Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 386 (2016GS)

Sponsor

Rep. Gibson, F.

Final action

Governor Signed 3/25/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• amends definitions;
• amends Medicaid certification provisions for nursing care facilities;
• amends provisions governing the transfer of a license for a Medicaid bed from a nursing care facility program to another entity;
• permits a related-party nonnursing-care-facility entity to hold a license for a Medicaid bed for a future nursing care facility program not yet identified;
• amends licensing requirements for a new nursing care facility;
• imposes a fine on certain health care facilities with Medicare inpatient revenue that exceeds a specified amount;
• requires the Department of Health to make rules specifying information a health care facility must submit to the department so that the department can determine whether the facility is subject to the fine;
• requires that fines be deposited into the Nursing Care Facilities Account;
• authorizes the use of money in the Nursing Care Facilities Account for Medicaid quality incentive payments made to nursing care facilities; and
• makes technical changes.

Every vote on this bill

Bill text

NURSING CARE FACILITY AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Francis D. Gibson
Senate Sponsor: 
Evan J. Vickers
LONG TITLE
General Description:
This bill amends the Health Care Facility Licensing and Inspection Act and other
provisions of the Utah Health Code.
Highlighted Provisions:
This bill:
▸ amends definitions;
▸ amends Medicaid certification provisions for nursing care facilities;
▸ amends provisions governing the transfer of a license for a Medicaid bed from a
nursing care facility program to another entity;
▸ permits a related-party nonnursing-care-facility entity to hold a license for a
Medicaid bed for a future nursing care facility program not yet identified;
▸ amends licensing requirements for a new nursing care facility;
▸ imposes a fine on certain health care facilities with Medicare inpatient revenue that
exceeds a specified amount;
▸ requires the Department of Health to make rules specifying information a health
care facility must submit to the department so that the department can determine
whether the facility is subject to the fine;
▸ requires that fines be deposited into the Nursing Care Facilities Account;
▸ authorizes the use of money in the Nursing Care Facilities Account for Medicaid
quality incentive payments made to nursing care facilities; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
26-18-501
, as last amended by Laws of Utah 2011, Chapters 297 and 366
26-18-502
, as last amended by Laws of Utah 2013, Chapter 60
26-18-503
, as last amended by Laws of Utah 2013, Chapter 60
26-18-505
, as last amended by Laws of Utah 2011, Chapter 297
26-21-23
, as last amended by Laws of Utah 2013, Chapter 60
26-35a-106
, as last amended by Laws of Utah 2010, Chapter 340
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
26-18-501
 is amended to read:
26-18-501.
Definitions.
As used in this part:
(1) "Certified program" means a nursing care facility program with Medicaid
certification.
(2) "Director" means the director of the Division of Health Care Financing.
(3) "Medicaid certification" means the right [
to Medicaid reimbursement
] 
of a nursing
care facility,
 as a provider of a nursing care facility program [
as established by division rule
]
, to
receive Medicaid reimbursement for a specified number of beds within the facility
.
(4) (a) "Nursing care facility" means the following facilities licensed by the department
under Chapter 21, Health Care Facility Licensing and Inspection Act:
(i) skilled nursing [
homes
] 
facilities
;
(ii) intermediate care facilities; and
(iii) an intermediate care facility for people with an intellectual disability.
(b) "Nursing care facility" does not mean a critical access hospital that meets the
criteria of 42 U.S.C. 1395i-4(c)(2) (1998).
(5) "Nursing care facility program" means the personnel, licenses, services, contracts
and all other requirements that shall be met for a nursing care facility to be eligible for
Medicaid certification under this part and division rule.
(6) "Physical facility" means the buildings or other physical structures where a nursing
care facility program is operated.
(7) "Rural county" means a county with a population of less than 50,000, as determined
by:
(a) the most recent official census or census estimate of the United States Census
Bureau; or
(b) the most recent population estimate for the county from the Utah Population
Estimates Committee, if a population figure for the county is not available under Subsection
(7)(a).
[
(7)
] 
(8)
 "Service area" means the boundaries of the distinct geographic area served by
a certified program as determined by the division in accordance with this part and division rule.
(9) "Urban county" means a county that is not a rural county.
Section 2. Section 
26-18-502
 is amended to read:
26-18-502.
Purpose -- Medicaid certification of nursing care facilities.
