Medicare and Medicaid Programs; Reform of Requirements For Long-Term Care Facilities

By Terri Harris, Susan Fradenburg and Katye Jobe


On October 4, 2016, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule reforming participation requirements for Skilled Nursing Facilities (“SNFs”). The rule will be implemented in three phases.  Phase 1 requirements should have been implemented by November 28, 2016, Phase 2 requirements must be implemented by November 28, 2017, and Phase 3 requirements must be implemented by November 28, 2019.  The final rule marks the first comprehensive update to the requirements for SNFs in 25 years. The rule contains completely new sections in addition to amendments to existing regulations, and we have highlighted selected changes in this article.

Notably, the rule includes a new pre-dispute ban on arbitration agreements between SNFs and their residents (or their representatives).  However, this ban was challenged by the American Health Care Association and others in a lawsuit filed on October 17, 2016. As a result, the section of the final rule prohibiting pre-dispute arbitration agreements was stayed and did not take effect on November 28, 2016, as originally planned. As of the date of this writing, the litigation challenging this part of the rule remains ongoing.  SNFs must still respond appropriately to the numerous other significant additions and changes contained in the rule that were implemented under the Phase 1 deadline of November 28, 2016.

I. Behavioral Health and Pharmacy
The following two provisions of the new rule relate to CMS‘s stated goal of improving behavioral healthcare in SNFs through an increased emphasis on social services and changes intended to reduce or eliminate “unnecessary” drugs. The provisions discussed below were implemented as part of Phase 1.

A. Pharmacy Services (new 42 C.F.R. § 483.45)

In the new regulations regarding pharmacy services (previously addressed in part in 42 C.F.R. § 483.60), CMS emphasizes the need to minimize medication errors and potential adverse events relating to medications. All parts of the pharmacy services section took effect in Phase 1 except the medical chart review requirement and psychotropic drugs provisions. To comply with the Phase 1 requirements, SNFs should have reviewed and updated policies and procedures to confirm that they address the following:

  • The SNF’s medical director must be on the list of individuals who must be notified of irregularities identified by the pharmacist during the resident‘s monthly Drug Regime Review (“DRR”);
  • Define “irregularities” to include the provision of any “unnecessary drugs;”
  • Document irregularities on a separate written report that is sent to the attending physician, the Medical Director, and the DON;
  • Ensure that at a minimum the pharmacist’s written report regarding the irregularity is dated and contains the resident’s name, relevant drug and identified irregularity;
  • Require documentation by the attending physician in the medical record that the irregularity has been reviewed and what, if any, action has been taken, or if no action is taken, the reasons why; and
  • Specify the timeframe for completing each of the above steps.

The definition of unnecessary drugs has not changed in substance, but there is a new definition of psychotropic drugs that took effect in Phase 1 in preparation for Phase 2 regulations limiting the use of psychotropic drugs. The definition for psychotropic drugs is “any drug that affects brain activities associated with mental processes and behavior.” It includes but is not limited to anti-psychotic, anti-depressant, anti-anxiety, and hypnotic drugs.

B. Behavioral Health (new 42 C.F.R. § 483.40)

CMS has dedicated an entirely new section in the final rule to emphasize the importance of behavioral health, moving existing Quality of Care regulations to the new section while simultaneously adding new provisions and defining behavioral health to encompass “a resident’s whole emotional and mental well-being, which includes, but is not limited to, the prevention and treatment of mental and substance use disorders.”  42 C.F.R. § 483.40.

As part of the Phase 1 changes, existing Quality of Care policies and procedures that were previously based upon the language of 42 C.F.R. §483.25(f) should have been revised to include references to residents with “a history of trauma and/or post-traumatic stress disorder. Additionally, the policies should clarify that the SNF provides “medically-related social services to attain or maintain the highest practicable physical, mental and psychosocial well-being of each resident.”

It is important to note that CMS has signaled that the addition of specific issues such as a history of trauma and/or post-traumatic stress disorder is not intended to exclude other types of disorders or problems. SNFs should continue to ensure that residents diagnosed with other mental disorders or psychosocial adjustment difficulties receive the appropriate treatment and services.

Although many significant changes in the behavioral health section take effect in Phase 2, including policies addressing residents with dementia diagnoses, the revisions suggested above are based upon portions of the rule that became effective as part of Phase 1

II. Staff Training, Facility Assessment, and Infection Control

A. Training Requirements (new 42 C.F.R. §483.95)

The final rule contains a new section, 42 C.F.R. § 483.95, that sets forth the requirements of an effective training program for all new and existing staff, contract staff, and volunteers in SNFs. Although most of the new training requirements will be implemented in later phases, several were implemented as part of Phase 1. We recommend that SNFs review their existing training policies and topics to make sure they address the following requirements:

  • Abuse, neglect, and exploitation training must include, at a minimum: activities that constitute abuse, neglect, and exploitation; procedures for reporting abuse, neglect, and exploitation; and dementia management as it relates to resident abuse prevention.
  • Nurse aides must receive in-service training for 12 or more hours per year, and the training must include dementia management training, resident abuse prevention training, and, for nurse aides providing services to individuals with cognitive impairments, the  care of individuals with cognitive impairments.
  • Feeding assistants may not work as feeding assistants until successfully completing a State-approved training program.

