April 21, 2014

HB 12-1294: Eliminating Duplication and Unnecessary Government Oversight of the Regulation of Health Facilities in Colorado

On February 7, 2012, Rep. Larry Liston and Sen. Lois Tochtrop introduced HB 12-1294 – Concerning Modifications to the System of Regulation of Health Facilities Currently Regulated by the Department of Public Health and Environment. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Under current law, the Department of Public Health and Environment (CDPHE) licenses and establishes, and enforces standards for the operation of, health facilities in the state, including rehabilitation centers, community mental health centers, acute treatment units, facilities for persons with developmental disabilities, nursing care facilities, hospice care, assisted living residences, and home care agencies. CDPHE conducts periodic, announced and unannounced inspections of licensed facilities to ensure compliance with the standards it develops. The state board of health is required to establish by rule a schedule of fees to be assessed against health facilities that is sufficient to meet CDPHE’s direct and indirect costs in regulating health facilities.

Additionally, under current law, both CDPHE and the Department of Human services (DHS) jointly regulate community residential homes for persons with developmental disabilities.

The bill declares that the legislative intent of the bill is to eliminate duplication and unnecessary government oversight in the regulation of health facilities in Colorado.

The bill eliminates Colorado Department Public Health & Environment’s authority to license and develop standards for the operation of community residential homes, shifting oversight of these homes solely to DHS. Additionally, if home care agency personal care services, which are otherwise regulated by CDPHE, are provided by a service agency that delivers services and supports to persons with developmental disabilities, DHS is tasked with inspecting those services in conjunction and simultaneously with its inspection of the community residential home. DHS is directed to institute an abbreviated, periodic inspection system for community residential homes and a performance incentive system to reduce license renewal fees for community residential homes for which no significant deficiencies that negatively affect the life, health, and safety of their consumers have been found by DHS. The bill:

  • Requires CDPHE to develop an abbreviated, periodic inspection system, which it must use for health facilities that have been licensed for at least 3 years and have not been subject to any enforcement activity or substantiated complaints resulting in the discovery of significant deficiencies that negatively affect the life, health, or safety of consumers of the facilities within the prior 3 years;
  • Restrict the ability of CDPHE, when considering a license application or a request to approve new construction or remodel of a health facility, to impose standards for construction that are more stringent than, or do not comply with, applicable national, state, and local building and fire codes;
  • With regard to the dual responsibilities of CDPHE and DHS over community mental health centers and acute treatment units, require the departments to consider changes in health care policy and practice that incorporate integrated health care services;
  • Limit CDPHE’s licensure authority over community clinics to those community clinics that: Provide health care services on an ambulatory basis; are not licensed as an on-campus department or service of a hospital or listed as an off-campus location under a hospital’s license; and either operate inpatient beds or provide emergency services at the facility. CDPHE retains authority to license prison clinics regulated by the department of corrections.
  • Require CDPHE to determine an applicant’s fitness to conduct and maintain a health facility based solely on specific fitness information or documentation submitted by the applicant or obtained by CDPHE through its own review or investigation of the applicant; and
  • Eliminate the ability of CDPHE to conduct a fitness review of a new owner of a facility unless the transfer of ownership results in a transfer of at least 50% of direct or indirect ownership interest in the facility or business to one or more new owners.

Under the bill a licensed health facility, program of all-inclusive care for the elderly (PACE) provider, or community residential home that applies to renew its license may submit evidence of its accreditation by a nationally recognized accrediting body or regulation pursuant to a 3-way agreement between the PACE provider, the centers for Medicare and Medicaid services (CMS), and the department of health care policy and financing (HCPF), as applicable, in which case CDPHE or, for purposes of community residential homes, DHS is to deem that accreditation, regulation, or certification as satisfaction of the state licensing requirements. CDPHE or DHS, as applicable, is permitted to request additional information from a facility if the state’s standards for licensure of that type of facility are more stringent than the applicable standards for accreditation, regulation, or certification.

The bill prohibits the board from increasing provisional or full license fees above the levels set in rules as of the effective date of the sections. The board retains the ability to lower the fee amounts. The bill further requires CDPHE to develop a performance incentive system to provide a reduction in license renewal fees for health facilities that have no significant deficiencies that negatively affect the life, health, or safety of consumers of the facility.

The bill establishes the health care industry facility advisory council (advisory council) in CDPHE to advise the department and the board on matters related to state licensure of health care facilities. The purpose of the advisory council is to:

  • Advise CDPHE and the board on proposed standards for the operation of licensed health care facilities;
  • Review and make recommendations to CDPHE and the board on proposed new or amended rules regarding health care facility licensure;
  • Review and make recommendations to CDPHE and the board regarding modifications to licensing fees;
  • Review and make recommendations concerning CDPHE guidelines, policies, and procedures for licensure; and
  • Seek advice and counsel from outside experts when it deems necessary.

CDPHE and the board are required to accept and take the advisory council’s recommendations into consideration before taking action on any of the matters on which the advisory council submits recommendations.

Under the bill, the advisory council is subject to sunset review by the Department of Regulatory Agencies and repeal on September 1, 2022, unless continued by the general assembly.

The bill clarifies that home care placement agencies are not licensed or certified by CDPHE and prohibits home care placement agencies from making such a claim. Noncompliance with this prohibition subjects a home care placement agency to a civil penalty imposed by CDPHE.

For purposes of board rules pertaining to the regulation of home care agencies, the bill requires the board to establish different requirements that are appropriate based on the type of facility or provider delivering the services to the home care consumer and prohibits the board from requiring PACE providers to submit information that is redundant or inconsistent with the federal requirements the PACE provider is subject to pursuant to its 3-way agreement with CMS and HCPF.

The bill prohibits an appropriation of state funds to implement the bill.

On March 22 the Health and Environment Committee amended the bill and moved it to the full House for consideration on 2nd Reading.

Summaries of other featured bills can be found here.