SENATE BILL NO. 322
AS AMENDED BY SENATE AMENDMENT NOS. 1 AND 2
AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE RELATING TO THE REGULATION OF NURSING FACILITIES AND SIMILAR FACILITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each House thereof concurring therein):
Section 1. Amend the Title of Chapter 11, Title 16, Delaware Code by deleting it in its entirety and inserting in lieu thereof the following:
"Chapter 11. Nursing Facilities and Similar Facilities."
Section 2. Amend Subchapter I, Chapter 11, Title 16, Delaware Code by deleting it in its entirety and inserting in lieu thereof the following:
"Subchapter I. Licensing by the State § 1101. Purpose and Overview,
(a) It is the intent of the General Assembly that the primary purpose of the licensing and regulation of nursing facilities and similar facilities is to ensure that these facilities provide a high quality of care and quality of life to their residents.
(b) This Chapter and the regulations adopted to implement it establish minimum acceptable levels of care. A violation of a minimum acceptable level of care is prohibited by law.
(c) The State shall undertake measures to prevent violations. Prevention shall be promoted through education, particularly regarding any new laws and regulations adopted by the State.
(d) The State shall undertake measures to assure that violations of this Chapter and the regulations promulgated thereunder are remedied. To that end, the Department shall, in conformity with this Chapter, set standards of care, determine compliance with those standards through inspections, investigations and other compliance measures, and impose sanctions and remedies for noncompliance.
(e) The Department shall be responsible for issuing licenses and certifying the compliance of facilities with state laws and regulations. Each facility licensed under this Chapter shall, at a minimum, provide quality care in accordance with this chapter and the regulations promulgated thereunder. Components of quality of care and quality of life addressed by this Chapter and regulations promulgated thereunder include: access to care; continuity of care; comprehensiveness of care, including activities; coordination of services; humaneness of treatment and respect for the dignity of each resident; safety of the environment; and qualifications of caregivers.
(f) This Chapter and the regulations promulgated hereunder apply to each licensed nursing facility and similar facility operating in the State of Delaware regardless of the nature of its funding sources. This chapter and its regulations are intended for use in state inspections of facilities licensed under this chapter and any investigations and enforcement actions, and are designed to be useful to consumers and providers in assessing the quality of care provided in a facility.
(g) The consumer protection goal of ensuring that residents of nursing facilities and similar
facilities receive quality care shall be strived for in the following ways:
(1) Monitoring the factors relating to the health, safety, welfare, and dignity of each resident;
(2) Providing effective remedies and requiring their prompt imposition for noncompliance with licensing standards; and
(0) Providing the public with information concerning the operation of nursing facilities and related facilities in this State.
(b) This Chapter shall be construed broadly to accomplish the purposes set forth in this section.
§ 1102. Definitions
As used in this subchapter, the following terms mean:
(1) 'Controlling Person' means:
(a) A person who has the ability, acting alone or in concert with others, to directly or indirectly influence, direct, or cause the direction of the management, expenditure of money, or policies of a facility or other person.
(b) For purposes of this Chapter, 'controlling person' includes:
(1) A management company, landlord, or other business entity that operates or contracts with others for the operation of a facility;
(2) Any person who is the controlling person of a management company or other business entity that operates a facility or who contracts with another person for the operation of a facility;
(0) Any other individual who, because of a personal, familial, or other relationship with the owner, manager, landlord, tenant, or provider of a facility, is in a position of actual control or authority with respect to the facility, without regard to whether the individual is formally an owner, manager, director, officer, provider, consultant, contractor, or employee of the facility.
(c) A controlling person described by subsection (b)(3) does not include a person, such as an employee, lender, secured creditor, or landlord, who does not exercise any influence or control, whether formal or actual, over the operation of a facility.
(d) The Department may adopt regulations to define the ownership interest and other relationships that qualify a person as a controlling person.
(2) 'Department' shall mean the Department of Health and Social Services;
(3) 'Division' shall mean the Division of Long-Term Care Consumer Protection;
(4) 'Nursing Facility and Similar Facility' shall mean a residential facility that provides shelter and food to more than one person who: (i) because of their physical and/or mental condition require a level of care and services suitable to their needs to contribute to their health, comfort, and welfare; and (ii) who are not related within the second degree of consanguinity to the controlling person or persons of the facility. The facilities to be licensed pursuant to Chapter 11 include but are not limited to the following: nursing facilities (commonly referred to as nursing homes); assisted living facilities; intermediate care facilities for persons with mental retardation; neighborhood group homes; family care homes; and rest residential facilities.
