PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Amendment of section 760.5 of Title 10 NYCRR.

Preservation of public health and general welfare.

This amendment to Title 10 NYCRR section 760.5 is being filed as an emergency action due to the need to facilitate the transition of Medicaid cases from traditional fee-for-service programs to managed care, managed long term care plans, integrated health systems, and other types of care coordination models as required under the 2011-12 budget. Authority to file such emergency regulations is set forth in Chapter 59 of the Laws of 2011, Part H, § 103(t). It is further necessary to file the proposed rule on an emergency basis due to the need to improve access and patient choice in counties with limited access.

Establishment of Certified Home Health Agencies (CHHAs).

To establish new or expand existing CHHAs to promote cost effectiveness and integration of health care coordination of services.

Section 760.5 is amended by adding new subdivision (l) to read as follows:

Section 760.5 – Determinations of public need.

to serve only as an emergency adoption, to be valid for 90 days or less. This rule expires July 1, 2012.

Katherine Ceroalo, DOH, Bureau of House Counsel, Reg. Affairs Unit, Room 2438, ESP Tower Building, Albany, NY 12237, (518) 473-7488, email: [email protected]

Statutory Authority:

Section 3612 of the Public Health Law authorizes the Public Health and Health Planning Council to develop regulations pertaining to the establishment of and standards applicable to certified home health agencies (CHHAs).

Legislative Objectives:

Article 3612 of the Public Health Law provides for the establishment of CHHAs to provide home health services Medicaid recipients with chronic needs who can be served in the community in lieu of institutional care, which supports patient choice, leads to better care outcomes and decreases overall costs to the Medicaid program.

The 2011-12 budget enacted several significant initiatives recommended by the Medicaid Redesign Team (MRT), including the expansion of enrollment in the Medicaid managed care program. In particular, the budget reflected the Legislature adoption of the MRT's proposal to require the transition of Medicaid recipients who receive long term care services into Managed Long Term Care Plans (MLTCPs) or other care coordination models.

Needs and Benefits:

There are two objectives of this proposed rule.

First, the proposed rule will help facilitate the transition of Medicaid beneficiaries from traditional fee-for-service programs to managed care and MLTCPs, integrated health care systems and other types of care coordination models, as envisioned by the MRT and enacted in the 2011-12 budget. It is anticipated that CHHAs will play a central role in connection with these models and will enhance their ability to provide care coordination within the comprehensive array of services they provide and more fully meet the needs of their patients.

In particular, MLTCPs are facing an immediate influx of members who require community-based services that will more easily be provided by allowing the MLTCPs and other entities to establish CHHAs. The addition of home health care agencies will improve the ability of MLTCPs and other entities to provide care coordination to their members, ultimately resulting in cost savings to the Medicaid program, enhanced care coordination, and increased quality and efficiency in the provision of home health services to Medicaid recipients.

Second, the proposed rule will increase the number of CHHAs in New York State in those areas where patient choice of home health services is limited. Currently, there are 130 CHHA providers in New York State. Of these, 32 are county-operated agencies and 16 are sole providers within their county. In recent years, 17 county-operated CHHAs have closed, and an additional 18 counties have indicated to the Department that they intend to close or have a closure plan in place to occur over the next year. In many cases, closure of the county operated agencies will leave only one existing CHHA in the county, limiting patient access and choice in the selection of home health services.

By allowing establishment of new CHHAs and giving existing CHHAs the opportunity to expand their geographic service areas or populations served, of existing CHHAs, the rule will enhance access and improve choice for recipients with chronic illness, facilitating their ability to obtain home health services provided through a coordinated care approach. Accordingly, the rule will promote community-based care over costlier institutional care and encourage quality outcomes. Moreover, permitting new or expanded CHAAs will result in competition that may lower the costs of home health care services to the Medicaid program.

Costs:

Costs to Regulated Parties:

The rule does not impose any new compliance costs on regulated parties.

Costs to the Agency and to the State and Local Governments:

This rule should not impose any costs upon the Department of Health or New York State, except for incidental costs that may be associated with the issuance of a request for applications and evaluation of applications received. As discussed above, the rule is expected to promote utilization of community-based services, decreasing institutional health care costs in the Medicaid program.