(1) The Legislature finds:
(a) that an oversupply of nursing care [
facility programs
] 
facilities
 in the state adversely
affects the state Medicaid program and the health of the people in the state; [
and
]
(b) it is in the best interest of the state to prohibit 
nursing care facilities from receiving
Medicaid certification [
of nursing care facility programs
], except as [
authorized
] 
provided
 by
this part[
.
]
; and
(c) it is in the best interest of the state to encourage aging nursing care facilities with
Medicaid certification to renovate the nursing care facilities' physical facilities so that the
quality of life and clinical services for Medicaid residents are preserved.
(2) Medicaid reimbursement of nursing care facility programs is limited to:
(a) the number of nursing care facility programs with Medicaid certification as of May
[
4, 2004
] 
9, 2016
; and
(b) additional nursing care facility programs approved for Medicaid certification under
the provisions of Subsections 
26-18-503
(5) and (7).
(3) The division may not:
(a) except as authorized by Section 
26-18-503
:
(i) process initial applications for Medicaid certification or execute provider
agreements with nursing care facility programs; or
(ii) reinstate Medicaid certification for a nursing care facility whose certification
expired or was terminated by action of the federal or state government; or
(b) execute a Medicaid provider agreement with a certified program that moves [
its
nursing care facility program
] to a different physical facility, except as authorized by
Subsection 
26-18-503
(3).
Section 3. Section 
26-18-503
 is amended to read:
26-18-503.
Authorization to renew, transfer, or increase Medicaid certified
programs -- Reimbursement methodology.
(1) (a) The division may renew Medicaid certification of a certified program if the
program, without lapse in service to Medicaid recipients, has its nursing care facility program
certified by the division at the same physical facility as long as the licensed and certified bed
capacity at the facility has not been expanded, unless the director has approved additional beds
in accordance with Subsection (5).
(b) The division may renew Medicaid certification of a nursing care facility program
that is not currently certified if:
(i) since the day on which the program last operated with Medicaid certification:
(A) the physical facility where the program operated has functioned solely and
continuously as a nursing care facility; and
(B) the owner of the program has not, under this section or Section 
26-18-505
,
transferred to another nursing care facility program the license for any of the Medicaid beds in
the program; and
(ii) the number of beds granted renewed Medicaid certification does not exceed the
number of beds certified at the time the program last operated with Medicaid certification,
excluding a period of time where the program operated with temporary certification under
Subsection 
26-18-504
(4).
(2) (a) The division may issue a Medicaid certification for a new nursing care facility
program if a current owner of the Medicaid certified program transfers its ownership of the
Medicaid certification to the new nursing care facility program and the new nursing care
facility program meets all of the following conditions:
(i) the new nursing care facility program operates at the same physical facility as the
previous Medicaid certified program;
(ii) the new nursing care facility program gives a written assurance to the director in
accordance with Subsection (4);
(iii) the new nursing care facility program receives the Medicaid certification within
one year of the date the previously certified program ceased to provide medical assistance to a
Medicaid recipient; and
(iv) the licensed and certified bed capacity at the facility has not been expanded, unless
the director has approved additional beds in accordance with Subsection (5).
(b) A nursing care facility program that receives Medicaid certification under the
provisions of Subsection (2)(a) does not assume the Medicaid liabilities of the previous nursing
care facility program if the new nursing care facility program:
(i) is not owned in whole or in part by the previous nursing care facility program; or
(ii) is not a successor in interest of the previous nursing care facility program.
(3) The division may issue a Medicaid certification to a nursing care facility program
that was previously a certified program but now resides in a new or renovated physical facility
if the nursing care facility program meets all of the following:
(a) the nursing care facility program met all applicable requirements for Medicaid
certification at the time of closure;
(b) the new or renovated physical facility is in the same county or within a five-mile
radius of the original physical facility;
(c) the time between which the certified program ceased to operate in the original
facility and will begin to operate in the new physical facility is not more than three years;
(d) if Subsection (3)(c) applies, the certified program notifies the department within 90
days after ceasing operations in its original facility, of its intent to retain its Medicaid
certification;
(e) the provider gives written assurance to the director in accordance with Subsection
(4) that no third party has a legitimate claim to operate a certified program at the previous
physical facility; and
(f) the bed capacity in the physical facility has not been expanded unless the director
has approved additional beds in accordance with Subsection (5).