(5) `Long-Term Care Residents' Trust Fund' shall mean a fund maintained by the Department to which civil monetary penalties are to be remitted. Consistent with the federal Health Care Financing Administration ("HCFA") regulations, 42 CFR §488.442(f), regarding civil money penalties collected by the State, such money shall `be applied to the protection of the health or property of residents of facilities that the State or HCFA finds noncompliant.' Money deposited into this Trust Fund shall not be used for salaries or general operating costs of the Department but rather for the benefit and protection of long-term care residents. If the amount in the Trust Fund reaches $500,000, any funds in excess of that amount shall revert to the General Fund. The Department shall submit a detailed spending report on the uses of the Trust Fund to the State Budget Director and Controller General no later than 30 days after the end of the fiscal year.
(6) `Person' means an individual, firm, partnership, corporation, association, joint stock company, limited partnership, limited liability company, or any other legal entity and includes a legal successor of those entities.
§ 1103. License and Renewal Requirement.
No person shall establish, conduct, or maintain any nursing facility or related facility in this State without first obtaining a license from the Department and thereafter renewing this license on an annual basis. Failure to comply with this subsection shall result in the imposition by the Department of a civil penalty not to exceed $10,000 per violation.
§ 1104. License and Renewal Application.
(a) An application for a license or renewal of a license shall be submitted to the Division on forms provided by the Division and must be accompanied by the applicable license fee.
(b) In addition to the general Information requested on the application forms, the applicant or license holder must furnish evidence to affirmatively, establish the applicant's or license holder's ability to comply with:
(1) Minimum standards of medical care, and/or nursing care, as applicable by type of facility;
(2) Financial capability; and
(3) Any other applicable state and federal laws and regulations for that category of facility.
(c) The Department shall consider the background and qualifications of the applicant or license holder and it may also consider the background and qualifications of the following:
(1) Any partner, officer, director, or managing employee of the applicant or license holder;
(2) Any person who owns or controls the physical plant in which the facility operates or is to operate; and
(3) Any controlling person with respect to the facility for which a license or license renewal is requested.
(d) In making the evaluation described in subsection (c), the Department shall require the applicant or license holder to file a sworn affidavit of a satisfactory compliance history and any other information required by the Department to substantiate a satisfactory compliance history relating to each state or other jurisdiction in which the applicant operated a facility any time during the five-year period preceding the date on which the application is made. The Department by regulation shall define what constitutes a satisfactory compliance history. The Department may also require the applicant to file information relating to its financial condition during the five-year period preceding the date on which the application is made. The Department may also request any of the above-described information about any other person described by subsection (c) of this section.
(e) Financial Disclosure Requirement. As part of the license and annual renewal application, or when the Department determines that conditions exist which threaten the health or safety of a resident or residents, each facility licensed under this Chapter shall disclose the following financial information notwithstanding Chapter 100 of Title 29, the Department may promulgate regulations identifying which, if any, part of such financial information shall be available to the public:
(1) Audited annual financial statements;
(2) Annual financial reports;
(3) Other financial reports regularly filed with State or Federal agencies;
(4) Any other information relative to the financial health of the facility.
(f) The license shall terminate if and when there is a transfer of a nursing facility or similar facility to another person or controlling person or the business ceases legal existence or discontinues operation. No license granted by the Department shall be assigned or otherwise transferred to another person or controlling person except upon such conditions as the Department may specifically designate and then only pursuant to written consent from the Department. Application for transfer of a license shall be submitted at least 90 days before the proposed transfer and shall contain the same information and be subject to the same criteria for approval as contained in this section.
§ 1105. Denial of License or Its Renewal.
(a) The Department may deny a license to any applicant or refuse to renew a license to any license holder if the Department finds that the applicant or license holder or any partner, officer, director, managerial employee, or controlling person of the applicant or license holder:
(1) Fails to meet the requirements of § 1104; or
(2) Operated any nursing facility or related facility without a license or under a revoked or suspended license in any jurisdiction; or
(3) Knowingly, or with reason to know, made a false statement of a material fact in an application for license or renewal, or any data attached thereto, or in connection with any matter under investigation by the Department, or in any document submitted to the Department, including, but not limited to, a plan for the correction of violation(s) of applicable laws or regulations; or
(4) Refused to allow representatives or agents of the Department to inspect a portion of the premises of the facility or any patient related documents, records, and files required to be maintained by the facility; or
(5) Interfered with or attempted to impede in any way the work of any authorized representative of the State or the lawful enforcement of any provision of this Chapter; or
(6) Has a history of noncompliance with federal or state law or regulations in providing long-term care. In deciding whether to deny a license under this section, the factors to be considered by the Department shall include the severity and recurrence of the noncompliance.
