[Federal Register Volume 84, Number 135 (Monday, July 15, 2019)]
[Rules and Regulations]
[Pages 33694-33697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14918]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AP63


Approval Criteria for Rates Charged for Community Residential 
Care

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Affairs (VA) adopts as final, with changes, 
a proposed rule amending its regulation governing standards applicable 
to a community residential care facility (CRC) approved by VA. This 
rule also addresses the amount that a veteran may be charged for 
residence in a CRC and how VA determines whether that rate is 
appropriate. The cost of community residential care is financed by the 
veteran's own resources, and the resident or an authorized personal 
representative and a representative of the CRC must agree upon the 
charge and payment procedures for community residential care. VA 
reviews and has approval authority over this agreement. The rule amends 
and updates the criteria VA uses to determine whether the rate for care 
charged to a veteran residing in an approved CRC is appropriate, 
clarifying how VA determines whether a CRC rate should be approved, 
consistent with current VA practice. In addition, this rulemaking 
defines in regulation the level of care that must be provided to a 
veteran residing in a CRC.

DATES: This final rule is effective on August 14, 2019.

FOR FURTHER INFORMATION CONTACT: Dayna Cooper, Chief, Home and 
Community Based Programs, Geriatrics and Extended Care (10NC4), 
Veterans Health Administration, Department of Veterans Affairs, 810 
Vermont Ave. NW, Washington, DC 20420, [email protected] (202) 632-
8321. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on April 24, 2018, VA proposed to amend its regulation 
governing standards applicable to a CRC approved by VA. 83 FR 17777. VA 
provided a 60-day comment period, which ended on June 25, 2018. We 
received three comments on the proposed rule and make no changes based 
on these comments. We adopt the proposed rule as is, with the exception 
of minor technical amendments and corrections as explained further in 
this rulemaking.
    VA is authorized under 38 U.S.C. 1730 to assist veterans by 
referring them for placement, and aiding veterans in obtaining 
placement, in CRCs. A CRC is a form of enriched housing that provides 
health care supervision to eligible veterans not in need of hospital or 
nursing home care, but who, because of medical, psychiatric and/or 
psychosocial limitations as determined through a statement of needed 
care, are not able to live independently and have no suitable family or 
significant others to provide the needed supervision and supportive 
care. CRC care consists of room, board, assistance with activities of 
daily living and supervision as required on an individual basis. The 
size of a CRC can vary from one bed to several hundred. VA maintains a 
list of approved CRCs. Employees of the CRC are not VA employees, and 
no employment relationship exists between employees of the CRC and VA.
    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 our 
standards. Once approved by VA, the CRC is placed on VA's referral list 
and VA refers veterans for whom CRC care is an option to listed CRCs 
when those veterans are determining where they would like to live. To 
become approved, a CRC must meet the specified criteria in 38 CFR 
17.63, which sets forth standards relating to the physical integrity of 
the facility, the health care provided at the CRC, the standard of 
living therein, costs charged directly to veteran residents of the CRC, 
and other criteria for approval.
    We proposed removing the definition of ``daily living activities'' 
and substituting the terms ``activities of daily living'' and 
``instrumental activities of daily living'' where it is used in 
Sec. Sec.  17.61(b) and 17.62. In the latter section, we proposed 
defining ``activities of daily living'' as basic daily tasks an 
individual performs as part of self-care which may be used as a 
measurement of the functional status of a person including: Walking; 
bathing, shaving, brushing teeth, combing hair; dressing; eating; 
getting in or getting out of bed; and toileting. We proposed defining 
``Instrumental activities of daily living'' as tasks that are not 
necessary for fundamental functioning, but allow an individual to live 
independently in a community. Instrumental activities of daily living 
include: Housekeeping and cleaning room; meal preparation; taking 
medications; laundry; assistance with transportation; shopping- for 
groceries, clothing or other items; ability to use the telephone; 
ability to manage finances; writing letters; and obtaining 
appointments. In addition, we proposed revising Sec.  17.62 by removing 
the paragraph designations for the definitions in that section, 
arranging the defined terms in alphabetical order, and making non-
substantive changes to the definitions to make the introductory wording 
for each definition consistent with that of other defined terms in part 
17.
    The proposed rule also focused on CRC standards set forth in Sec.  
17.63. We