(4) (a) The entity requesting Medicaid certification under Subsections (2) and (3) shall
give written assurances satisfactory to the director or the director's designee that:
(i) no third party has a legitimate claim to operate the certified program;
(ii) the requesting entity agrees to defend and indemnify the department against any
claims by a third party who may assert a right to operate the certified program; and
(iii) if a third party is found, by final agency action of the department after exhaustion
of all administrative and judicial appeal rights, to be entitled to operate a certified program at
the physical facility the certified program shall voluntarily comply with Subsection (4)(b).
(b) If a finding is made under the provisions of Subsection (4)(a)(iii):
(i) the certified program shall immediately surrender its Medicaid certification and
comply with division rules regarding billing for Medicaid and the provision of services to
Medicaid patients; and
(ii) the department shall transfer the surrendered Medicaid certification to the third
party who prevailed under Subsection (4)(a)(iii).
(5) (a) As provided in Subsection 
26-18-502
(2)(b), the director [
shall issue additional
Medicaid certification when requested by a
] 
may approve additional nursing care facility
programs for Medicaid certification, or additional beds for Medicaid certification within an
existing nursing care facility program, if a
 nursing care facility or other interested party [
if there
is insufficient bed capacity with current certified programs in a service area. A determination
of insufficient bed capacity shall be based on the nursing care facility or other interested party
providing reasonable evidence of an inadequate number of beds in
] 
requests Medicaid
certification for a nursing care facility program or additional beds within an existing nursing
care facility program, and the nursing care facility program or other interested party complies
with this section.
(b) The nursing care facility or other interested party requesting Medicaid certification
for a nursing care facility program or additional beds within an existing nursing care facility
program under Subsection (5)(a) shall submit to the director:
(i) proof of the following as reasonable evidence that bed capacity provided by
Medicaid certified programs within
 the county or group of counties impacted by the requested
additional
 Medicaid certification [
based on
] 
is insufficient
:
[
(i) current demographics which demonstrate
]
(A)
 nursing care facility occupancy levels [
of at least 90%
] for all existing and
proposed facilities [
within a prospective three-year period
] 
will be at least 90% for the next
three years
;
[
(ii)
] 
(B)
 current nursing care facility occupancy [
levels of 90%
] 
is 90% or more
; or
[
(iii)
] 
(C) there is
 no other nursing care facility within a 35-mile radius of the nursing
care facility requesting the additional certification[
.
]
; and
[
(b) In addition to the requirements of Subsection (5)(a), a nursing care facility
program shall demonstrate by an independent analysis that the nursing care facility can
financially support itself at an after tax break-even net income level based on projected
occupancy levels.
]
[
(c) When making a determination to certify additional beds or an additional nursing
care facility program under Subsection (5)(a):
]
[
(i) the director shall consider whether the nursing care facility will offer specialized or
unique services that are underserved in a service area;
]
(ii) an independent analysis demonstrating that at projected occupancy rates the nursing
care facility's after-tax net income is sufficient for the facility to be financially viable.
(c) The director shall determine whether to issue additional Medicaid certification by
considering:
(i) whether bed capacity provided by certified programs within the county or group of
counties impacted by the requested additional Medicaid certification is insufficient, based on
the information submitted to the director under Subsection (5)(b);
(ii) whether the county or group of counties impacted by the requested additional
Medicaid certification is underserved by specialized or unique services that would be provided
by the nursing care facility;
[
(ii) the director shall consider
] 
(iii)
 whether any Medicaid certified beds are subject to
a claim by a previous certified program that may reopen under the provisions of Subsections
(2) and (3); and
[
(iii) the director may consider how to add
]
(iv) how
 additional 
bed
 capacity 
should be added
 to the long-term care delivery system
to best meet the needs of Medicaid recipients
, which may include the renovation of aging
nursing care facilities, as permitted by Subsection (7)
.
(6) The department shall adopt administrative rules in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act, to adjust the Medicaid nursing care facility
property reimbursement methodology to:
(a) [
beginning July 1, 2008,
] only pay that portion of the property component of rates,
representing actual bed usage by Medicaid clients as a percentage of the greater of:
(i) actual occupancy; or
(ii) (A) for a nursing care facility other than a facility described in Subsection
(6)(a)(ii)(B), 85% of total bed capacity; or
(B) for a rural nursing care facility, 65% of total bed capacity; and
(b) [
beginning July 1, 2008,
] not allow for increases in reimbursement for property
values without major renovation or replacement projects as defined by the department by rule.
