state agency. However, a CRC 
that is not required to obtain a license to operate may not have the 
same reporting requirement. We are amending the rule to require the CRC 
to immediately report, which means no more than 24 hours after the 
provider becomes aware of the alleged violation, all alleged violations 
involving mistreatment, neglect, or abuse, including injuries of 
unknown source, and misappropriation of resident property to the 
approving official and to other officials in accordance with state law.
    One commenter stated that reports of abuse or neglect should 
include the name of the alleged victim, and contact person (such as a 
family member). In addition, the commenter stated that any identified 
caregiver or legal representative should be notified of the allegation, 
and the record should reflect resolution of the investigation. Further, 
the CRC should be required to provide copies of the written policy and 
procedure to residents, caregivers, and representatives.
    In proposed Sec.  17.63(j)(3)(i)(B) we stated that the CRC must 
ensure that all alleged violations involving mistreatment, neglect, or 
abuse, including injuries of unknown source, and misappropriation of 
resident property are reported to the approving official immediately, 
which means no more than 24 hours after the provider becomes aware of 
the alleged violation. The report, at a minimum, must include: The 
facility name, address, telephone number, and owner; the date and time 
of the alleged violation; a summary of the alleged violation; the name 
of any public or private officials or VHA program offices that have 
been notified of the alleged violations, if any; whether additional 
investigation is necessary to provide VHA with more information about 
the alleged violation; and contact information for a person who can 
provide additional details at the community residential care provider, 
including a name, position, location, and phone number. We agree that 
the name of the alleged victim, contact information for the resident's 
next of kin or other designated family member, agent, personal 
representative, or fiduciary should be included in the report. We also 
agree that any identified caregiver or legal representative should be 
notified of the allegation, and we will amend the rule accordingly. The 
commenter noted that the record should reflect resolution of the 
investigation. To clarify the CRC's responsibility to report any 
corrective action taken as a result of the investigation, we amend the 
rule to require the CRC to report to the approving official, and other 
officials as required under all other applicable law, both the results 
of the investigation as well as any corrective action taken by the CRC 
as a result of such investigation.
    One commenter supported the requirement that the CRC develop and 
implement written policies and procedures prohibiting mistreatment, 
abuse and neglect of residents, and misappropriation of resident 
property. However, the commenter urged VA to include the requirement 
that the written policies and procedures include specific protections 
for veterans who identify as lesbian, gay, bisexual and transgender 
(LGBT). The commenter noted recent studies that estimated that the 
population of LGBT older adults will double by 2030, and the majority 
of LGBT aging adults fear they will experience discrimination in long 
term care organizations.
    In Sec.  17.63(j)(3) we state that the CRC provider must develop 
and implement written policies and procedures that prohibit 
mistreatment, neglect, and abuse of residents and misappropriation of 
resident property. In our discussion of this paragraph, we stated that 
VA intends to develop sample policies and boilerplate that could be 
adapted by a CRC to meet the facility's individual requirements. The 
policies and procedures implemented by the CRC must provide for a safe 
environment for all veterans residing in the facility. While the 
content of any policy developed and implemented under Sec.  17.63(j)(3) 
is beyond the scope of this rulemaking, VA will work to ensure that any 
policy provided to CRCs will include elements intended to provide a 
safe environment for all veteran residents, and, therefore, make no 
changes based on this comment.

