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Complying with the New Participation Requirements for Medicare/Medicaid Certified Skilled Nursing Facilities

Complying with the New Participation Requirements for Medicare/Medicaid Certified Skilled Nursing Facilities

What you need to know for Phase 1

Health Care Law Note
(October 14, 2016)

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 over a three-year time period beginning November 28, 2016, and marks the first comprehensive update to the requirements for SNFs in twenty-five years. The rule contains completely new sections in addition to amendments to existing regulations.

In this Law Note, the first in a multi-part series, we begin to address some of the final rule's significant additions that will take effect in Phase 1. SNFs are likely aware that the rule includes a new pre-dispute ban on arbitration agreements between SNFs and their residents (or their representatives). This ban was challenged by the American Health Care Association and others in a lawsuit filed on October 17, 2016. However, numerous other significant additions and changes contained in the rule will require time and effort by SNFs to respond appropriately by the Phase 1 deadline of November 28, 2016 (as if you did not already have enough on your plates).

This Law Note focuses on two provisions of the new rule related 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 need to be implemented as part of Phase 1 by November 28, 2016

1. 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 in Phase 1 to minimize medication errors and potential adverse events relating to medications. All parts of the pharmacy services section take effect in Phase 1 except the medical chart review requirement and the psychotropic drugs provisions. To comply with the remaining requirements, SNFs should review and update policies and procedures as needed to confirm that they do the following:

  1. Include the SNF's medical director on the list of individuals who must be notified of irregularities identified by the pharmacist during the resident's monthly DRR;
  2. Define "irregularities" to include the provision of any "unnecessary drugs";
  3. Document irregularities on a separate written report that is sent to the attending physician, the Medical Director, and the DON;
  4. 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; 
  5. 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
  6. 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 takes effect in Phase 1 in preparation for Phase 2 regulations limiting the use of psychotropic drugs. The new definition 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.

2. 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, SNFs should revise existing Quality of Care policies and procedures that were previously based upon the language of 42 C.F.R. §483.25(f) 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 take effect in Phase 1 and will help you get ready for the Phase 2 requirements.   

The revisions and additions we have suggested above are highlights and are not meant to be an exhaustive listing. In our next installment in this multi-part series, we will highlight additional changes to the participation requirements for long-term care (“LTC”) facilities that take effect in Phase 1, including new training requirements for nurse aides as well as changes to quality assurance and performance improvement functions.

To review the final rule, click here.

Susan McNear Fradenburg
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Katye Jobe Griffin
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Terrill Johnson Harris
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