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CMS Publishes Final Rule on Requirements for Long-Term Care Facilities

by Published On: Mar 21, 2013

The Centers for Medicare and Medicaid Services (CMS) issued a final rule, effective April 18, 2013, that implements Section 6113 of the Patient Protection and Affordable Care Act (PPACA) "to ensure that, in the case of a facility closure, individuals serving as administrators provide written notification of the impending closure and a plan for the relocation of residents at least 60 days prior to the impending closure or, if the secretary terminates the facility's participation in Medicare or Medicaid, not later than the date the secretary determines appropriate."

The interim final rule with comment was published by CMS on Feb. 18, 2011, and was effective March 23, 2011.  

Provisions of the Final Rule

Admission Transfer and Discharge - 483.12(a)(8)

  • In the case of a facility closure, any individual who is the administrator of the facility must provide written notification prior to the impending closure to the State Survey Agency, the state long-term care ombudsman, the residents, and the legal representatives or other responsible parties, as well as provide a plan for the transfer and adequate relocation of the residents.


  • 483.75(r) requires the administrator to submit to the State Survey Agency, the state long-term care ombudsman, residents and legal representatives or other responsible parties, written notification of an impending closure at least 60 days prior to the date of closure; or, in the case of a facility where the secretary terminates the facility's participation in the Medicare and/or Medicaid programs, not later than the date that the secretary determines appropriate for such notification.

  • Administrators are required to ensure the facility does not admit any new residents on or after the date written notification is submitted.

  • Administrators must include in the written notice a plan approved by the state for the transfer and adequate relocation of residents by a date specified prior to closure, including assurances that residents will be transferred to the most appropriate facility or other setting in terms of quality, services, and location, and taking into consideration the needs, choice, and best interests of each resident. 

    • In the Feb. 18, 2011, Interim Final Rule, CMS advised that it "expects that closure plans will clearly identify the steps to be taken by the facility; and the individual responsible for ensuring successful implementation." Examples provided included:

      • "Assessment of residents' care needs and the provision of appropriate services.
      • A plan for communicating with staff and/or unions.
      • Continuation of appropriate staffing levels and paychecks at the facility.
      • Provision of necessary supplies.
      • Identification of available facilities where residents could be transferred, along with an assessment of the quality of care provided by these facilities (for example, Minimum Data Set (MDS) OSCAR data).
      • A process for relocation of residents.
      • Operation and management of the facility and oversight of those managing the facility.
      • The roles and responsibilities of the facility's Administrator or replacement.
      • Sources of supplemental funding to assist in keeping a facility open until residents are transferred.
      • A plan for communicating with the secretary, the state long-term care ombudsman, residents and legal representatives of the residents or other responsible parties."
  • CMS states in the preamble to the final rule that further guidance will be issued regarding the elements of a closure plan.

  • 483.75(s) requires facilities to have in place policies and procedures that will ensure the administrator's duties and responsibilities involve providing the appropriate notices. [*This requirement is not explicitly mandated under the PPACA. However, as stated in the Preamble to the Interim Final Rule, CMS believes it is"… implicitly authorized by the terms of section 6113 of the PPACA and explicitly permitted by the general rulemaking authority of sections 1819(d)(4)(B) and 1919(d)(4)(B) of the [Social Security]Act, which permit the secretary to issue rules relating to the health, safety and well-being of residents, and rules concerning physical facilities."] 

    • Facilities will be cited for a deficiency under survey for failure to comply. 

Administrator Sanctions: Long-Term Care Facility Closures (488.446)

  • In accordance with the PPACA, civil monetary penalties (CMP) will be imposed on the individual administrator that fails to comply with the requirements at Sec. 483.75(r). CMS notes in the Preamble they agree with comments received citing potential situations where an administrator may have no control over closure procedures and "…may encounter a situation where adequate time to submit a notification of closure to the specified entities as required by §483.75(r)(1), was not given…" [e.g., if an administrator is hired to oversee a facility's impending closure, although he/she was not present when the decision was made to close; or an administrator is employed fewer than 60 days prior to closure].  CMS states however, that "…the lack of previous involvement does not relieve the administrator (at the time of closing) of the responsibility for implementing the plan and the procedures as required to the extent possible…In these instances, the administrator would be expected to provide the closure notice as soon as possible and begin implementing the plan for closure, working with the State Survey Agency for transferring the residents…From the time that the administrator was made aware of the closure, he or she would be responsible for compliance with this regulation."

  • Under the provisions of the PPACA, "…any individual who is the administrator of the facility that fails to comply with the requirements will be subject to a civil monetary penalty of up to $100,000; may be subject to exclusion from participation in any Federal health care program (as defined in section 1128B(f) of the Act); and will be subject to any other penalties that may be prescribed by law."

    • CMS states that the statutory language, i.e., "up to $100,000" established a maximum limit, but "…afforded CMS the discretion to determine the actual amount of the sanctions…Due to the many possible combinations of violations that could be cited, the amount of the penalty will be determined based on the survey findings." E.G., if it is determined that an administrator completely fails to take the necessary and timely actions to adhere to the closure requirements, potentially causing harm to residents, the administrator could be subject to additional CMPs.

    • Any sanctions levied against an administrator could also be reviewed by the state's licensing agency for possible disciplinary action, including suspension or termination of the administrator's license, in those states where applicable.   

  • Interpretive guidelines are being developed that will establish criteria for determination of its CMP amounts.

  • 498.5(m), allows for appeal by an administrator of a SNF/NF, entitling the administrator to a hearing before an Administrative Law Judge (ALJ); to request the Departmental Appeals Board (DAB) review of the hearing decision; and to seek judicial review of the Board's decision.

Facility Closure / Continued Payments  

  • Provides that the secretary may, as deemed appropriate, continue to make payments [to the SNF or, for a NF, to the state] with respect to residents of a long-term care facility that has submitted a notification of closure beginning on the date the notification is submitted and until/ending on the date the residents are successfully relocated.


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