Medical Foster Homes

    One commenter stated that VA should provide explicit guidance on 
how abuse is detected and reported in smaller CRCs, such as Medical 
Foster Homes. The commenter asserted that such behavior can be easier 
to observe and report in larger facilities, where any problem can be 
reported to the facility operator. However, in smaller facilities, a 
resident may have to rely on a single caregiver who may be able to hide 
the abuse, or the abuser may be the homeowner or service provider. On a 
related issue, the commenter supported removing an accused employee 
from resident care duties during an investigation, but urged VA to 
provide specific guidance on how this provision would apply to a small 
CRC where a live-in owner of the CRC is suspected of abuse or neglect.
    A Medical Foster Home is a type of CRC for care of disabled 
veterans with the more medically complex conditions, and is generally 
distinguished from other CRCs by the following factors: The home is 
owned or rented by the caregiver; the caregiver lives in the Medical 
Foster Home and provides personal care and supervision; there are no 
more than three residents receiving care in the Medical Foster Home, 
including both veterans and non-veterans; and the veteran residents are 
enrolled in a VA home based care or spinal cord injury program. As the 
commenter noted, a Medical Foster Home is smaller than other types of 
CRCs, and detecting/reporting abuse or neglect in that environment does 
present special challenges. The specific content of any guidance 
provided to a resident or operator of Medical Foster Homes is beyond 
the scope of this rulemaking. However, VA is aware of the issue and 
plans to address it through

[[Page 34413]]

developing policy, which will include elements intended to provide a 
safe environment for all veteran residents. We make no changes based on 
this comment.

Consent to Disclosure of Resident Records

    One commenter recommended that the regulation be amended to allow a 
designated individual other than the resident to authorize disclosure 
of resident records in those instances where the resident is no longer 
competent. We agree. Generally, when a person is no longer competent to 
consent to disclosure of records, someone else, either previously 
designated by the person or through operation of law, is given 
authority to consent to disclosures, such as a fiduciary, agent, or 
personal representative. We are amending this rule to address this 
circumstance.
    Based on the rationale set forth in the proposed rule and in this 
document, VA is adopting the provisions of the proposed rule as a final 
rule with changes as noted above.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
final 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 must be read to conform with 
this rulemaking if possible, or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507) requires that 
VA consider the impact of paperwork and other information collection 
burdens imposed on the public. Under 44 U.S.C. 3507(a), an agency may 
not collect or sponsor the collection of information, nor may it impose 
an information collection requirement unless it displays a currently 
valid Office of Management and Budget (OMB) control number. See also 5 
CFR 1320.8(b)(2)(vi).
    This final rule imposes information collection requirements in 38 
CFR 17.63(i) and (j): VA has reviewed the information collection as 
presented in the proposed rule published on November 12, 2015 (80 FR 
69909) and has determined that the proposed information collection was 
too broad. It included information collection related to both staffing 
and resident recordkeeping requirements that formerly approved by OMB 
under control number 2900-0491, which expired on July 31, 1990. By a 
separate action, VA is requesting that OMB reinstate this information 
collection under control number 2900-0491 rather than addressing that 
information collection under the current rulemaking. In addition, the 
proposed information collection included a collection related to the 
requirement that a CRC develop policy on the subject of mistreatment, 
neglect, or abuse of CRC residents. VA has determined that this is not 
a collection of information as that term is defined in 5 CFR 1320.3. VA 
has drafted policy on mistreatment, neglect, or abuse of CRC residents 
which is being provided to CRCs for use and implementation.
    This rulemaking at Sec.  17.63(i)(2) requires the CRC to maintain 
records related to paragraph (j)(3), which addresses procedures for 
ensuring that reports of alleged violations involving mistreatment, 
neglect, or abuse, including injuries of unknown source, and 
misappropriation of resident property are reported and fully 
investigated. Information collection related to those procedures is 
contained in paragraph (j)(6). That paragraph requires CRCs to 
immediately, meaning no more than 24 hours after the provider becomes 
aware of the alleged violation, report all alleged violations involving 
mistreatment, neglect, or abuse, including injuries of unknown source, 
and misappropriation of resident property to the approving official.
    In the proposed information collection, we estimated the annual 
burden related to CRC reporting and investigation of alleged violations 
involving mistreatment, neglect, or abuse, including injuries of 
unknown source, and misappropriation of resident property based on an 
assumption that VA would receive one such report from each CRC each 
year. VA determined that this estimate was too high, as we have not 
received any reports of mistreatment, neglect, or abuse, including 
injuries of unknown source, and misappropriation of resident property 
during the past ten years. VA believes that a more accurate estimate 
would be one report per four CRCs. Finally, we based our annual burden 
hour estimate on the number of approved CRCs as of Q4 FY2012, which was 
the most recent data available when the proposed rule was drafted. The 
most recent data from FY2017 reflects that the number of approved CRCs 
has decreased dramatically, from 1,293 in 2012 to 730 in 2017. We have 
adjusted the estimated annual burden hours accordingly. VA is not 
accepting new public comment on these changes, as a public comment 
period has already been provided on this information collection, and 
the substance of the information collection related to reporting of 
mistreatment, neglect, or abuse, including injuries of unknown source, 
and misappropriation of resident property has not changed.
    As required by the 44 U.S.C. 3507(d), VA submitted this information 
collection to OMB for its review. OMB approved these new information 
collection requirements associated with the final rule and assigned OMB 
control number 2900-0844.
    The collection of information is described here.
    Title: Ensuring a Safe Environment for Community Residential Care 
Residents.

