The proposed amendments to the residential health care facility (RHCF) bed need methodology were published in the State Register for public comment on March 31, 2010. At the end of the 45-day public comment period on May 17, the Department had received comments on the draft regulations from the New York Association of Homes and Services for the Aging (NYAHSA), the Healthcare Association of New York State (HANYS), and the Community Health Foundation of Western and Central New York (CHFWCNY). The Department also received additional comments on the proposed changes from the New York State Health Facilities Association (NYSHFA) at the May 27, 2010 joint meeting of the Planning and Codes committees of the State Hospital Review and Planning Council.

Comments in Support

Comments from these organizations in support of the published amendments favored the employment of a new base year of 2006 and a planning target year of 2016. They also favored the accompanying employment of more recent and inclusive data in the calculation of need, including the recognition of managed long-term care plans as a factor in the calculation of statewide and local services utilization rates. Their comments also expressed support for the provision requiring an interim evaluation of the amended methodology at the end of 2013.

Comments in Opposition

The two nursing home associations, NYAHSA and NYSHFA, along with the CHFWCNY, opposed the proposed change in 709.3(a) that would allow application of the need methodology to the renovation of existing RHCFs, to the transfer of RHCF beds between facilities, and to changes of ownership and other RHCF transactions subject to establishment review by the Public Health Council (PHC). These organizations contended that this provision would cause nursing home operators to refrain from undertaking necessary renovations and upgrades to their facilities and from adopting new models of RHCF care, lest doing so would result in a loss of beds. While not opposed to this provision per se, HANYS expressed concern that it be accompanied by a clear articulation of policies associated with its application, as well as by a process for public input in instances involving a possible reduction of 10 percent or more of an individual facility's beds.

The CHFWCNY called for a disapproval of the proposed amendments to 709.3 and for the issuance of an entirely new methodology within six months. The organization contended that the current methodology's blending of statewide and local utilization rates for long-term care services distorts the calculation of bed need at the county level; and that the Department should instead employ Upstate and Downstate regions in these blending calculations. The organization also asserted that the methodology does not take sufficient account of the effects of supportive housing and community-based care on RHCF bed need and that the imputed RHCF bed occupancy rate of 99 percent employed to refine the initial bed need calculations arrived at using the factors and procedures set forth in subdivision (d) of 709.3 should be lowered to 97 percent. Comments from NYSHFA contended that the need methodology would underestimate the number of RHCF beds needed by the year 2016, given the aging of the State's population and the growing reliance on RHCF's for post-acute, short-term care.

DOH Response

Comments on 709.3(a)

The comments against the application of the need methodology to RHCF renovations, bed transfers, and changes of ownership seem to presuppose a categorical and perhaps punitive use of this provision by the Department. It is, however, the Department's intention to employ this provision in a selective manner, on a case-by-case basis, and as a planning tool that will help ensure access to RHCF beds in the numbers needed, as identified by the need methodology. In doing so, the Department will take into account the circumstances of the individual facility, as well as local factors in the applicant facility's service area, as provided for in subdivisions (f), (h) and (j) of section 709.3. The Department also notes that the employment of this provision comports with the need to rightsize the long-term care system as called for by the Commission on Health Care Facilities in the Twenty-First Century (the Berger Commission) and with the Department's responsibility to ensure judicious use of the State's considerable investment of Medicaid funds in the construction of RHCF's and in the delivery of services to RHCF residents.

Comments on the Need Formula

In response to the call for a new need methodology by the CHFCWNY, the Department notes that that organization's concerns regarding a greater recognition of distinctive local and regional factors in the review of bed need are accommodated by subdivisions (f), (h) and (j) of section 709.3, which allow the consideration of local factors in the review of individual applications, including recent trends in occupancy in the local service area and in contiguous areas outside the applicant's individual county planning area. The Department also notes that the flexibility provided for in subdivisions (f), (h) and (j) is sufficient to compensate, as intended, for any distortions wrought by the blending of statewide and local pattern utilization rates in the calculation of bed need as set forth in subdivision (d). Because these statewide and local pattern utilization rates also include those for supportive housing and community-based services, the Department does not agree with the CHFCWNY's contention that the need methodology does not recognize sufficiently the impact of the recent and projected growth of these alternatives to RHCF care on the need for RHCF beds in the years ahead.

In response to NYSHFA's comment that the need methodology in section 709.3 underestimates bed need for the planning target year, the Department notes that the number of RHCF beds currently certified in the State is well below that estimated for the planning target year of 2007 in the current version of section 709.3. Moreover, occupancy of those certified beds is 94.1 percent statewide, well below the planning optimum of 97 percent. Given this experience, the Department does not expect that the bed need projections for 2016 will prove too low, nor that the imputed occupancy rate of 99 percent used in adjusting initial bed need calculations should be lowered to 97 percent, as called for by CHFWCNY. We also note that subdivision (d) calls for an evaluation of the need methodology by the end of 2013. Should any adjustments in bed need for the planning target year prove necessary, they can be made at that time.

Summary

While many constructive comments were submitted in response to the published amendments, the Department believes that they are accommodated by the flexibility afforded by subdivisions (f), (h) and (j) of the regulation and by the range of factors used in the calculation of bed need in subdivision (d). As noted, the provision for an interim evaluation of the need methodology in 2013 also allows for the correction of any bed need totals that prove necessary. The Department therefore will adopt the proposed text of Section 709.3 as published for comment in the State Register, as the final regulations.