(b) The due process protections of notice and an opportunity to be heard shall be provided to facilities prior to the denial of a license or its nonrenewal. The hearing process shall be consistent with the Administrative Procedures Act, 29 Del C §10101 et. seq.
§ 1106. License or Renewal Fees.
(a) The fees for issuance and renewal of licenses pursuant to this Chapter shall not exceed $150 plus:
(1) $250 for facilities with less than 100 units of capacity or bed space for which a license is sought, and $400 for facilities with more than 100 units of capacity or bed space for which a license is sought; and
(2) A background examination fee for initial applications in an amount set by the Department necessary to defray its expenses in administering its duties under §1104(c) and (d), but not to exceed $500.
(3) Notwithstanding paragraphs (1) and (2) above, the total fee shall be $50 for facilities with ten or less units of capacity or bed space for which a license is sought.
(b) The license fee must be paid with each application for an initial license, a renewal license, or a change of ownership license.
(c) An approved increase in bed space is subject to an additional fee.
(d) The State is not required to pay the license fee for any facilities it operates or owns which require licensure under this chapter.
(e) All license fees collected by the Department shall be remitted to the General Fund. § 1107. Inspections and Monitoring.
(a) The Department shall inspect each nursing facility and similar facility on an annual basis to ensure compliance with this Chapter and the regulations adopted pursuant to it.
(b) The Department shall have the authority to assess. additional fees to recover the actual costs and expenses of the Department for any monitering or inspections needed beyond the standard inspection in those cases in which substantiated violations are found.
Any duly authorized employee or agent of the Department may enter and inspect any facility licensed under this Chapter without notice at any time. Such inspections may include, but are not limited to, the following: interviewing residents, family members, and/or staff; reviewing and photocopying any records and documents maintained by the licensee; inspecting any portion of the physical plant of the facility; and otherwise enforcing any provision of this Chapter and the regulations pursuant to it, as well as applicable federal law and regulations. All licensees are required to provide immediate access to Department personnel to conduct inspections.
(d) No advance notice.
No advance notice shall be given to any facility of any inspection conducted pursuant to this Chapter unless specifically authorized by the Secretary of the Department or his or her designee or as otherwise required by federal law or regulation. Failure to comply with this subsection shall result in the imposition by the Department of a civil penalty not to exceed $5,000 per violation.
(e) Exit Conference.
At the conclusion of each annual and complaint-driven or "surprise" inspection, the Department shall promptly notify the facility of any violations of this Chapter and its regulations as well as of federal law and regulations. It shall provide a comprehensive exit interview at the conclusion of each inspection whereby the facility is made aware of any problems found, including violations of applicable law or regulations. Representatives from the Long-Term Care Ombudsperson's Office shall be invited to attend each exit interview.
§ 1108. Posting of Inspection Summary and Other Information and Public Meetings.
(a) Each facility shall prominently and conspicuously post for display in a public area of the facility that is readily available to residents, employees and visitors the following:
(1) The license issued under this subchapter.
(2) A sign prescribed by the Department that specifies complaint procedures and provides the "1-800" hotline number to receive complaints 24 hours a day, seven days a week.
(3) A concise summary prepared by the Department of the most recent inspection report for the facility.
(4) A notice in the form prescribed by the Department stating that informational materials relating to the compliance history of the facility are available for inspection at a location in the facility specified by the sign. The notice shall also provide the telephone number to reach the Division to obtain the same information concerning the facility.
(5) A notice that the Board of Examiners of Nursing Home Administrators can provide information about the nursing facility administrator along with the Board of Examiners' telephone number to call for this information.
(b) The notice relating to the compliance history of the facility must also be posted the facility as determined by regulations.
(c) The compliance history information required to be maintained for public inspection by a facility under subsection (a)(6) must be maintained in a well-lighted accessible location. The compliance history material must include all inspection reports produced for that facility during the preceding three-year period. The information must be updated as each new inspection or other Department report is received by the facility.