Summary of Collection of Information

    Paragraph (j)(6) requires CRCs to immediately, meaning no more than 
24 hours after the provider becomes aware of the alleged violation, 
report all alleged violations involving mistreatment, neglect, or 
abuse, including injuries of unknown source, and misappropriation of 
resident property to the approving official. We require that the 
report, at a minimum, must include the facility name, address, 
telephone number, and owner; the date and time of the alleged 
violation; a summary of the alleged violation; the name of any public 
or private officials or VHA program offices that have been notified of 
the alleged violations, if any; whether additional investigation is 
necessary to provide VHA with more information about the alleged 
violation; and contact information for a person who can provide 
additional details at the community residential care provider, 
including a name, position, location, and phone number.
    We require the CRCs to document and thoroughly investigate evidence 
of an alleged violation. The results of all investigations must be 
reported to the approving official within 5 working days of the 
incident and to other officials in accordance with State law. It would 
also require facilities to develop and implement written policies and 
procedures to prohibit the mistreatment, neglect, and abuse of 
residents and misappropriation of resident property.
    The most current data available to VA (Q1FY2017) reflects that we 
have 730 approved CRCs, 150 of which are Medical Foster Homes at the 1 
to 3 bed size. The total number of staff working in these facilities is 
3,170. This aggregate number of CRC staff is distributed in CRCs as 
follows: 2.5 staff for a 1 to 3 bed facility, 4 staff for a 4 to 15 bed 
facility, 5 staff for a 15 to 26

[[Page 34414]]

