Title of Regulation: 22VAC30-80. Auxiliary Grants Program (amending 22VAC30-80-10, 22VAC30-80-20, 22VAC30-80-30, 22VAC30-80-40, 22VAC30-80-45, 22VAC30-80-60, 22VAC30-80-70).

Statutory Authority: §§ 51.5-131 and 51.5-160 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: May 6, 2017.

Agency Contact: Tishaun Harris-Ugworji, Program Consultant, Department for Aging and Rehabilitative Services, 8004 Franklin Farms Drive, Richmond, VA 23229, telephone (804) 662-7531, or email tishaun.harrisugworji@dars.virginia.gov.

Basis: Section 51.5-160 of the Code of Virginia authorizes the Commissioner of the Department for Aging and Rehabilitative Services to adopt regulations for the administration of the auxiliary grants program. In addition, § 51.5-131 of the Code of Virginia authorizes the commissioner to promulgate regulations necessary to carry out the provisions of the laws of the Commonwealth administered by the Department for Aging and Rehabilitative Services.

Purpose: Implementing third-party payments contributes to the health, safety, welfare, and quality of life of auxiliary grant participants residing in assisted living facilities or adult foster care homes because it permits family members or others to provide goods and services needed by residents but not covered by auxiliary grant payments.

Substance: The proposed amendments (i) add a new section to the regulation to address third-party payments, (ii) define third-party payments and address documentation for these payments as well as permitted uses of third-party payments, and (iii) clarify what services and goods providers are required to provide under the Auxiliary Grants Program.

Issues: Allowing third-party payments will help assisted living providers offset costs of needed goods or services beyond those required by the auxiliary grant provider agreement. The primary disadvantages include that only an estimated 10% or fewer auxiliary grant participants have access to voluntary third-party payments; that the payments must be made after the goods or services are provided; and that third-party payments cannot be used for a private room upgrade.

The disadvantage to local departments of social services and the state Department of Social Services (DSS) is that the payments may complicate the calculation and verification of income for determining auxiliary grant eligibility and that DSS licensing staff will have to add monitoring of third-party payment documentation to inspections. However, it is estimated that only a small percentage of auxiliary grants recipients will have access to third-party payments.

The impact of third- party payments on other federal or state services or benefits is unknown at this time.

Announcement of Periodic Review and Small Business Impact Review: Pursuant to Executive Order 17 (2014) and § 2.2-4007.1 of the Code of Virginia, the agency is conducting a periodic review and small business impact review of this regulation to determine whether this regulation should be terminated, amended, or retained in its current form. Public comment is sought on the review of any issue relating to this regulation, including whether the regulation (i) is necessary for the protection of public health, safety, and welfare or for the economical performance of important governmental functions; (ii) minimizes the economic impact on small businesses in a manner consistent with the stated objectives of applicable law; and (iii) is clearly written and easily understandable.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. Pursuant to Chapters 128 and 387 of the 2012 Acts of Assembly, the Department for Aging and Rehabilitative Services proposes to allow assisted living facilities and adult foster care homes to accept payments from third parties for certain goods and services provided to Auxiliary Grants recipients.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. This regulation contains rules for Auxiliary Grants Program (AG). An AG is an income supplement for individuals who receive Supplemental Security Income and certain other aged, blind, or disabled individuals who reside in a licensed assisted living facility (ALF) or an approved adult foster care home (AFCH). AG is the primary state funding available for assisted living for low-income individuals in Virginia.

House Joint Resolution 580 of the 2011 General Assembly directed the Joint Legislative Audit and Review Commission (JLARC) to study third-party payments for assisted living services.¹ JLARC studied the issue and among other things found that the AG rate was well below Virginia's market prices for assisted living causing ALFs to stop accepting any AG recipients or accepting only highly-functioning individuals.² In order to help address the issue, JLARC made a number of recommendations and noted that payments to ALFs by third parties would have limited impact because fewer than ten percent of AG recipients have such support. Consistent with the JLARC recommendations, Chapters 128 and 387 of the 2012 Acts of Assembly³ allowed ALFs and AFCHs to accept payments from third parties for certain goods and services provided to AG recipients; prohibited counting of these payments as income for the purpose of determining eligibility for or calculating the amount of the AG; restricted third-party payments to items other than food and shelter; and required documentation of such payments. The proposed changes update the regulation to conform to the statutory changes.

