How OBRA admission rules affect nursing facilities – includes admission agreement checklist
Stephen H. Siegel
How OBRA admission rules affect nursing facilities
The Omnibus Reconciliation Act of 1987 (OBRA ’87) included the most sweeping reforms to Medicare and Medicaid nursing facility benefits since the programs began.
OBRA and its implementing regulations radically redefine the relationship between a nursing facility that participates in one or both of these programs and its residents. Part of the redefinition involves imposing ongoing disclosure obligations on nursing facilities to apprise residents of their rights.
As in any business, a nursing facility periodically should review its forms and standard contracts. Most facilities have adopted some type of contract for new residents to sign at the time of admission. This document usually is referred to as an admission agreement.
In light of the OBRA disclosure requirements, which become effective on Oct. 1, nursing facilities should review many of their policies and procedures, including admission agreements.
Generally speaking, an Admission agreement represents the contract between a resident and the nursing facility. As such, it sets forth the parties’ rights and obligations and establishes each party’s expectations. An admission agreement defines how a nursing facility-resident relationship begins, how it ends, and what remedies each party has for a breach of this contract.
The agreement provides a way to inform residents of the nursing facility’s rules, regulations, and philosophy of care. For at least two reasons, a nursing facility’s admission agreement helps educate residents about these matters.
First, every resident signs and should be provided with a copy of the agreement. Second, in signing the admission agreement, every resident acknowledges having received notice of the matters it contains. Because the admission agreement offers an effective means of reaching residents at the inception of the nursing facility-resident relationship, facilities should consider taking advantage of this vehicle to comply with many of the OBRA notification and disclosure requirements.
Medicare and Medicaid do not specifically state that a nursing facility must have an admission agreement. Instead, OBRA imposes a significant disclosure requirement on each nursing facility that participates in Medicare or Medicaid:
“The facility must inform the resident both orally and in writing in a language that the resident understands, of his or her rights and all rules and regulations governing resident conduct and responsibilities during the stay in the facility. Such notification must be made prior to or upon admission and during the resident’s stay. Receipt of such information, and any amendment to it, must be acknowledged in writing.” (a)
Broken into components, the regulation makes six requirements on a nursing facility:
* The facility must make a written and oral disclosure to the resident;
* The disclosure must be in a language that the resident understands;
* The notice must address all of the rules and regulations governing the resident’s conduct and responsibilities while at the nursing facility;
* The notification must be made no later than the admission date to the nursing facility;
* The resident must be notified of any changes in rules and regulations that occur after he or she is admitted to the nursing facility; and
* The nursing facility must obtain a written acknowledgement that the resident has received this notice.
Although not explicitly stated, it appears that the Health Care Financing Administration (HCFA) believes this disclosure requirement applies to every resident in a nursing facility that participates in Medicare and Medicaid, no matter who pays for the resident’s care. For this reason, a nursing facility may have to demonstrate that it meets the requirements of OBRA regulation 483.10(b)(1) for private paying patients, as well as those who qualify for Medicare and Medicaid benefits.
In the preamble to regulation 483.10(b)(1), HCFA set out its interpretation on the rule. The agency stated that for foreign languages “commonly encountered in the facility’s locale,” the nursing facility must give the resident a written translation of the facility’s statement of rights. The nursing facility also should make the services of an interpreter available. (b)
This disclosure requirement and HCFA’s explanation in the preamble raise several questions for a nursing facility that must implement the requirement, including:
* How does the nursing facility determine its locale? Unlike hospitals, many facilities do not draw residents primarily from the immediate geographic area;
* What is the facility’s obligation to ensure that the translation, particularly an oral translation, is accurate and complete? A nursing facility may face the prospect of being sanctioned or sued over an allegedly inaccurate or incomplete translation of its admission agreement;
* Is the facility obligated to evaluate the resident’s understanding of this information? For example, if a residential apparently cannot understand the information because he or she is illiterate or incoherent, the nursing facility may need to take further steps to comply with OBRA; and
How will the facility be paid for the cost of meeting this requirement? For example, will the ceiling contained in the Tax Equity and Fiscal Responsibility Act of 1982 be adjusted to cover the cost of meeting the OBRA requirements?
HCFA expects obligations imposed by regulation 483.10(b)(1) and other OBRA provisions to be implemented by Oct. 1. In procedures HCFA has provided to its surveyors, the agency clearly indicates its determination to ensure that every nursing facility implements and complies with the letter and the spirit of OBRA’s resident rights and disclosure requirements.
The “Survey Procedures” instruct surveyors to ask residents if they know the facility’s rules and how they learned about them, as well as any changes. If residents are unclear about the rules, surveyors are instructed to interview nursing facility staff members to determine if and how residents are informed.
One way for a nursing facility to document that it has disclosed its rules to residents is to include them as part of the admission agreement or to have the beneficiary acknowledge in writing in the admission agreement that he or she has received a copy of the facility’s rules.
More generally, HCFA has instructed surveyors to interview residents to determine whether the nursing facility has compiled with the OBRA disclosure requirements. Probably the best way for a facility to demonstrate that it has complied with these disclosure requirements is to include them in a document that is signed by the resident, such as the admission agreement.
During HCFA interviews, surveyors will determine how the facility protects and promotes residents’ rights. They also will attempt to learn how the nursing facility maintains and enhances the quality of life of each resident. Surveyors will interview residents to determine their satisfaction with their abilities to exercise their rights.