bed facility and 11 staff for a 26 to 100+ bed facility.
    CRCs are required to report information under this rule when the 
facility: (1) Has an alleged violation involving mistreatment, neglect, 
or abuse, including injuries of unknown source, and misappropriation of 
resident property; or, (2) is reporting the results of an investigation 
into that alleged violation. CRCs are also required to document and 
investigate evidence of any alleged violation. We view the reporting, 
documenting, and investigating of an alleged incident and the 
subsequent report of the results of the investigation to be one 
collection of information, as it focuses on one set of alleged facts 
and the facility's investigation of those facts.
    This rule formalizes the reporting and investigation requirement 
and we believe this would more likely than not result in an increase in 
the number of reports of alleged abuse mistreatment, neglect, or abuse, 
including injuries of unknown source, or misappropriation of resident 
property per year. However, for purposes of this estimate, we will 
assume that a maximum of one fourth of approved CRCs will have one 
incident per year related to an alleged violation involving 
mistreatment, neglect, or abuse, including injuries of unknown source, 
and misappropriation of resident property; or, reporting the results of 
an investigation into that alleged violation. The estimated average 
burden for an alleged violation response is three hours.
    Description of need for information and proposed use of 
information: VA needs this information to ensure the health and safety 
of veterans placed in these facilities. In CRCs, where VA involvement 
is less intensive and to which VA does not provide any payments or 
services, we believe that information obtained under the proposed rule 
would provide necessary protection for veteran residents.
    Description of likely respondents: One fourth of approved CRCs 
currently listed or that request future listing on VA's approved CRCs 
referral list.
    Estimated number of respondents per year: 182 operators of CRCs.
    Estimated frequency of responses: Once in a 12-month period.
    Estimated average burden per response: 3 hours.
    Estimated total annual reporting and recordkeeping burden: 546 
hours.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule 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). This final rule will be small business neutral as it applies only 
to those CRCs seeking inclusion on VA's list of approved CRCs. The 
costs associated with this final rule are minimal, consisting of the 
administrative requirement to develop and implement written policies 
and procedures that prohibit mistreatment, neglect, and abuse of 
residents and misappropriation of resident property; ensure that no 
employees are employed in contravention to the final rule; report to VA 
any alleged violation involving mistreatment, neglect, or abuse, 
including injuries of unknown source, and misappropriation of resident 
property; and investigate alleged resident abuse, take steps to prevent 
further harm, and implement appropriate corrective measures.
    A CRC may elect to order background checks on employees from 
commercial sources or local law enforcement agencies. The cost of an 
individual background check varies dependent on the vendor, but VA 
believes the average cost is $50. VA believes that 75 percent of CRCs 
are required to, or could obtain, criminal background checks on 
employees through one or more existing federal or state programs. This 
includes: (1) The state grant program administered by the Centers for 
Medicare and Medicaid Services (CMS) for conducting federal and state 
criminal background checks on direct patient access employees of long-
term care facilities and providers (42 U.S.C. 1320a-7l); (2) the CMS 
requirement applicable to facilities receiving Medicare and Medicaid 
funds; and (3) various state laws or regulations mandating criminal 
background screening for employment to work with the elderly or 
disabled. In addition, many CRCs that are currently servicing veterans 
already, voluntarily, have policies and procedures in place to review 
the backgrounds of their employees and make employment decisions 
consistent with this rulemaking as one way to ensure resident safety.
    The remaining 25 percent of CRCs (91) will more likely than not opt 
to obtain criminal background checks on CRC staff in order to be 
approved by VA. The median number of staff in CRCs currently approved 
by VA is five. We estimate the cost that will be incurred for obtaining 
criminal background checks on CRC staff is $250 per CRC. On this basis, 
the Secretary certifies that the adoption of this final rule will not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act. 
Therefore, under 5 U.S.C. 605(b), this rulemaking is exempt from the 
initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Executive Order 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,'' requiring review by OMB, unless OMB 
waives such review, 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 final rule have been examined, and it has been 
determined not to be a significant regulatory action under Executive 
Order 12866. VA's impact analysis can be found as a supporting document 
at http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's Web site at 
http://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published From FY 2004 Through Fiscal Year to Date.''

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that

[[Page 34415]]

agencies prepare an assessment of anticipated costs and benefits before 
issuing any rule that may result in the 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 one year. 
This final rule will have no such effect on State, local, and tribal 
governments, or on the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers and 
titles affected by this document are 64.009, Veterans Medical Care 
Benefits; 64.010, Veterans Nursing Home Care; and 64.018, Sharing 
Specialized Medical Resources.

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. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on July 18, 2017, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Government contracts, 
Grant programs--health, Government programs--veterans, Health care, 
Health facilities, Health professions, Health records, Homeless, Mental 
health programs, Nursing homes, Reporting and recordkeeping 
requirements, Veterans.