The main economic effects of allowing facilities to accept third-party payments include helping facilities to provide goods and services recipients want or need (e.g., supplemental incontinence supplies) and the administrative costs of managing and documenting such payments. It should be noted that the facilities have the option but not the obligation to accept such payments. By choosing to accept such payments they reveal that expected benefits to them exceed anticipated costs. Also, facilities have already been allowed to accept third-party payments since 2012 under the statute. Thus, no significant economic impact is expected upon promulgation of the proposed regulation. The proposed changes are beneficial in that they will update the regulation to conform to the statutory changes.

Businesses and Entities Affected. Currently, there are 281 ALFs and 48 AFCHs accepting AG residents. In fiscal year 2015, the average AG caseload was 4,368.

Localities Particularly Affected. The proposed changes apply statewide.

Projected Impact on Employment. No impact on employment is expected.

Effects on the Use and Value of Private Property. No impact on the use and value of private property is expected.

Real Estate Development Costs. No impact on real estate development costs is expected.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The majority of ALF and AFCH providers that accept AG residents are small businesses. The costs and other effects on them are the same as above.

Alternative Method that Minimizes Adverse Impact. No adverse impact on small businesses is expected.

Adverse Impacts:

Businesses. The proposed amendments do not have an adverse impact on non-small businesses.

Localities. The proposed amendments will not adversely affect localities.

Other Entities. The proposed amendments will not adversely affect other entities.

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¹ http://leg1.state.va.us/cgi-bin/legp504.exe?111+ful+HJ580ER

² http://jlarc.virginia.gov/pdfs/reports/Rpt426.pdf

³ http://leg1.state.va.us/cgi-bin/legp504.exe?121+ful+CHAP0128 & http://lis.virginia.gov/cgi-bin/legp604.exe?121+ful+CHAP0387

Agency's Response to Economic Impact Analysis: The Department for Aging and Rehabilitative Services agrees that the information provided by the Department of Planning and Budget in the July 20, 2016, economic impact analysis of the proposed amendments to 22VAC30-80, Auxiliary Grant Program, was correct at the time of completion.

Summary:

The proposed amendments (i) permit assisted living facilities and adult foster care programs to accept payments from third parties for certain goods and services provided to auxiliary grants recipients, (ii) address documentation for and permitted uses of third-party payments, and (iii) clarify the services and goods that providers are required to provide under the Auxiliary Grants Program.

22VAC30-80-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Adult foster care" or "AFC" means a locally optional program that provides room and board, supervision, and special services to an adult individual who has a physical or mental health need. Adult foster care may be provided for up to three adults individuals by any one provider who is approved by the local department of social services.

"Assisted living care" means a level of service provided by an assisted living facility for adults individuals who may have physical or mental impairments and require at least moderate assistance with the activities of daily living. Included in this level of service are individuals who are dependent in behavior pattern (i.e., abusive, aggressive, disruptive) as documented on the Uniform Assessment Instrument.

"Assisted living facility" or "ALF" means, as defined in § 63.2-100 of the Code of Virginia, any congregate residential setting that provides or coordinates personal and health care services, 24-hour supervision, and assistance (scheduled and unscheduled) for the maintenance or care of four or more adults who are aged, infirm or disabled and who are cared for in a primarily residential setting, except (i) a facility or portion of a facility licensed by the State Board of Health or the Department of Behavioral Health and Developmental Services, but including any portion of such facility not so licensed; (ii) the home or residence of an individual who cares for or maintains only persons related to him by blood or marriage; (iii) a facility or portion of a facility serving infirm or disabled persons between the ages of 18 and 21, or 22 if enrolled in an educational program for the handicapped pursuant to § 22.1-214 of the Code of Virginia, when such facility is licensed by the department as a children's residential facility under Chapter 17 (§ 63.2-1700 et seq.) of Title 63.2 of the Code of Virginia, but including any portion of the facility not so licensed; and (iv) any housing project for persons 62 years of age or older or the disabled that provides no more than basic coordination of care services and is funded by the U.S. Department of Housing and Urban Development, by the U.S. Department of Agriculture, or by the Virginia Housing Development Authority. Included in this definition are any two or more places, establishments or institutions owned or operated by a single entity and providing maintenance or care to a combined total of four or more aged, infirm or disabled adults. Maintenance or care means the protection, general supervision and oversight of the physical and mental well-being of an aged, infirm or disabled individual.

Assuming responsibility for the well-being of individuals residing in an ALF, either directly or through contracted agents, is considered "general supervision and oversight."