(7) (a) Notwithstanding Subsection 
26-18-504
(4), if a nursing care facility does not
seek Medicaid certification for a bed under [
the provisions of
] Subsections (1) through (6), the
department shall grant Medicaid certification for [
a licensed non-Medicaid certified bed
]
additional beds in an existing Medicaid certified nursing care facility that has 90 or fewer
licensed beds, including Medicaid certified beds, in the facility
 if:
(i) the nursing care facility [
is licensed under Subsection 
26-21-23
(2)(b)
] 
program was
previously a certified program for all beds but now resides in a new facility or in a facility that
underwent major renovations involving major structural changes, and 50% or greater facility
square footage design changes, requiring review and approval by the department
;
(ii) the nursing care facility meets the quality of care regulations issued by the Center
for Medicare and Medicaid Services; 
and
[
(iii) the Medicaid certified bed will be used by a patient who:
]
[
(A) is a resident of the nursing care facility;
]
[
(B) has exhausted the patient's Medicare benefits for skilled nursing services; and
]
[
(C) qualifies for Medicaid; and
]
[
(iv)
] 
(iii)
 the total number of [
licensed
] 
additional
 beds in the facility [
that are
] granted
Medicaid certification under [
the provisions of this Subsection (7)(a)
] 
this section
 does not
exceed 10% of the [
total
] number of licensed beds in the facility.
(b) The department may not revoke the Medicaid certification of a bed under this
Subsection (7) as long as the provisions of [
Subsections
] 
Subsection
 (7)(a)(ii) [
and (iii)
] are
met.
(8) (a) If a nursing care facility or other interested party indicates in its request for
additional Medicaid certification under Subsection (5)(a) that the facility will offer specialized
or unique services, but the facility does not offer those services after receiving additional
Medicaid certification, the director may revoke the additional Medicaid certification.
(b) If a nursing care facility or other interested party obtains Medicaid certification for
a nursing care facility program or additional beds within an existing nursing care facility
program under Subsection (5), but Medicaid reimbursement is not received for a bed within
three years of the date on which Medicaid certification was obtained for the bed under
Subsection (5), Medicaid certification for the bed is revoked.
Section 4. Section 
26-18-505
 is amended to read:
26-18-505.
Authorization to sell or transfer licensed Medicaid beds -- Duties of
transferor -- Duties of transferee -- Duties of division.
(1) This section provides a method to transfer 
or sell
 the license for a Medicaid bed
from [
one
] 
a
 nursing care facility program to another entity that is in addition to the
authorization to transfer under Section 
26-18-503
.
(2) (a) A nursing care facility program may transfer or sell one or more of its licenses
for Medicaid beds in accordance with Subsection (2)(b) if:
(i) at the time of the transfer, and with respect to the license for the Medicaid bed that
will be transferred, the nursing care facility program that will transfer the Medicaid license
meets all applicable regulations for Medicaid certification;
(ii) 30 days prior to the transfer, the nursing care facility program gives a written
assurance to the director and to the transferee in accordance with Subsection 
26-18-503
(4);
[
and
]
(iii) 30 days prior to the transfer, the nursing care facility program that will transfer the
license for a Medicaid bed notifies the division in writing of:
(A) the number of bed licenses that will be transferred;
(B) the date of the transfer; and
(C) the identity and location of the entity receiving the transferred licenses[
.
]
; and
(iv) if the nursing care facility program for which the license will be transferred or
purchased is located in an urban county with a nursing care facility average annual occupancy
rate over the previous two years less than or equal to 75%, the nursing care facility program
transferring or selling the license demonstrates to the satisfaction of the director that the sale or
transfer:
(A) will not result in an excessive number of Medicaid certified beds within the county
or group of counties that would be impacted by the transfer or sale; and
(B) best meets the needs of Medicaid recipients.
(b) [
A
] 
Except as provided in Subsection (2)(c), a
 nursing care facility program may
transfer or sell one or more of its licenses for Medicaid beds to:
(i) a nursing care facility program that has the same owner or successor in interest of
the same owner;
(ii) a nursing care facility program that has a different owner; [
or
]
(iii) 
notwithstanding Section 
26-18-502
,
 an entity that intends to establish a nursing
care facility program[
.
