Oregon Department of Human Services, Aging and People with Disabilities and Developmental Disabilities
Quality and Efficiency Incentive Program
ESTABLISHMENT. Effective October 7, 2013 through June 30, 2016, the Department establishes the Quality and Efficiency Incentive Program (Program) in order to implement Enrolled House Bill 2216 (Chapter 608, 2013 Oregon Laws) and Enrolled Senate Bill 1585 (2016). The Program is designed to reimburse quality nursing facilities that voluntarily reduce bed capacity that increases occupancy levels and enhances efficiency with the goal of slowing the growth of system-wide costs. The Department may provide additional compensation to nursing facilities who qualify for the legislatively approved Program. Such compensation may not exceed $9.75 per resident day and may not exceed four years from the date of eligibility. Eligibility to participate in this Program sunsets on June 30, 2016.
CAPACITY REDUCTION DISCUSSIONS. If two or more providers wish to initiate discussions concerning reduction of bed capacity in a community, the providers must notify the Department. The notice must identify the community and state that the parties wish to discuss reduction of bed capacity in that market pursuant to the Program.
Upon receipt of a notice to discuss reduction of bed capacity, the Department shall review the notice and either approve or disapprove the proposed preliminary discussion. The Department shall approve the preliminary discussion if the community is one in which the proposed capacity reduction is consistent with the goals of the Program.
If the Department approves the preliminary discussion, the Department shall notify the providers who requested approval and shall schedule a meeting at which a Department representative shall be made available to supervise the discussion. Providers in the affected market may attend the meeting and may discuss capacity reduction for that market under the supervision of the Department.
The Department shall determine the time, place, and mechanism to discuss the reduction of bed capacity. The discussions may be held in-person or by means of conference call, video conference, or such other means that allow for each participant to hear and be heard by the other participant at the same time.
Notice to the Department is not required for two providers who wish to discuss a specific transfer of bed capacity.
CAPACITY REDUCTION TRANSACTIONS. Prior to any purchase of bed capacity under the Program, the parties to the transaction must notify the Department.
The notice must describe the parties, the specific facilities, the proposed transaction, and the acquisition plan for the transaction.
The acquisition plan must include documentation demonstrating that:
Bed capacity in the community shall be reduced as a result of the transaction; and
The transaction does not compromise care or health status of residents.
The Department may approve the acquisition plan, disapprove the acquisition plan, or request further information or changes in the acquisition plan. The Department shall approve the transaction upon finding that the acquisition plan is expected to satisfy conditions (A) through (D) in subsection (b) of this section. If the Department approves or disapproves the transaction, the Department shall issue an order approving or disapproving the transaction and explaining how conditions (A) through (D) in subsection (b) of this section are satisfied or not satisfied.
The purchasing operator may receive incentives under the Program only if the Department approves the transaction and the purchasing and selling operators complete the transaction as described in the acquisition plan. Upon meeting the qualifying conditions, eligibility for the incentives will be effective on the date the operator submitted the acquisition plan to the Department. The purchasing operator and selling operator are entitled to state action antitrust immunity for the transaction only if the Department approves the transaction.
The Department, in consultation with the Long Term Care Ombudsman, shall convene a regional planning meeting in communities in which a facility plans to surrender the facility’s license under these rules. The meeting shall engage the community in:
Planning to promote the safety and dignity of residents who shall be impacted by the surrender;
A discussion regarding the local need for more home and community-based settings; and
Assessing opportunities for more residential programs and supporting residential capacity.
The Community Transition Meeting is initiated by the Department upon approval of an acquisition as described in this rule.
ELIGIBILITY. The eligibility requirements for participation in the Program are:
The nursing facility bed capacity being sold (the “selling facility”) is not an Essential Nursing Facility or from a facility operated on behalf of the Oregon Department of Veteran’s Affairs; and
The selling facility’s entire bed capacity is purchased and the seller agrees to surrender the nursing facility’s license on the earlier of the date that:
The last resident is transferred from the facility; or
180 days after the effective date of the sale of the facility bed capacity.
A Program applicant (the “purchasing operator”) must meet all of the following criteria at the time of the acquisition plan submission:
Operate one or more facilities licensed by the Department as a nursing facility;
Must be determined to be in substantial compliance from the annual licensing and recertification survey at the date of the acquisition plan submission; and
The Department declares its intent to exempt from state antitrust laws and provide state action immunity from federal antitrust laws individuals and entities that engage in transactions, meetings, or surveys described in sections (2) and (3) of this rule that might otherwise be constrained by such laws.
The following activities are not immunized from antitrust liability:
Agreements among competing providers to reduce the number of beds they operate outside of a sale;
Provider meetings to discuss bed reduction strategies outside of the negotiation of a specific sale and where no Department representative is in attendance; or
Collateral agreements between competing providers that involve their pricing strategies, how to respond to requests for proposals, or other discussions outside the sale of facilities.