"Authorized payee" means the individual who may be a court-appointed conservator or guardian, a person with a valid power of attorney, or an authorized representative with the documented authority to accept funds on behalf of the individual. An authorized payee for the auxiliary grant shall not be (i) the licensee or (ii) the owner of, employee of, or an entity hired by or contracted by the ALF or AFC home.

"Authorized representative" means the person representing or standing in place of the individual receiving the auxiliary grant for the conduct of the auxiliary grant recipient's affairs (i.e., personal or business interests). "Authorized representative" may include a guardian, conservator, attorney-in-fact under durable power of attorney, trustee, or other person expressly named in writing by the individual as his agent. An authorized representative shall not be (i) the licensee or (ii) the owner of, employee of, or an entity hired by or contracted by the ALF or AFC home unless the auxiliary grant recipient designates such a person to assist with financial management of his personal needs allowance as a choice of last resort because there is no other authorized representative willing or available to serve in this capacity.

"Auxiliary Grants Program" or "AG" means a state and locally funded assistance program to supplement income of an individual receiving Supplemental Security Income (SSI) or adult who would be eligible for SSI except for excess income, who resides in an ALF or in AFC home with an established rate.

"Certification" means a an official approval as designated on the form provided by the department and prepared by the ALF annually certifying that the ALF has properly managed the personal funds and personal needs allowances of individuals residing in the ALF and is in compliance with program regulations and appropriate licensing regulations.

"Department" means the Department for Aging and Rehabilitative Services.

"Established rate" means the rate as set forth in the appropriation act or as set forth to meet federal maintenance of effort requirements.

"Licensee" means any person, association, partnership, corporation, or governmental unit to whom a license to operate an AFC is issued in accordance with 22VAC40-60 or a license to operate an ALF is issued in accordance with 22VAC40-72.

"Personal funds" means payments the individual receives, whether earned or unearned, including wages, pensions, Social Security benefits, and retirement benefits. "Personal funds" does not include personal needs allowance.

"Personal needs allowance" means an amount of money reserved for meeting the adult's personal needs when computing the amount of the AG payment a portion of the AG payment that is reserved for meeting the individual's personal needs. The amount is established by the Virginia General Assembly.

"Personal representative" means the person representing or standing in the place of the individual for the conduct of his affairs. This may include a guardian, conservator, attorney-in-fact under durable power of attorney, next-of-kin, descendent, trustee, or other person expressly named by the individual as his agent.

"Personal toiletries" means hygiene items provided to the individual by the ALF or AFC home including deodorant, razor, shaving cream, shampoo, soap, toothbrush, and toothpaste.

"Program" means the Auxiliary Grant Program.

"Provider" means an ALF that is licensed by the Department of Social Services or an AFC provider that is approved by a local department of social services.

"Provider agreement" means a document that the ALF must complete and submit to the department when requesting to be approved for admitting individuals receiving AG.

"Qualified assessor" means an individual who is authorized by 22VAC30-110 to perform an assessment, reassessment, or change in level of care for an individual applying for AG or residing in an ALF.

"Rate" means the established rate.

"Residential living care" means a level of service provided by an ALF for adults individuals who may have physical or mental impairments and require only minimal assistance with the activities of daily living. Included in this level of service are individuals who are dependent in medication administration as documented on the Uniform Assessment Instrument (UAI).

"Third-party payment" means a payment made by a third party to an ALF or AFC home on behalf of an AG recipient for goods or services other than for food, shelter, or specific goods or services required to be provided by the ALF or AFC home as a condition of participation in the Auxiliary Grants Program in accordance with 22VAC30-80-45.

"Uniform Assessment Instrument" or "UAI" means the department-designated assessment form. It is used to record assessment information for determining the level of service that is needed.

22VAC30-80-20. Assessment.

A. In order to receive payment from the program for care in an ALF or in AFC home, an individual applying for AG shall have been assessed by a qualified assessor using the UAI in accordance with 22VAC30-110 and determined to need residential or assisted living care or AFC.

B. As a condition of eligibility for the program, a UAI shall be completed on an individual prior to admission, except for an emergency placement as documented and approved by a Virginia adult protective services worker,; at least once annually,; and whenever there is a significant change in the individual's level of care, and a determination is made that the individual needs residential or assisted living care in an ALF or AFC home.

C. The ALF or AFC provider is prohibited from charging a security deposit or any other form of compensation for providing a room and services to the individual. The collection or receipt of money, gift, donation or other consideration from or on behalf of an individual for any services provided is prohibited.