    Dated: July 18, 2017.
Jeffrey Martin,
Office Program Manager, Office of Regulation Policy & Management, 
Office of the Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, Department of Veterans 
Affairs amends 38 CFR part 17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, and as noted in specific sections.
    Section 17.38 also issued under 38 U.S.C. 101, 501, 1701, 1705, 
1710, 1710A, 1721, 1722, 1782, and 1786.
    Section 17.169 also issued under 38 U.S.C. 1712C.
    Sections 17.380 and 17.412 are also issued under sec. 260, 
Public Law 114-223, 130 Stat. 857.
    Section 17.410 is also issued under 38 U.S.C. 1787.
    Section 17.415 is also issued under 38 U.S.C. 7301, 7304, 7402, 
and 7403.
    Sections 17.640 and 17.647 are also issued under sec. 4, Public 
Law 114-2, 129 Stat. 30.
    Sections 17.641 through 17.646 are also issued under 38 U.S.C. 
501(a) and sec. 4, Public Law 114-2, 129 Stat. 30.


0
2. Amend Sec.  17.63 by:
0
a. Adding paragraphs (e)(1)(i) and (ii);
0
b. Revising paragraph (i);
0
c. Adding paragraphs (j)(3) through (9); and
0
d. Adding an OMB approval parenthetical to the end of the section.
    The additions and revision read as follows:


Sec.  17.63  Approval of community residential care facilities.

* * * * *
    (e) * * *
    (1) * * *
    (i) Facilities approved before August 24, 2017 may not establish 
any new resident bedrooms with more than two beds per room;
    (ii) Facilities approved after August 24, 2017 may not provide 
resident bedrooms containing more than two beds per room.
* * * * *
    (i) Records. (1) The facility must maintain records on each 
resident in a secure place. Resident records must include a copy of all 
signed agreements with the resident. Resident records may be disclosed 
only with the permission of the resident; an authorized agent, 
fiduciary, or personal representative if the resident is not competent; 
or when required by law.
    (2) The facility must maintain and make available, upon request of 
the approving VA official, records establishing compliance with 
paragraphs (j)(1) and (2) of this section; written policies and 
procedures required under paragraph (j)(3) of this section; and, 
emergency notification procedures.
    (j) * * *
    (3) The community residential care provider must develop and 
implement written policies and procedures that prohibit mistreatment, 
neglect, and abuse of residents and misappropriation of resident 
property.
    (4) Except as provided in paragraph (j)(5)(ii) of this section, the 
community residential care provider must not employ individuals who--
    (i) Have been convicted within 7 years by a court of law of any of 
the following offenses or their equivalent in a state or territory:
    (A) Murder, attempted murder, or manslaughter;
    (B) Arson;
    (C) Assault, battery, assault and battery, assault with a dangerous 
weapon, mayhem or threats to do bodily harm;
    (D) Burglary;
    (E) Robbery;
    (F) Kidnapping;
    (G) Theft, fraud, forgery, extortion or blackmail;
    (H) Illegal use or possession of a firearm;
    (I) Rape, sexual assault, sexual battery, or sexual abuse;
    (J) Child or elder abuse, or cruelty to children or elders; or
    (K) Unlawful distribution or possession with intent to distribute, 
a controlled substance; or
    (ii) Have had a finding entered within 6 months into an applicable 
State registry or with the applicable licensing authority concerning 
abuse, neglect, mistreatment of individuals or misappropriation of 
property.
    (5)(i) If the conviction by a court of law of a crime enumerated in 
paragraph (j)(4)(i) of this section occurred greater than 7 years in 
the past, or a finding was entered into an applicable State registry as 
specified in paragraph (j)(4)(ii) of this section more than 6 months in 
the past, the community residential care provider must perform an 
individual assessment of the applicant or employee to determine 
suitability for employment. The individual assessment must include 
consideration of the following factors:
    (A) The nature of the job held or sought;
    (B) The nature and gravity of the offense or offenses;
    (C) The time that has passed since the conviction and/or completion 
of the sentence;
    (D) The facts or circumstances surrounding the offense or conduct;
    (E) The number of offenses for which the individual was convicted;
    (F) The employee or applicant's age at the time of conviction, or 
release from prison;
    (G) The nexus between the criminal conduct of the person and the 
job duties of the position;
    (H) Evidence that the individual performed the same type of work, 
post-conviction, with the same or a different employer, with no known 
incidents of criminal conduct;
    (I) The length and consistency of employment history before and 
after the offense or conduct; rehabilitation efforts, including 
education or training; and,
    (J) Employment or character references and any other information 
regarding fitness for the particular position.