(d) Following completion of the annual inspection report (including any administrative or other appeals therefrom) and any plan of action or other response developed by the nursing facility or similar facility in response to the annual inspection report, the Department shall schedule a meeting as defined by regulations to take place at the facility to present the findings of the annual report and the nursing facility or other facility's response. The Department shall notify nursing home residents and their families of the meetings required pursuant to this subsection. The Department shall also provide staff for these meetings and the staff shall be prepared to present the findings of the surveys and to answer questions regarding the annual inspection surveys and plans of action. This annual meeting requirement shall apply to all nursing facilities during the first year after enactment of this law, and shalt be phased in for all other facilities licensed under Chapter 11, Title 16 of the Delaware Code within three years after the enactment of this law.
§1109. Civil Penalties.
(a) The Department may impose civil money penalties for the violation of provisions of this Chapter or the regulations adopted pursuant to it. For violations of this Chapter or any of it regulations which the Department determines pose a serious threat to the health and safety of a resident or residents, a licensee or other person is liable for a civil penalty of not less than $1,000 nor more than $10,000 per violation.
(b) In determining the amount of the penalty to be assessed under §1109(a), the Department shall consider:
(1) The seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation and the hazard or potential hazard created by the violation to the health or safety of a resident or residents;
(2) The history of violations committed by the person or the person's affiliate(s), employee(s), or controlling person(s);
(3) The efforts made by the facility to correct the violation(s);
(4) The culpability of the person or persons who committed the violation(s);
(5) A misrepresentation made to the Department or to another person regarding:
(a) The quality of services provided by the facility;
(b) The compliance history of the facility; or
(c) The identity of an owner or controlling person of the facility.
(6) Any other matter that affects the health, safety or welfare of a resident or residents.
(c) For all other violations that do not constitute a serious threat to the health and safety of a resident, but do violate this chapter or the regulations adopted pursuant to it, the maximum civil penalty shall be $10,000 per violation. Violations in this category include, but are not limited to, the following:
(1) Making a false statement that the person knows or should know is false, about a material fact: (a) on an application for issuance or renewal of a license or any document attached thereto; or (b) with respect to a matter under investigation by the Department;
(2) Refusing to allow a representative of the Department to inspect without notice at any time: (a) any portion 9f the premises of a facility; or (b) any documents, records, or files required to be maintained by a facility;
(3) Willfully interfering with the work of a representative of the Department or with the enforcement of this Chapter; or
(4) Willfully interfering with the preservation of evidence of a violation of this Chapter or regulation pursuant to it.
(d) In determining the amount of the penalty to be assessed under §1109(c), the Department shall consider the same six factors outlined in § 1109(b)(1)-(6).
(e) Each day of a continuing violation constitutes a separate violation. However, no penalty for a health and safety violation may exceed $2,500 per day beyond the initial day. No penalty for a non-health and safety violation shall exceed $1,250 per day beyond the initial day.
§ 1110. Waiver of Penalty If First Time Violation(s) Corrected.
(a) The Department may waive a civil penalty for a first-time violation that does not constitute a threat to the health or safety of a resident or substantially limit the facility's capacity to provide care. The Department shall assess the amount of the penalty but notify the facility that the penalty will be waived if the violation is corrected within 30 days or a shorter time period if the facts so warrant.
(b) Penalties for Failure to Maintain Correction.
The facility that corrects a violation under subsection (a) must maintain that correction. If the facility fails to maintain a correction, the Department shall, in accordance with 0109(6)(2), consider the facility's history of violations in determining the amount of the penalty to be assessed. If the facility fails to maintain a correction until at least the first anniversary of the date the correction was made, the Department may assess a penalty equal to three times the amount of the original penalty assessed but not collected under subsection (a) of this section.
§ 1111. Overlap of State Licensing and Federal Certification Penalties.If the Department determines that a facility has violated this Chapter or regulation thereunder, and has thereby also violated a federal certification standard under Social Security Act or regulations adopted under it, the Department may not assess more than one civil money penalty for a violation arising out of the same act or failure to act. The Department must choose whether to proceed under the penalty structure for the state licensing violation or recommend to the federal authorities that a penalty be imposed for the federal certification deficiency.
§ 1112. Collection of Civil Penalties.
(a) All civil penalties collected under this Chapter shall be remitted to the Long-Term Care Residents' Trust Fund.
(b) Payment of any civil penalty by a facility is not an allowable cost for reimbursement under the state Medicaid program or under other state funded programs.
(c) If a nursing facility or similar facility, after notice and opportunity for hearing, does not pay a properly assessed penalty in accordance with this subchapter, the Department shall deduct the amount of the civil penalty from amounts otherwise due from the State to the nursing facility and remit that amount to the Long-Term Care Residents' Trust Fund.