22VAC30-80-30. Basic services.

The rate established under the program shall cover the following services:

1. Room and board.

a. Provision of a A furnished room in accordance with 22VAC40-72-730;

b. Housekeeping services based on the needs of the individual;

c. Meals and snacks provided in accordance with 22VAC40-72 including, but not limited to food service, nutrition, number and timing of meals, observance of religious dietary practices, special diets, menus for meals and snacks, and emergency food and water. A minimum of three well-balanced meals shall be provided each day. When a diet is prescribed for an individual by his physician, it shall be prepared and served according to the physician's orders. Basic and bedtime snacks shall be made available for all individuals desiring them and shall be listed on the daily menu. Unless otherwise ordered in writing by the individual's physician, the daily menu, including snacks, for each individual shall meet the guidelines of the U.S. Department of Agriculture's Food Guide Pyramid, taking into consideration the age, sex, and activity of the resident. Second servings shall be provided, if requested, at no additional charge. At least one meal each day shall include a hot main dish; and

d. Clean bed linens and towels as needed by the individual and at least once a week.

2. Maintenance and care.

a. Minimal assistance as defined in 22VAC40-72-10 with personal hygiene including bathing, dressing, oral hygiene, hair grooming and shampooing, care of clothing, shaving, care of toenails and fingernails or arranging for such assistance if the resident's medical condition precludes facility from providing the service, arranging for haircuts as needed, and care of needs associated with menstruation or occasional bladder or bowel incontinence;

b. Medication administration as required by licensing regulations including insulin injections;

c. Provision of personal toiletries including toilet paper;

d. Minimal assistance with the following:

(1) Care of personal possessions;

(2) Care of personal funds needs allowance if requested by the individual and provider policy allows this practice, and in compliance with 22VAC40-72-140 and 22VAC40-72-150, Standards for Licensed Assisted Living Facilities;

(3) Use of the telephone;

(4) Arranging transportation;

(5) Obtaining necessary personal items and clothing;

(6) Making and keeping appointments; and

(7) Correspondence;

e. Securing Arranging health care and transportation when needed for medical treatment;

f. Providing social and recreational activities in accordance with 22VAC40-72-520; and

g. General supervision for safety.

22VAC30-80-40. Personal needs allowance.

A. The personal needs allowance is included in the monthly AG payment to the individual and must be used by or on behalf of the individual for personal items. These funds shall not be commingled with the funds of the provider and shall be maintained in a separate bank account or given directly to the individual or authorized representative. The personal needs allowance shall not be charged by the provider for any item or service not requested by the individual. The provider shall not require an individual or his personal authorized representative to request any item or service as a condition of admission or continued stay. The provider must inform the individual or his personal authorized representative of a charge for any requested item or service not covered under the AG and the amount of the charge. The personal needs allowance is expected to cover the cost of the following items and services:

1. Clothing;

2. Personal toiletries not included in those to be provided by the provider or if the individual requests a specific type or brand of toiletry;

3. Personal items including tobacco products, sodas, and snacks beyond those required in subdivision 1 c of 22VAC30-80-30.

4. Hair care services;

5. Over-the-counter medication, medical copayments and deductibles, insurance premiums;

6. Other needs such as postage stamps, dry cleaning, laundry, direct bank charges, personal transportation, and long distance telephone calls;

7. Personal telephone, television, or radio;

8. Social events and entertainment offered outside the scope of the activities program; and

9. Other items agreed upon by both parties except those listed in subsection B of this section.

B. The personal needs allowance shall not be encumbered by the following:

1. Recreational activities required by licensing regulations (including any transportation costs of those activities);

2. Administration of accounts (bookkeeping, account statements);

3. Debts owed the provider for basic services as outlined by regulations; or

4. Provider laundry charges in excess of $10 per month.

22VAC30-80-45. Conditions of participation in the program.

A. Provider agreement for ALF.

1. As a condition of participation in the program, the ALF provider is required to complete and submit to the department a signed provider agreement as stipulated below in subdivision 2 of this subsection. The agreement is to be submitted prior to the ALF accepting AG payment for qualified individuals. A copy of the ALF's current license must be submitted with the provider agreement.