The remainder of the training requirements must be implemented as part of Phase 3.  In anticipation of these additional training requirements, careful planning will be needed to develop or enhance training on topics including:

  • Effective communications
  • Resident rights and facility responsibilities
  • Quality assurance and performance improvement
  • Infection control
  • Compliance and ethics
  • Behavioral health

B. Facility Assessment (new 42 C.F.R. §483.70)

The careful planning for training will be guided by the new comprehensive facility-wide assessment to be implemented as part of Phase 2. The new assessment protocol is in the administration regulation, 42 C.F.R. § 483.70, and requires a well-documented assessment of the entire facility to determine the resources necessary to care for residents competently during daily operations and emergencies, including staff training.

C. Infection Control (new 42 C.F.R. § 483.80)

Section 483.80 is also new and requires facilities to have an infection prevention and control program (“IPCP”).  Most elements of the IPCP should have been implemented as part of Phase 1. The IPCP will also need to include an antibiotic stewardship program by Phase 2 and designate at least one infection preventionist by Phase 3.  As part of Phase 1, the IPCP must include a system for preventing, identifying, reporting, investigating, and controlling infections and communicable diseases for all residents, staff, volunteers, visitors, and other individuals providing contract services. By Phase 2, the IPCP must be based on the facility’s comprehensive assessment and follow accepted national standards. Policies and procedures to be implemented as part of the IPCP in Phase 1 must include:

  • A system of surveillance designed to identify possible communicable diseases before they can spread
  • When and to whom reports must be made
  • Standard and transmission-based precautions
  • When and how isolation should be used
  • The circumstances under which the facility must prohibit employees from direct contact with residents or their food
  • Hand hygiene procedures to be followed by staff involved in direct resident contact

The antibiotic stewardship program to be implemented in Phase 2 must include antibiotic use protocols and a system to monitor antibiotic use as well as a system for recording incidents and corrective action. The infection preventionist that is hired as part of Phase 3 must have primary professional training in nursing, medical technology, microbiology, epidemiology, or other related fields and be qualified by education, training, experience, or certification; work at least part-time in the facility; and have completed specialized training in infection prevention and control. This infection preventionist must be part of the facility’s quality assurance committee. The IPCP section of the rule also requires that the facility develop policies and procedures to ensure that each resident is educated on the benefits and side effects of immunization for influenza and pneumococcal disease. The IPCP must be reviewed annually and updated as necessary.

III. Person-Centered Care, Resident Rights, and Quality

A. Comprehensive Person-Centered Care Planning (new 42 C.F.R. §483.21)

An entirely new section titled Comprehensive Person-Centered Care Planning was implemented in Phase 1 except for provisions relating to (a) baseline care planning within 48 hours of admission (implemented as part of Phase 2) and (b) trauma informed care (implemented as part of Phase 3). This section is intended to strengthen the rights of residents and promote resident choice by replacing the care planning requirements that were previously located in 42 C.F.R.  §483.20(k). The new section requires an even more detailed and exhaustive plan of care for each resident (regardless of length of stay) that is person-centered and includes the resident’s needs and preferences.

The requirements that facilities should have already implemented as part of Phase 1 include:

  • Adding a nurse aide and a food and nutrition services staff member to the interdisciplinary team responsible for developing the comprehensive care plan;
  • Developing and implementing a discharge planning process that prepares residents to be active partners in the process and includes regular updates; and
  • Adding applicable discharge requirements mandated by The Improving Medicare Post-Acute Transformation Act of 2014 (IMPACT Act).

In addition to revamping the care plan process, SNFs should also be aware of the new definitions included in §483.5 and update policies and procedures accordingly. For example, the definition of “person-centered care” is to “focus on the resident as the locus of control and support the resident in making their own choices and having control over their daily lives.” The same section also includes a comprehensive new definition of “resident representative” to include an individual chosen by the resident to act on the resident’s behalf, access medical information, and receive notifications, in addition to guardians and other legal representatives.

The discharge planning requirements assume that each resident will have the goal of returning home at some point. If that is not feasible, the facility must document in the resident’s record who made the decision that returning home is not feasible and why the decision was made.

Focusing on discharge goals to reduce the number of preventable readmissions is one of the aspirations behind the final rule. To that end, SNFs are required to adhere to new requirements set forth in §483.15 regarding admission, transfer, and discharge rights and the requirements set forth at §483.10 regarding the rights of a resident and an SNF’s responsibility to support those rights.