[[Page 33695]]

proposed revising paragraph (b) to state that the CRC must provide the 
resident, at a minimum, a base level of care to include room and board; 
nutrition consisting of three meals per day and two snacks, or as 
required to meet special dietary needs; laundry services; 
transportation (either provided or arranged) to VA and healthcare 
appointments; and accompanying the resident to appointments if needed; 
24-hour supervision, if indicated; and care, supervision, and 
assistance with activities of daily living and instrumental activities 
of daily living.
    Paragraph (k) of this section addresses the amount that a veteran 
may be charged for residence in a CRC and how VA determines whether 
that rate is appropriate. VA proposed amending and updating this 
paragraph to make it consistent with changes in the practices of 
approved CRCs since this provision became effective on June 14, 1989, 
and to clarify the criteria VA uses to determine whether the rate 
charged by the CRC is reasonable. We proposed amending paragraph (k)(2) 
to state that the cost of community residential care should reflect the 
cost of providing the base level of care as defined in paragraph (b). 
Proposed paragraph 17.63(k)(3) would retain the requirement, currently 
found in paragraph 17.63(k)(2), that the resident or an authorized 
personal representative and a representative of the CRC facility must 
agree upon the charge and payment procedures for community residential 
care.
    We proposed to add paragraph (k)(4) to establish standards for use 
by a VA approving official in reviewing and approving this agreement 
consistent with current practice. We proposed that the charges for 
community residential care must be reasonable and comparable to the 
current average rate for residential care in the State or Region for 
the same level of care provided to the resident. Any year to year 
increase in the charge for care in a community residential care 
facility for the same level of care may not exceed the annual 
percentage increase in the National Consumer Price Index (CPI) for that 
year. We stated that the approving official would have the authority to 
approve a rate lower than the current average rate for residential care 
in the State or Region for the same level of care if the CRC and 
resident agreed to such rate, and the lower rate does not result in a 
lower level of care than the resident requires. Conversely, the 
approving official would have the authority to approve a rate higher 
than the current average rate for residential care in the State or 
Region for the same level of care if the CRC and resident or authorized 
personal representative agreed to such rate, and the higher rate is 
related to the individual needs of the resident which exceed the base 
level of care as defined in paragraph (b).
    We received three comments. One commenter generally supported the 
rulemaking while two raised issues which we respond to here.
    One commenter stated that although the United States government 
assumes no responsibility for paying the cost for care in these 
facilities, it provides the eligibility requirements under which the 
residents referred by VA are to receive assistance. The commenter 
stated that this limits patient choice options and financially neglects 
patients needing assistance outside of hospital stays. The commenter 
asserted that the federal government should provide financial 
assistance to this population much like it does for the veteran 
homeless community with the Grant and Per Diem program in which it pays 
entities providing transitional housing to homeless veterans. 
Additionally, the commenter expressed concern that the proposed rule 
does not ensure criteria for standardizing levels of care which may 
subject veterans to inequalities in care. The commenter further 
asserted that this proposed rule may result in a high occurrence of low 
level care being suggested to save on payment for services. 
Furthermore, the commenter stated that there are no insurances or 
safeguards to ensure that care evaluation costs for lower levels of 
care rendered are not overinflated to justify a larger budget request. 
The commenter asserted that in this case a veteran would not be given a 
choice above VA standards which may be lower than what the veteran 
actually needs.
    The CRC program provides a form of enriched housing and health care 
supervision to eligible veterans not in need of acute hospital care but 
who, because of medical and/or psychosocial health conditions, are not 
able to live independently and have no suitable family or significant 
others to provide the needed supervision and supportive care. VA does 
not have the authority to provide financial assistance to veterans 
through the CRC program, and providing such assistance through another 
vehicle is outside the scope of this rulemaking. Also, this rulemaking 
does address standardization of care by requiring CRCs to provide a 
base level of care. CRCs must provide, at a minimum, room and board; 
nutrition consisting of three meals per day and two snacks, or as 
required to meet special dietary needs; laundry services; 
transportation (either provided or arranged) to VA and healthcare 
appointments, and accompanying the resident if needed; 24-hour 
supervision, if indicated; care supervision, and assistance with 
activities of daily living and independent activities of daily living. 
CRCs are also required to provide medically appropriate level of care 
for residents who require more than a base level of care. VA does not 
provide financial assistance to veterans through the CRC program nor 
does it determine the average rate for residential care in each state 
or region; thus, the determination of level of care needed by a veteran 
residing in a CRC is based solely on clinical need. Additionally, VA 
uses a multi-step approach in evaluating whether a proposed CRC rate 
will be approved. This approach includes a review of the level of care 
a veteran requires; the current average rate of residential care in the 
state or region for the same level of care provided to the resident, as 
determined by each state; and the current CRC rate being charged to a 
veteran. This review ensures that a veteran receives the individualized 
level of care required, and that the CRC is compensated for the level 
of care provided. We make no changes based on this comment.
    Another commenter stated that VA should pay for CRC care. While VA 
is authorized to operate the CRC program under 38 U.S.C. 1730, the 
statute explicitly exempts VA from any responsibility for payment for 
CRC care. The statute also states that VA may assist a veteran by 
referring such veteran for placement, and aiding such veteran in 
obtaining placement, in a VA-approved CRC. Per 38 U.S.C. 1730(b)(3), 
payment of the charges of a CRC for any care or service provided to a 
veteran whom VA has referred to that facility is not the responsibility 
of the United States or VA. We make no changes based on this comment.
    In this final rule, we are also making minor technical amendments 
and corrections. These changes are non-substantive but are necessary to 
remedy drafting errors in the proposed rule. We are amending the 
authority citation in this final rule to only reflect the CFR sections 
that are affected by this rule, which are Sec. Sec.  17.61 through 
17.74. Also, in Sec.  17.62 we are amending typographical errors in the 
definitions for ``activities of daily living'' and ``instrumental 
activities of daily living'' by replacing the uppercase letter 
following the colon with its matching lowercase letter. Furthermore, in 
Sec.  17.63(k)(4)(i) we are also amending a typographical error by 
replacing the first uppercase letter in the section with the matching 
lowercase letter.