]
; or
(iv) notwithstanding Section 
26-18-502
, a related-party nonnursing-care-facility entity
that wants to hold one or more of the licenses for a future nursing care facility program not yet
identified, as long as:
(A) the licenses are subsequently transferred or sold to a nursing care facility program
within three years; and
(B) the nursing care facility program notifies the director of the transfer or sale in
accordance with Subsection (2)(a)(iii).
(c) A nursing care facility program may not transfer or sell one or more of its licenses
for Medicaid beds to an entity under Subsection (2)(b)(i), (ii), (iii), or (iv) that is located in a
rural county unless the entity requests, and the director issues, Medicaid certification for the
beds under Subsection 
26-18-503
(5).
(3) An entity 
under Subsection (2)(b)(i), (ii), (iii), or (iv)
 that receives or purchases a
license for a Medicaid bed 
under Subsection (2)(b)
:
(a) may receive a license for a Medicaid bed from more than one nursing care facility
program;
(b) within 14 days of seeking Medicaid certification of beds in the nursing care facility
program, give the division notice of the total number of licenses for Medicaid beds that the
entity received and who it received the licenses from;
(c) may only seek Medicaid certification for the number of licensed beds in the nursing
care facility program equal to the total number of licenses for Medicaid beds received by the
entity[
, multiplied by a conversion factor of .7, and rounded down to the lowest integer
];
(d) 
notwithstanding Section 
26-18-502
,
 does not have to demonstrate need 
or seek
approval
 for the Medicaid licensed [
beds
] 
bed
 under Subsection 
26-18-503
(5)
, except as
provided in Subsections (2)(a)(iv) and (2)(c) 
;
(e) shall meet the standards for Medicaid certification other than those in Subsection
26-18-503
(5), including personnel, services, contracts, and licensing of facilities under Chapter
21, Health Care Facility Licensing and Inspection Act; and
(f) shall obtain Medicaid certification for the licensed Medicaid beds within three years
of the date of transfer as documented under Subsection (2)(a)(iii)(B).
[
(4) The conversion formula required by Subsection (3)(c) shall be calculated:
]
[
(a) when the nursing care facility program applies to the Department for Medicaid
certification of the licensed beds; and
]
[
(b) based on the total number of licenses for Medicaid beds transferred to the nursing
care facility at the time of the request for Medicaid certification.
]
[
(5)
] 
(4)
 (a) When the division receives notice of a transfer of a license for a Medicaid
bed under Subsection (2)(a)(iii)(A), the [
division
] 
department
 shall reduce the number of
licenses for Medicaid beds at the transferring nursing care facility:
(i) equal to the number of licenses transferred; and
(ii) effective on the date of the transfer as reported under Subsection (2)(a)(iii)(B).
(b) For purposes of Section 
26-18-502
, the division shall approve Medicaid
certification for the receiving entity:
(i) in accordance with the formula established in Subsection (3)(c); and
(ii) if:
(A) the nursing care facility seeks Medicaid certification for the transferred licenses
within the time limit required by Subsection (3)(f); and
(B) the nursing care facility program meets other requirements for Medicaid
certification under Subsection (3)(e).
(c) A license for a Medicaid bed may not be approved for Medicaid certification
without meeting the requirements of Sections 
26-18-502
 and 
26-18-503
 if:
(i) the license for a Medicaid bed is transferred under this section but the receiving
entity does not obtain Medicaid certification for the licensed bed within the time required by
Subsection (3)(f); or
(ii) the license for a Medicaid bed is transferred under this section but the license is no
longer eligible for Medicaid certification as a result of the conversion factor established in
Subsection (3)(c).
Section 5. Section 
26-21-23
 is amended to read:
26-21-23.
Licensing of a new nursing care facility -- Approval for a licensed bed
in an existing nursing care facility -- Fine for excess Medicare inpatient revenue.
[
(1) Notwithstanding the provisions of Section 
26-21-2
, for purposes of this section
"nursing
]
(1) Notwithstanding Section 
26-21-2
, as used in this section:
(a) "Medicaid" means the Medicaid program, as that term is defined in Section
26-18-2
.
(b) "Medicaid certification" means the same as that term is defined in Section
26-18-501
.