B. Resident Rights (revised 42 C.F.R. §483.10)

The final rule retains all existing residents’ rights and makes technical revisions to clarify and improve the statement of residents’ rights. The final rule also updates provisions to account for new technology, such as electronic and video communications. Except for the provisions relating to providing contact information for certain organizations and purposes, which will be implemented in Phase 2, this section of the rule was implemented in its entirety in Phase 1.

Notably, this section of the rule requires SNFs to provide written notice to residents at least 60 days prior to implementing any change to charges for items and services the SNF offers that are not covered by Medicare and/or the Medicaid State plan. In connection with the right to share a room with one’s spouse, or for a spouse to obtain access to a resident’s treatment information and medical records, the definition of spouse has been expanded to include same sex couples if their marriage was valid in the jurisdiction where it was celebrated.

This section also requires SNFs to provide equal access to quality of care and establish “identical policies and practices regarding transfer, discharge, and the provision of services under the State plan for all residents regardless of payment source.” SNFs must continue to have policies and procedures relating to visitation rights. The revised rule specifies that residents have a right to receive visitors at the time of their choosing. If SNFs intend to restrict the time for visitation, they need to be sure their written policies set forth clinical or safety reasons that support a restriction or limitation on visitation.  The rule also states that the SNF is considered a fiduciary of resident funds, and as such, SNFs must follow the section’s financial regulations. The regulations specify that SNFs cannot charge for special meals, food, or dietary supplements that have been ordered by a clinical professional. Under this section of the rule, SNFs are required to identify a grievance officer and update grievance policies according to the rule to ensure the prompt resolution of all grievances regarding the rights outlined in the section.

C. Admission, Transfer, and Discharge Rights (revised 42 C.F.R. §483.15)

Except for the provisions relating to documentation of transfer/discharge, which will be implemented in Phase 2, this section was implemented in Phase 1 in its entirety. According to this section of the rule, SNFs must establish and implement new or enhanced policies and procedures regarding admission, transfer, and discharge according to the rule’s terms. This section of the final rule also requires SNFs to establish and implement policies and procedures addressing readmissions.

The documentation provisions that take effect in Phase 2 require facilities to document certain additional information in residents’ medical records upon transfer or discharge. Furthermore, by the Phase 2 implementation deadline, SNFs will be required to exchange such information with the receiving provider upon transfer.

D. Quality of Life (new 42 C.F.R. §483.24)

While many of the requirements of this new section were previously included in the Quality of Care and other sections, it was determined that Quality of Life will be seen as a separate overarching principle in the delivery of care to residents and have a separate section. Consistent with the comprehensive plan of care (§483.21 discussed in III.A. above), this section of the final rule requires facilities, among other things, to provide the necessary care and services to ensure that a resident’s abilities in activities of daily living do not diminish unless the circumstances of the individual’s clinical condition demonstrate that such diminution was unavoidable. The regulation also provides additional information regarding the current requirement that SNFs have programs designed to meet residents’ interests and support the physical, mental, and psychosocial well-being of each resident. SNF programs must include a choice of activities that are facility-sponsored group and individual activities, as well as independent activities that encourage both independence and interaction in the community. Finally, the regulation specifies that SNFs must ensure that personnel provide basic life support, including CPR, to a resident requiring emergency care while waiting for the arrival of emergency medical personnel, subject to a physician’s orders and the resident’s advance directives. This section became effective in its entirety in Phase 1.

E. Quality of Care (revised 42 C.F.R. §483.25)

In addition to the Quality of Life section, this section further requires facilities to ensure that residents receive treatment and care in accordance with professional standards of practice, the comprehensive person-centered care plan (discussed above), and the residents’ choices. This section of the rule includes an explicit requirement that SNFs assist individuals in making podiatric appointments (the prior version of the rule included only a requirement that residents received proper treatment and foot care). Except for the provision relating to trauma-informed care, which will be implemented in Phase 3, this section was implemented in its entirety in Phase 1.

IV. Revisions to State Operations Manual

In a November 9, 2016, transmittal to State Agency Directors, the Centers for Medicare and Medicaid Services (“CMS”) announced that it has incorporated the rule changes into the State Operations Manual, Appendix PP. The revised version will be used for surveys occurring on and after November 28, 2016. The Interpretive Guidance has not yet been revised. CMS will issue a subsequent version of Appendix PP with updated Interpretive Guidance and a re-ordering of F-Tags at a future date. According to the transmittal, “only Phase 1 regulatory text is effective in this version of Appendix PP. We have included Phase 2 and Phase 3 language, but have distinguished these provisions within Appendix PP and have listed their effective dates.”

Terri Harris, Susan Fradenburg, and Katye Jobe are members of Smith Moore Leatherwood LLP’s Health Care Practice Group.  For more information about the firm and its Health Care Practice Group, visit