December 21, 2011
CON PROCESS FOR CLOSING NURSING HOME
By: Robin K. Cohen, Principal Analyst
You asked us to summarize the certificate of need (CON) law as it relates to a facility closing. You asked this in light of the impending closure of the Richard L. Rosenthal Hospice Residence in Stamford, a 12-bed facility located on the Stamford Hospital campus. You also wanted to know why the facility is closing.
By law, when any long-term care facility intends to terminate a service or decrease substantially its total bed capacity, it must get permission from the Department of Social Services (DSS) to do so through the certificate of need (CON) process. The law applies to nursing homes, intermediate care facilities for people with mental retardation (ICF-MR), and residential care homes.
DSS provides forms and instructions to the applicant facility for the CON application. As part of its application, the facility must submit a “letter of intent,” explaining why it is seeking to close or decrease its capacity. It must also provide written notice to its patients and other responsible parties and the Office of the Long-Term Care Ombudsman (OLTCO). The notice must include certain information about the closure or decrease in bed capacity and options for patients who will be affected, including their right to appeal any proposed transfer from the facility.
The law establishes timeframes for DSS to respond to the request, and allows DSS to extend these if it needs additional information. It also permits the facilities to request a hearing if they are unhappy with DSS' decision on the application. And it requires a public hearing to be held before a facility can be closed or substantially reduce bed capacity, unless the decrease is associated with a decline in the number of residents (i.e., census reduction). Facilities failing to comply with this provision face a potential monetary penalty. New federal reporting requirements delay when the facility may actually close.
The circumstances surrounding the closure of the Richard L. Rosenthal hospice are somewhat unique. The hospice is not one of the long-term care facilities listed above. But, according to the Department of Public Health, the hospice chose to obtain a nursing home license instead of a hospice license when it opened in 2000 because it was the least burdensome route to begin operating. We have no official explanation as to why the hospice is closing. But DSS officials surmised that it is likely because of financial problems.
CON LAW—FACILITY CLOSURES
The CON law states that when a nursing home, ICF-MR, or residential care home intends to terminate a service or decrease substantially its total bed capacity, it must (1) submit to DSS a complete request for permission to implement the action and (2) notify OLTCO at the same time (CGS § 17b-352(b)). (Facilities in receivership that are to close by court order are exempt from this requirement.)
The facility must request in writing CON application forms and instructions from DSS. The request must include (1) the facilty's name and (2) a statement of intent to close or reduce capacity. This is deemed a “letter of intent.” No CON application is considered submitted until a “current” letter of intent (in DSS' possession for no more than 180 days) has been on file with DSS for at least 10 business days (CGS § 17b-352(c)).
A facility must also provide written notice, at the time it submits its letter of intent to DSS, to all patients, guardians, or conservators, if any, or legally liable relatives or other responsible parties, and post the notice in a conspicuous place in the facility. The notice must state the following:
1. the projected date the facility will be submitting its CON application;
2. that only DSS may grant, modify, or deny the application;
3. that DSS has up to 90 days to act on the application;
4. the reason or reasons for submitting the application;
5. that no resident can be involuntarily transferred or discharged from a facility because of the filing of the CON application;
6. that all residents have a right to appeal any proposed transfer or discharge; and
7. the name, mailing address, and telephone number of the OLTCO and local legal aid office (CGS § 17b-352(d)).
Deadline for Acting on Applications
DSS must review the application and grant, modify, or deny it within 90 days after receipt unless it grants an extension. It may extend its review (1) for up to 15 days at the request of an applicant it has asked to provide additional information and (2) for up to 30 days if the applicant has not filed in a timely manner information that DSS deems necessary (CGS § 17b-352(e)).
Hearing on CON Applications
With one exception, no nursing home, ICF/MR, or residential care facility may close or substantially reduce its bed capacity until the DSS commissioner holds a public hearing and approves the facility's request. DSS may impose a civil penalty of up to $5,000 on any facility that violates this provision. The requirement does not apply if the decrease in bed capacity is a result of a decline in the number of residents (CGS § 17b-353(d)). (This appears to have been the case with the Stamford Hospice, although a hearing was still held on the application.) The law also allows applicants to request a hearing if they are aggrieved by the commissioner's decision pertaining to their request (CGS § 17b-352(e)).
The commissioner or his designee must (1) hold the mandatory hearing on receiving the letter of intent or CON application, whichever is submitted earlier, but no later than 30 days after receiving the letter or application and (2) notify the facility of the hearing at least 14 days in advance. The notice to the facility must be by certified mail; the public notice must be published in a newspaper having a substantial circulation in the area the facility serves.
Timing of Closure
According to DSS officials, the 90-day clock for DSS to render its decision on a CON application to close a facility does not begin until it has a complete file. This means that when there is a public hearing, the file is not complete until DSS receives a full transcript of the hearing's proceedings.
Moreover, the 2010 federal health care reform law requires a nursing home (which this hospice technically is because it has a nursing home license) administrator to provide 60 days notice to the federal government. According to DSS, the administrator cannot submit this notice until DSS has rendered its CON decision (42 USC §§ 1302 and 1395hh; 42 CFR § 483.75).
For your additional information, we have attached the OLR summary of PA 11-236, which relates to long-term care facility resident transfers and discharges.