(c) "Nursing
 care facility" and "small health care facility":
[
(a)
] 
(i)
 mean the following facilities licensed by the department under this chapter:
[
(i)
] 
(A) a
 skilled nursing [
homes
] 
facility
;
[
(ii)
] 
(B) an
 intermediate care [
facilities
] 
facility
; or
[
(iii)
] 
(C) a
 small health care [
facilities
] 
facility
 with four to 16 beds functioning as a
skilled nursing [
home
] 
facility
; and
[
(b) does
] 
(ii) do
 not mean:
[
(i)
] 
(A)
 an intermediate care facility for the [
mentally retarded
] 
intellectually disabled
;
[
(ii)
] 
(B)
 a critical access hospital that meets the criteria of 42 U.S.C. 1395i-4(c)(2)
(1998);
[
(iii)
] 
(C)
 a small health care facility that is hospital based; or
[
(iv)
] 
(D)
 a small health care facility other than a skilled nursing [
home
] 
care facility
with 
no more than
beds [
or less
].
(d) "Rural county" means the same as that term is defined in Section 
26-18-501
.
(2) Except as provided in Subsection [
(5)
] 
(6)
, a new nursing care facility shall be
approved for a health facility license only if [
the applicant proves to the division that
]:
(a) [
the facility will be Medicaid certified
] under the provisions of Section 
26-18-503
the facility's nursing care facility program has received Medicaid certification or will receive
Medicaid certification for each bed in the facility
;
[
(b) the facility will have at least 100 beds; or
]
[
(c) (i) the facility's projected Medicare inpatient revenues do not exceed 49% of the
facility's revenues;
]
[
(ii) the facility has identified projected non-Medicare inpatient revenue sources; and
]
[
(iii) the non-Medicare inpatient revenue sources identified in this Subsection
(2)(c)(iii) will constitute at least 51% of the revenues as demonstrated through an
independently certified feasibility study submitted and paid for by the facility and provided to
the division.
]
(b) the facility's nursing care facility program has received or will receive approval for
Medicaid certification under Subsection 
26-18-503
(5), if the facility is located in a rural
county; or
(c) (i) the applicant submits to the department the information described in Subsection
(3); and
(ii) based on that information, and in accordance with Subsection (4), the department
determines that approval of the license best meets the needs of the current and future patients
of nursing care facilities within the area impacted by the new facility.
(3) A new nursing care facility seeking licensure under Subsection (2) shall submit to
the department the following information:
(a) proof of the following as reasonable evidence that bed capacity provided by nursing
care facilities within the county or group of counties that would be impacted by the facility is
insufficient:
(i) nursing care facility occupancy within the county or group of counties:
(A) has been at least 75% during each of the past two years for all existing facilities
combined; and
(B) is projected to be at least 75% for all nursing care facilities combined that have
been approved for licensure but are not yet operational;
(ii) there is no other nursing care facility within a 35-mile radius of the new nursing
care facility seeking licensure under Subsection (2); and
(b) a feasibility study that:
(i) shows the facility's annual Medicare inpatient revenue, including Medicare
Advantage revenue, will not exceed 49% of the facility's annual total revenue during each of
the first three years of operation;
(ii) shows the facility will be financially viable if the annual occupancy rate is at least
88%;
(iii) shows the facility will be able to achieve financial viability;
(iv) shows the facility will not:
(A) have an adverse impact on existing or proposed nursing care facilities within the
county or group of counties that would be impacted by the facility; or
(B) be within a three-mile radius of an existing nursing care facility or a new nursing
care facility that has been approved for licensure but is not yet operational;
(v) is based on reasonable and verifiable demographic and economic assumptions;
(vi) is based on data consistent with department or other publicly available data; and
(vii) is based on existing sources of revenue.
(4) When determining under Subsection (2)(c) whether approval of a license for a new
nursing care facility best meets the needs of the current and future patients of nursing care
facilities within the area impacted by the new facility, the department shall consider:
(a) whether the county or group of counties that would be impacted by the facility is
underserved by specialized or unique services that would be provided by the facility; and
(b) how additional bed capacity should be added to the long-term care delivery system
to best meet the needs of current and future nursing care facility patients within the impacted
area.
[
(3)
] 
(5)
 The division may [
not
] approve the addition of 
a
 licensed [
beds
] 
bed
 in an
existing nursing care facility [
unless the nursing care facility satisfies the criteria established in
Subsection (2).
] 
only if:
(a) each time the facility seeks approval for the addition of a licensed bed, the facility
satisfies each requirement for licensure of a new nursing care facility in Subsections (2)(c), (3),
and (4); or
(b) the bed has been approved for Medicaid certification under Section 
26-18-503
 or
26-18-505
.