[[Page 34416]]

    (ii) An individual assessment must be performed to determine 
suitability for employment for any conviction defined in paragraph 
(j)(8)(iv), regardless of the age of the conviction.
    (6)(i) The community residential care provider must ensure that all 
alleged violations involving mistreatment, neglect, or abuse, including 
injuries of unknown source, and misappropriation of resident property 
are reported to the approving official immediately, which means no more 
than 24 hours after the provider becomes aware of the alleged 
violation; and to other officials in accordance with State law. The 
report, at a minimum, must include--
    (A) The facility name, address, telephone number, and owner;
    (B) The date and time of the alleged violation;
    (C) A summary of the alleged violation;
    (D) The name of any public or private officials or VHA program 
offices that have been notified of the alleged violations, if any;
    (E) Whether additional investigation is necessary to provide VHA 
with more information about the alleged violation;
    (F) The name of the alleged victim;
    (G) Contact information for the resident's next of kin or other 
designated family member, agent, personal representative, or fiduciary; 
and
    (H) Contact information for a person who can provide additional 
details at the community residential care provider, including a name, 
position, location, and phone number.
    (ii) The community residential care provider must notify the 
resident's next of kin, caregiver, other designated family member, 
agent, personal representative, or fiduciary of the alleged incident 
concurrently with submission of the incident report to the approving 
official.
    (iii) The community residential care provider must have evidence 
that all alleged violations involving mistreatment, neglect, or abuse, 
including injuries of unknown source, and misappropriation of resident 
property are documented and thoroughly investigated, and must prevent 
further abuse while the investigation is in progress. The results of 
all investigations must be reported to the approving official within 5 
working days of the incident and to other officials in accordance with 
all other applicable law, and appropriate corrective action must be 
taken if the alleged violation is verified. Any corrective action taken 
by the community residential care provider as a result of such 
investigation must be reported to the approving official, and to other 
officials as required under all other applicable law.
    (iv) The community residential care provider must remove all duties 
requiring direct resident contact with veteran residents from any 
employee alleged to have violated this paragraph (j) during the 
investigation of such employee.
    (7) For purposes of this paragraph (j), the term ``employee'' 
includes a:
    (i) Non-VA health care provider at the community residential care 
facility;
    (ii) Staff member of the community residential care facility who is 
not a health care provider, including a contractor; and
    (iii) Person with direct resident access. The term ``person with 
direct resident access'' means an individual living in the facility who 
is not receiving services from the facility, who may have access to a 
resident or a resident's property, or may have one-on-one contact with 
a resident.
    (8) For purposes of this paragraph (j), an employee is considered 
``convicted'' of a criminal offense--
    (i) When a judgment of conviction has been entered against the 
individual by a Federal, State, or local court, regardless of whether 
there is an appeal pending;
    (ii) When there has been a finding of guilt against the individual 
by a Federal, State, or local court;
    (iii) When a plea of guilty or nolo contendere by the individual 
has been accepted by a Federal, State, or local court; or
    (iv) When the individual has entered into participation in a first 
offender, deferred adjudication, or other arrangement or program where 
judgment of conviction has been withheld.
    (9) For purposes of this paragraph (j), the terms ``abuse'' and 
``neglect'' have the same meaning set forth in 38 CFR 51.90(b).
* * * * *

(The information collection requirements in this section have been 
approved by the Office of Management and Budget under control number 
2900-0844.)

[FR Doc. 2017-15519 Filed 7-24-17; 8:45 am]
BILLING CODE 8320-01-P