HCFA also has instructed surveyors to use group interviews that focus on residents’ abilities to influence facility policies and procedures — and the facility’s response to residents’ requests for changes. However, the legislation does not seem to require a facility to implement — or even respond to — these requests for changes.
OTHER NEEDS. OBRA requires a nursing facility to inform each resident entitled to Medicaid benefits (at the time of admission or when the resident becomes entitled to those benefits) of items and services covered by the state’s plan, items and services for which the resident may be charged, and of any changes in charges or items.
The facility must provide a similar disclosure of its charges to patients who are entitled to Medicare benefits or who have other payment resources. (b) As previously noted, this disclosure requirements is ongoing. Moreover, it appears to be required. regardless of the resident’s current or future financial status.
Nursing facilities must furnish residents with a written description of their legal rights, including the manner of protecting and managing their personal funds and the right of the resident to file a complaint with the state survey and certification agency. (e) HCFA’s survey procedures instruct surveyors to ask residents if they know how to contact the state survey agency or ombudsman.
If the survey team finds that residents do not know how to contact these agencies, they will interview nursing facility administrative staff to determine how it notifies residents of their legal rights.
Each nursing facility must decide for itself when and how much information to provide residents. Including information about the residents’ protections, right to manage their own funds, and their right to file a complaint in the admission agreement would make it relatively easy for a facility to demonstrate that it has complied with the requirements. This decision, however, involves a philosophical question concerning the facility’s approach to resident relations, as well as a legal question.
As in any contract, an admission agreement should include termination provisions. OBRA limits a nursing facility’s ability to terminate this agreement. The regulations identify only five circumstances in which a facility can terminate the agreement and transfer or discharge a resident.
* It is necessary for the resident’s welfare, and his or her needs cannot be met in the facility;
* The resident’s medical condition no longer requires him or her to remain in the facility;
* By remaining in the facility, the resident endangers the safety or health of others;
* The resident fails to pay and is not receiving Medicare or Medicaid nursing facility benefits;
* The nursing facility ceases to operate. (f)
A nursing facility’s admission agreement also can be used to meet several other OBRA disclosure requirements. For example, the agreement can include an explanation of how the facility will notify the resident, the resident’s legal representative, or interested family member of changes in the resident’s condition. An admission agreement also could provide the state Medicaid program and facility bed holding policies. (g)
In several places, HCFA regulations implementing OBRA refer to the resident’s legal representative or an interested family member as a third party who could be notified or involved in making decisions concerning the resident. The resident’s legal representative or interested family member also could be the party who guarantees payment from the resident’s resources.
Unfortunately, the regulations do not provide any criteria for identifying this party. A nursing facility must develop its own criteria for making this determination.
A facility’s criteria for determining a resident’s legal representative or interested family member could include recognizing a third party who holds the resident’s power of attorney or a third party who is designated in the resident’s living will as his or her surrogate decision maker.
Alternately, a nursing facility could require the resident to specify a legal representative or an interested family member in the admission agreement. Although this approach may be preferable, it could be difficult to implement, particularly in the case of a resident who, while legally competent, as a practical matter is not capable of making this designation.
Without further guidance from HCFA on this issue, a nursing facility must wrestle with some difficult questions, including:
* What should a facility do when a third party asserts that he or she is the legal representative of a resident (who failed to make a designation as part of his or her admission agreement) and provides the nursing facility with documentation that is not legally recognized in that jurisdiction or only becomes operative after some other event that has not occurred?
For example, the resident may have executed a living will that identifies a surrogate decision maker if the resident is unable to make decisions as attested to by a physician, who is designated by this resident but who is unwilling or unavailable to make that attestation. The nursing facility also may be located in a jurisdiction that does not recognize living wills;
* How is a facility to resolve a disagreement concerning the resident’s care between the resident’s legal representative and an interested family member?
The OBRA regulations do not indicate which party’s wishes take priority. The nursing facility may find itself caught in the middle of a legal battle between these parties;
* If the resident does not have a legal representative, how should the nursing facility resolve conflicts between two or more interested family members?
HCFA has not provided guidance concerning who qualifies as an interested family member. A nursing facility should not assume that a resident could have only one interested family member. In a dispute between a legal representative and a family member, OBRA does not offer guidance concerning which interested family member’s wishes should take priority.
A facility could follow the wishes of the interested family member who is identified in the resident’s admission agreement, if one is identified. Another way to resolve the matter may be to assign priorities among family members that are consistent with the state law of intestate distribution.
An obvious weakness with this approach involves how the facility would resolve disputes between interested family members who share equal status.
The question of whose direction a nursing facility should accept when a resident cannot or will not decide for him or herself predates OBRA. The designation of a legal representative or interested family member may provide a way to resolve this issue. Further guidance from HCFA may help reach workable solutions to these complicated and emotional arguments.
(a) 42 Code of Federal Regulations (CFR) 483.10(b)(1).
(b) 54 Federal Register, pp. 5316, 5320.
(c) 42 CFR 483.10(b)(5).
(d) 42 CFR 483.10(b)(6).
(e) 42 CFR 483.10(b)(7).
(f) 42 CFR 483.12(a).
(g) 42 CFR 483.10(b)(10); 42 CFR 483.12(b).
Stephen H. Siegel, an attorney, represents parties involved in healthcare matters. He is a member of HFMA’s New Jersey Chapter.
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