2. The ALF provider shall agree to the following conditions in the provider agreement to participate in the program:

a. Provide services in accordance with all laws, regulations, policies, and procedures that govern the provision of services in the facility;

b. Submit an annual certification form by October 1 of each year;

c. Care for individuals with AG in accordance with the requirements herein in this chapter at the current established rate;

d. Refrain from charging the individual, his family, or his authorized personal representative a security deposit or any other form of compensation as a condition of admission or continued stay in the facility;

e. Accept the established rate as payment in full for services rendered;

f. Account for the personal needs allowances in a separate bank account and apart from other facility funds and issue a monthly statement to each individual regarding his account balance that includes any payments deposited or withdrawn during the previous calendar month;

g. Provide a 60-day written notice to the regional licensing office in the event of the facility's closure or ownership change;

h. Provide written notification of the date and place of an individual's discharge or the date of an individual's death to the local department of social services determining the individual's AG eligibility and to the qualified assessor within 10 days of the individual's discharge or death; and

i. Return to the local department of social services determining the individual's AG eligibility, all AG funds received after the death or discharge date of an individual in the facility.

B. As a condition of participation in the program, the AFC provider shall be approved by a local department of social services and comply with the requirements set forth in 22VAC30-120.

C. ALFs and AFC homes providing services to AG recipients may accept third-party payments made by persons or entities for goods or services to be provided to the AG recipient. The department shall not include such payments as income for the purpose of determining eligibility for or calculating the amount of an AG provided that the payment is made:

1. Directly to the ALF or AFC home by the third party on behalf of the individual after the goods or services have been provided;

2. Voluntarily by the third party, and not in satisfaction of a condition of admission, continued stay, or provision of proper care and services, unless the AG recipient's physical needs exceed the services required to be provided by the ALF as a condition of participation in the auxiliary grant program; and

3. For specific goods or services provided to the individual other than food, shelter, or other specific goods or services required to be provided by the ALF or AFC home as a condition of participation in the AG program.

D. Third-party payments shall not be used to pay for a private room in an ALF or AFC home.

E. ALFs and AFC homes shall document all third-party payments received on behalf of an individual, including the source, amount, and date of the payment, and the goods or services for which such payments were made. Documentation related to the third-party payments shall be provided to the department upon request.

F. ALFs and AFC homes shall provide each AG recipient and his authorized representative with a written list of the goods and services that shall be covered by the AG as defined in this chapter, including a clear statement that the facility shall not charge an individual or the individual's family or authorized representative additional amounts for goods or services included on such list.

22VAC30-80-60. Reimbursement.

A. Any moneys payments contributed toward the cost of care pending AG eligibility determination shall be reimbursed to the individual or contributing party by the ALF or AFC provider once eligibility for AG is established and that payment received. The payment shall be made payable to the individual, who will then reimburse the provider for care. If the individual is not capable of managing his finances, his personal authorized representative is responsible for reimbursing the provider.

B. In the event an ALF is closed, the facility shall prorate the rate up to the date of the individual's discharge and return the balance of the AG to the local department of social services that determined the individual's eligibility for the grant AG. If the facility maintained the individual's personal needs allowance, the facility shall provide a final accounting of the individual's personal needs allowance account within 60 days of the individual's discharge. Verification of the accounting and of the reimbursement to the individual shall be mailed sent to the case management agency responsible for the individual's annual reassessment. In the event of the individual's death, the provider shall give to the individual's personal representative a final accounting of the individual's funds within 60 calendar days of the event. All AG funds received after the death or discharge date shall be returned to the local department of social services responsible for determining the individual's AG eligibility as soon as practicable.

C. Providers who do not comply with the requirements of this regulation chapter may be subject to adverse action, which may include suspension of new AG program admissions or termination of provider agreements.

22VAC30-80-70. Certification ALF certification and record requirements.

A. ALFs shall submit an annual certification form by October 1 of each year for the preceding state fiscal year. The certification shall include the following: identifying information about the ALF, census information including a list of individuals who resided in the facility and received AG during the reporting period and personal needs allowance accounting information. If a provider fails to submit an annual certification form, the provider will not be authorized to accept additional individuals with AG.

B. All information reported by an ALF on the certification form shall be subject to audit by the department. Financial information that is not reconcilable to the provider's general ledger or similar records could result in establishment of a liability to the provider. Records shall be retained for three years after the end of the reporting period or until audited by the department, whichever is first.

C. All records maintained by an AFC provider, as required by 22VAC30-120, shall be made available to the department or the approving local department of social services upon request. All records are subject to audit by the department. Financial information that is not reconcilable to the provider's records could result in establishment of a liability to the provider. Records shall be retained for three years after the end of the reporting period or until audited by the department, whichever is first.