(d) Alternatively, the Department may add the amount of the civil penalty to the licensing fee for the nursing facility or similar facility. If the licensee refuses to make the payment at the time of the application for renewal of its license, its license shall not be renewed.
(e) In the event of financial hardship, to be determined by the Department, it may redirect the payment of penalties by the facility to take remedial action to correct the violation(s).
§ 1113. Other Remedies for Noncompliance.
In addition to civil money penalties, the Department may impose any or all of the following remedies for noncompliance with this Chapter and the regulations promulgated pursuant to it:
(a) Monitoring (according to the terms and conditions, including timeframes, determined necessary by the Department);
(b) Suspension of the admission or readmission of residents to the nursing facility (according to the terms and conditions including timeframes, determined by the Department);
(c) Selective transfer of residents whose care needs are not being met by the licensee;
(d) Suspension, revocation, or refusal to renew a license;
(e) In cases where the physical health or safety of residents is in imminent risk, issuance of an emergency order temporarily transferring the management of the facility to another qualified entity (according to the terms and conditions, including timeframes, deemed necessary by the Department).
§ 1114. Right to Hearing on Penalties and on Other Remedies for Noncompliance.
The due process protections of notice and an opportunity to be heard shall be provided to facilities to appeal civil money penalties as well as to appeal the other remedies for noncompliance contained in §I113. The hearing process shall be consistent with the Administrative Procedures Act, 29 Del.C. §10101 et seq.
§ 1115. Injunctive Relief.
(a) In addition to any other remedy provided by law, the Department may bring an action in Chancery Court to enjoin a nursing facility or similar facility from engaging in activities that pose a threat to the health or safety of resident(s) of the nursing facility or similar facility. A temporary restraining order may be granted by the court if continued activity by the nursing facility or similar facility would create an imminent risk to a resident or residents at the facility.
§I116. Coordination of Enforcement Actions with the Attorney General's Office.
(a) The Department and the Attorney General shall work in close cooperation throughout any legal proceeding initiated by the Department to enforce this Chapter and the regulations promulgated pursuant to it.
(b) The Secretary of the Department or his or her designee must be fully consulted before concluding any settlement agreement to a lawsuit brought under this Chapter or any other law relating to the health and safety of residents in nursing facilities and similar facilities.
§ 1117. Retaliation or Discrimination Against Complainant.
(a) No licensee or other person shall discriminate or retaliate in any manner against a resident or employee in its facility on the basis that such resident or employee or any other person on behalf of the resident or employee has initiated or participated in any proceeding pursuant to this Chapter, including providing information in connection with an inspection. The Department shall impose a civil penalty of not more than $10,000 per violation upon any licensee or other person who violates this section.
(b) Any attempt to expel a resident of the nursing facility or any other type of retaliatory or discriminatory treatment of a resident or employee or any other person by whom, or upon whose behalf; a complaint has been submitted to the Department or who has participated in any proceeding instituted pursuant to this Chapter within one year of the filing of the complaint or the institution of such action, shall raise a rebuttable presumption that such action was taken by the licensee or other person in retaliation for the filing of the complaint or the cooperation with the proceeding.
§ 1118. Third-Party Reimbursement.
Consistent with federal law, 42 USC section 1919 (c)(5), with respect to admissions policy and practices, a nursing facility or similar facility must not require a third party guarantee or payment to the facility as a condition of admission (or expedited admission) to, or continued stay in the facility.
§ 1119. Priority Placement of Publicly Assisted Persons.
Annually, the Department shall notify all public agencies which refer residents to facilities licensed under the Chapter of those facilities found upon inspection within the previous 12-month period to be without violations or to have had violations deemed minor by the Department. Public agencies shall give priority to such facilities in referring publicly assisted persons.
§ 1120. 'Confidentiality of Residents' Records. To protect the privacy of residents of a nursing facility or similar facility, the Department shall establish guidelines to protect the confidentiality of any records, documents or files pertaining to such residents.
§ 1121. Pediatric Nursing Services.
A facility shall ensure that:
(1) Nursing services for a resident younger than 16 years of age are provided by staff who have received training regarding and have demonstrated competence in the care of children; and
(2) Consultative pediatric nursing services are available to the staff if the facility has a resident younger than 18 years of age.
§ 1122. Regulations,
The Department has the authority to adopt, amend, or repeal issue regulations to implement this Chapter. In addition to regulations by category of facility to be licensed, the Department shall also develop pediatric regulations regarding the care of children in nursing facilities and similar facilities."
Section 3. This Bill shall take effect 180 days after its enactment.
Approved July 23, 1998