[[Page 33696]]

    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

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521). Under 38 CFR 17.63(i), a CRC must maintain records on each 
resident, to include a copy of all signed agreements with the resident. 
This would include any agreement between the CRC and the resident 
regarding the rate charged for residence in the facility, which is the 
subject of this final rule. This information collection is already 
approved under Office of Management and Budget (OMB) control number 
2900-0491.

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 would amend Sec.  17.63 which governs the 
standards applicable to a community residential care facility (CRC) 
approved by VA. This final rule would merely conform this regulation 
with our current practices. This final rule would directly affect only 
individuals and those small entities that seek inclusion on VA's 
approved list of CRCs. Therefore, pursuant to 5 U.S.C. 605(b), this 
rulemaking is exempt from the initial and final regulatory flexibility 
analysis requirements of 5 U.S.C. 603 and 604.

Executive Orders 12866, 13563, and 13771

    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 website at 
http://www.va.gov/orpm, by following the link for ``VA Regulations 
Published.'' This final rule is not an E.O. 13771 regulatory action 
because this rule is not significant under E.O. 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 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 64.011--Veterans Dental Care; 
64.012--Veterans Prescription Service; 64.013--Veterans Prosthetic 
Appliances; 64.029--Purchase Care Program; 64.035--Veterans 
Transportation Program; 64.041--VHA Outpatient Specialty Care; 64.044--
VHA Home Care; 64.045--VHA Outpatient Ancillary Services; 64.047--VHA 
Primary Care; 64.048--VHA Mental Health clinics; 64.050--VHA Diagnostic 
Care.

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, Grant programs-veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Medical and 
Dental schools, Medical devices, Medical research, Mental health 
programs, Nursing homes, Reporting and recordkeeping requirements, 
Travel and transportation expenses, Veterans.

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. Robert L. 
Wilkie, Secretary, Department of Veterans Affairs, approved this 
document on July 9, 2019, for publication.

    Dated: July 9, 2019.
Consuela Benjamin,
Regulations Development Coordinator, 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 is amended by adding an authority 
for Sec. Sec.  17.61 through 17.74 to read as follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.
* * * * *
    Sections 17.61 through 17.74 are also issued under 38 U.S.C. 
1730.
* * * * *


Sec.  17.61  [Amended]

0
2. Amend Sec.  17.61 by:
0
a. Removing in paragraph (b) the words ``daily living activities'' and

[[Page 33697]]

adding in its place the words ``activities of daily living and 
instrumental activities of daily living''; and
0
b. Removing the statutory authority citation at the end of the section.

0
3. Revise Sec.  17.62 to read as follows:


Sec.  17.62  Definitions.