[
(4) The department may make rules to administer and enforce this part in accordance
with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
]
[
(5) The provisions of Subsection (2) do
]
(6) Subsection (2) does
 not apply to a nursing care facility that
:
(a)
 has[
:
]
, by the effective date of this act, submitted to the department schematic
drawings, and paid applicable fees, for a particular site or a site within a three-mile radius of
that site;
(b) before July 1, 2016:
[
(a)
] 
(i)
 filed an application with the department 
for licensure under this section
 and
paid all [
applicable
] 
related
 fees 
due
 to the department [
on or before February 28, 2007
]; and
[
(b)
] 
(ii)
 submitted to the department [
the working drawings
] 
architectural plans and
specifications
, as defined by the department by administrative rule, [
on or before July 1, 2008.
]
for the facility;
(c) applies for a license within three years of closing for renovation;
(d) replaces a nursing care facility that:
(i) closed within the past three years; or
(ii) is located within five miles of the facility;
(e) is undergoing a change of ownership, even if a government entity designates the
facility as a new nursing care facility; or
(f) is a state-owned veterans home, regardless of who operates the home.
(7) (a) For each year the annual Medicare inpatient revenue, including Medicare
Advantage revenue, of a nursing care facility approved for a health facility license under
Subsection (2)(c) exceeds 49% of the facility's total revenue for the year, the facility shall be
subject to a fine of $50,000, payable to the department.
(b) A nursing care facility approved for a health facility license under Subsection (2)(c)
shall submit to the department the information necessary for the department to annually
determine whether the facility is subject to the fine in Subsection (7)(a).
(c) The department:
(i) shall make rules, in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act, specifying the information a nursing care facility shall submit to the
department under Subsection (7)(b);
(ii) shall annually determine whether a facility is subject to the fine in Subsection
(7)(a);
(iii) may take one or more of the actions in Section 
26-21-11
 or 
26-23-6
 against a
facility for nonpayment of a fine due under Subsection (7)(a); and
(iv) shall deposit fines paid to the department under Subsection (7)(a) into the Nursing
Care Facilities Account, created by Section 
26-35a-106
.
Section 6. Section 
26-35a-106
 is amended to read:
26-35a-106.
Restricted account -- Creation -- Deposits -- Uses.
(1) (a) There is created a restricted account in the General Fund known as the "Nursing
Care Facilities Account" consisting of:
(i) proceeds from the assessment imposed by Section 
26-35a-104
 which shall be
deposited in the restricted account to be used for the purpose described in Subsection (1)(b);
(ii) fines paid by nursing care facilities for excessive Medicare inpatient revenue under
Section 
26-18-506
;
[
(ii)
] 
(iii)
 money appropriated or otherwise made available by the Legislature; and
[
(iii)
] 
(iv)
 any interest earned on the account.
(b) (i) Money in the account shall only be used:
(A) to the extent authorized by federal law, to obtain federal financial participation in
the Medicaid program;
(B) to provide the increased level of hospice reimbursement resulting from the nursing
care facilities assessment imposed under Section 
26-35a-104
;
(C) for the Medicaid program to make quality incentive payments to nursing care
facilities , subject to approval of a Medicaid state plan amendment to do so by the Centers for
Medicare and Medicaid Services within the United States Department of Health and Human
Services 
; and
[
(C)
] 
(D)
 in the manner described in Subsection (1)(b)(ii).
(ii) The money appropriated from the restricted account to the department:
(A) shall be used only to increase the rates paid prior to [
the effective date of this act
]
July 1, 2004,
 to nursing care facilities for providing services pursuant to the Medicaid program
and for administrative expenses as described in Subsection (1)(b)(ii)(C);
(B) may not be used to replace existing state expenditures paid to nursing care facilities
for providing services pursuant to the Medicaid program, except for increased costs due to
hospice reimbursement under Subsection (1)(b)(i)(B); and
(C) may be used for administrative expenses, if the administrative expenses for the
fiscal year do not exceed 3% of the money deposited into the restricted account during the
fiscal year.
(2) Money shall be appropriated from the restricted account to the department for the
purposes described in Subsection (1)(b) in accordance with Title 63J, Chapter 1, Budgetary
Procedures Act.
Section 7. 
Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
the date of veto override.