Although local governments share a percentage of the costs in the Medicaid program, such participation is capped and as a result they would not bear a share of any incidental costs that may arise as a result of the proposed rule. If a local government operates a CHHA or wishes to establish a new CHHA, it would be impacted by this proposal to the same extent as other providers.

Local Government Mandates:

This rule imposes no mandates upon any county, city, town, village, school district, fire district, or other special district.

Paperwork:

The rule imposes no new reporting requirements, forms, or other paperwork upon regulated parties.

Duplication:

There are no relevant rules or other legal requirements of the Federal or State governments that duplicate, overlap, or conflict with this rule.

Alternatives:

There are no other alternatives that will allow the Department to achieve the objectives outlined above in a matter that expediently implements the MRT initiatives enacted as part of the 2011-12 budget.

Federal Standards:

The rule does not conflict with nor exceed any minimum standards of the Federal government for the same or similar subject area.

Compliance Schedule:

None.

Effect of Rule:

Local governments will not be affected by this rule except to the extent that they are providers of certified home health agency (CHHA) services and wish to file an application to expand their services, or do not provide CHHA services but wish to apply. Currently there are 32 county-based CHHAs in New York State.

The small businesses that will be affected by the proposed rule are CHHA providers which employ fewer than 100 persons, and which wish to file an application to expand their services. Based on the most recent data, there are approximately 21 CHHAs that are considered small businesses in New York State.

Compliance Requirements:

None.

Professional Services:

New CHHAs would be required to retain appropriate staff and existing agencies may need to hire additional staff if they were to expand their services, but any staffing required would only arise if agencies choose to submit an application for establishment or expansion pursuant to a request for applications issued in accordance with this rule.

Compliance Costs:

All candidates will be required to pay the $2,000 application fee. The application fees are statutorily mandated, in Public Health Law § 3605(13).

Economic and Technological Feasibility:

The proposed rules can be met with minimal economic and technological impact. This rule establishes approval criteria to determine the need to establish or expand existing CHHAs. The NYSDOH is not placing any new requirements on the regulated community. Accordingly, there are no economic or technical requirements being imposed on the regulated community.

Minimizing Adverse Impact:

There is no adverse impact expected on local governments or small businesses, except that small businesses that operate CHHAs may experience increased competition as a result of the rule. However, providing opportunities for additional or expanded CHHAs is necessary for the reasons outlined herein.

Small Business and Local Government Participations:

This rule is proposed as an emergency action because of the need to expedite implementation of the budget provisions, as authorized by Chapter 59 of the Laws of 2011, Part H, § 103(t), and to improve access and patient choice in counties with few CHHAs.

For Rules that Either Establish or Modify a Violation or Penalties Associated with a Violation:

This regulation does not create or modify any penalty. Consequently, no cure period has been considered.

Types and Estimated Numbers of Rural Areas:

All counties in New York State have rural areas with the exception of seven downstate counties. Counties with rural areas are served by 92 of the existing 130 CHHAs within the State.

Reporting, Recordkeeping and Other Compliance Requirements and Professional Services:

Providers will continue to have personnel and clinical record requirements and are expected to maintain a Health Commerce System account to communicate with the Department.

Professional personnel required of the certified home health agencies are unchanged from existing requirements.

Costs:

All candidates will be required to pay the $2,000 application fee. The application fees are statutorily mandated, in Public Health Law § 3605(13).

Minimizing Adverse Impact:

The proposed rule is expected to increase CHHA services in areas of the State, especially rural areas, where such services are limited. Accordingly, there is no adverse impact on rural areas.

Rural Area Participation:

Since this is an emergency rule making, the normal public participation could not be accommodated including rural area participation.

Nature of Impact:

This proposed rule is not expected to have an adverse impact on jobs and employment opportunities. The 130 certified home health agencies (CHHA) statewide directly employ approximately 54,290 full time equivalents (FTEs), most of whom are professionally licensed by the State Education Department and subject to the credentialing rules of that agency. By permitting new and expanded CHHAs, the proposed rule may create opportunities for retention of additional staff.

Categories and Numbers Affected:

Any new CHHAs established as a result of the proposed rule will be required to hire professional as well as support staff. A major reason for this rule is increased access in smaller rural counties and should have the effect of creating additional employment opportunities in these areas.

Regions of Adverse Impact:

None.

Minimizing Adverse Impact:

Not applicable.

Self-Employment Opportunities:

Not applicable.