    For the purpose of Sec. Sec.  17.61 through 17.72:
    Activities of daily living means basic daily tasks an individual 
performs as part of self-care which may be used as a measurement of the 
functional status of a person including: Walking; bathing, shaving, 
brushing teeth, combing hair; dressing; eating; getting in or getting 
out of bed; and toileting.
    Approving official means the Director or, if designated by the 
Director, the Associate Director or Chief of Staff of a Department of 
Veterans Affairs Medical Center or Outpatient Clinic which has 
jurisdiction to approve a community residential care facility.
    Community residential care means the monitoring, supervision, and 
assistance, in accordance with a statement of needed care, of the 
activities of daily living activities and instrumental activities of 
daily living, of referred veterans in an approved home in the community 
by the facility's provider.
    Hearing official means the Director or, if designated by the 
Director, the Associate Director or Chief of Staff of a Department of 
Veterans Affairs Medical Center or Outpatient Clinic which has 
jurisdiction to approve a community residential care facility.
    Instrumental activities of daily living are tasks that are not 
necessary for fundamental functioning, but allow an individual to live 
independently in a community. Instrumental activities of daily living 
include: Housekeeping and cleaning room; meal preparation; taking 
medications; laundry; assistance with transportation; shopping--for 
groceries, clothing or other items; ability to use the telephone; 
ability to manage finances; writing letters; and obtaining 
appointments.
    Oral hearing means the in person testimony of representatives of a 
community residential care facility and of VA before the hearing 
official and the review of the written evidence of record by that 
official.
    Paper hearing means a review of the written evidence of record by 
the hearing official.

0
4. Amend Sec.  17.63 by:
0
a. Adding paragraph (b);
0
b. Revising paragraph (k); and
0
c. Removing the statutory authority citation at the end of the section.
    The addition and revision read as follows:


Sec.  17.63  Approval of community residential care facilities.

* * * * *
    (b) Level of care. The community residential care facility must 
provide the resident, at a minimum, a base level of care to include 
room and board; nutrition consisting of three meals per day and two 
snacks, or as required to meet special dietary needs; laundry services; 
transportation (either provided or arranged) to VA and healthcare 
appointments; and accompanying the resident to appointments if needed; 
24-hour supervision, if indicated; and care, supervision, and 
assistance with activities of daily living and instrumental activities 
of daily living. In those cases where the resident requires more than a 
base level of care, the medically appropriate level of care must be 
provided.
* * * * *
    (k) Cost of community residential care. (1) Payment for the charges 
of community residential care is not the responsibility of the United 
States Government or VA.
    (2) The cost of community residential care should reflect the cost 
of providing the base level of care as defined in paragraph (b) of this 
section.
    (3) The resident or an authorized personal representative and a 
representative of the community residential care facility must agree 
upon the charge and payment procedures for community residential care. 
Any agreement between the resident or an authorized personal 
representative and the community residential care facility must be 
approved by the approving official. The charge for care in a community 
residential care facility must be reviewed annually by the facility and 
VA, or as required due to changes in care needs.
    (4) The charges for community residential care must be reasonable 
and comparable to the current average rate for residential care in the 
State or Region for the same level of care provided to the resident. 
Notwithstanding, any year to year increase in the charge for care in a 
community residential care facility for the same level of care may not 
exceed the annual percentage increase in the National Consumer Price 
Index (CPI) for that year. In establishing an individual residential 
rate, consideration should be given to the level of care required and 
the individual needs of the resident. The approving official may 
approve a rate:
    (i) Lower than the current average rate for residential care in the 
State or Region for the same level of care if the community residential 
care facility and the resident or authorized personal representative 
agreed to such rate, provided such lower rate does not result in a 
lower level of care than the resident requires;
    (ii) higher than the current average rate for residential care in 
the State or Region for the same level of care if the community 
residential care facility and the resident or authorized personal 
representative agreed to such rate, and the higher rate is related to 
the individual needs of the resident which exceed the base level of 
care as defined in paragraph (b) of this section. Examples of services 
which exceed the base level of care include, but are not limited to, 
handling disbursement of funds solely at the request of the resident; 
fulfilling special dietary requests by the resident or family member; 
accompanying the resident to an activity center; assisting in or 
providing scheduled socialization activities; supervision of an unsafe 
smoker; bowel and bladder care; intervention related to behavioral 
issues; and transportation other than for VA and healthcare 
appointments.
    (5) The approving official may approve a deviation from the 
requirements of paragraph (k)(4) of this section if the resident 
chooses to pay more for care at a facility which exceeds the base level 
of care as defined in paragraph (b) of this section notwithstanding the 
resident's needs.
* * * * *


Sec. Sec.  17.64 through 17.74  [Amended]

0
5. Amend Sec. Sec.  17.64 through 17.74 by removing the statutory 
authority citation at the end of each section.

[FR Doc. 2019-14918 Filed 7-12-19; 8:45 am]
 BILLING CODE 8320-01-P