2022 Colorado Code
Title 25 - Public Health and Environment
Article 1 - Administration
Part 1 - Department of Public Health and Environment
§ 25-1-107.5. Additional Authority of Department - Rules - Remedies Against Nursing Facilities - Criteria for Recommending Assessments for Civil Penalties - Cooperation With Department of Health Care Policy and Financing - Nursing Home Penalty Cash Fund - Nursing Home Innovations Grant Board - Reports - Transfer of Contracts to the Department

1. For the purposes of this section, unless the context otherwise requires:
   1. Repealed.
   2. "Federal regulations for participation" means the regulations found in part 442 of title 42 of the code of federal regulations, as amended, for participation under Title XIX of the federal "Social Security Act", as amended.
   3. "Benefit residents of nursing facilities" means that a grant has a direct impact on the residents of nursing facilities or has an indirect impact on the residents through education of nursing facility staff.
   4. "Board" means the nursing home innovations grant board, authorized by subsection (6) of this section.
   5. "Nursing facility" means any skilled or intermediate nursing care facility that receives federal and state funds under Title XIX of the federal "Social Security Act", as amended.

2. The department, as the state agency responsible for certifying nursing facilities, is authorized to adopt rules necessary to establish a series of remedies in accordance with this section and the federal "Omnibus Budget Reconciliation Act of 1987", Pub.L. 100-203, as amended, that may be imposed by the department of health care policy and financing when a nursing facility violates federal regulations for participation in the medicaid program. The remedies shall include any remedies required under federal law and the imposition of civil money penalties.
3. 1. In accordance with rules promulgated under this section, the department is authorized to recommend to the department of health care policy and financing an appropriate civil money penalty based on the nature of the violation. Any penalties recommended shall not be less than one hundred dollars nor more than ten thousand dollars for each day the facility is found to be in violation of the federal regulations. Penalties assessed shall include interest at the statutory rate.
   2. The department shall adopt criteria for determining the amount of the penalty to be recommended for assessment. The criteria shall include, but need not be limited to, consideration of the following factors:
      1. The period during which the violation occurred;
      2. The frequency of the violation;
      3. The nursing facility's history concerning the type of violation for which the penalty is assessed;
      4. The nursing facility's intent or reason for the violation;
      5. The effect, if any, of the violation on the health, safety, security, or welfare of the residents of the nursing facility;
      6. The existence of other violations, in combination with the violation for which the penalty is assessed, that increase the threat to the health, safety, security, or welfare of the residents of the nursing facility;
      7. The accuracy, thoroughness, and availability of records regarding the violation that the nursing facility is required to maintain; and
      8. The number of additional related violations occurring within the same period as the violation in question.

   3. 1. If the department finds that a violation is life threatening to one or more residents or creates a direct threat of serious adverse harm to the health, safety, security, rights, or welfare of one or more residents, the department of health care policy and financing shall impose a penalty for each day the deficiencies that constitute the violation are found to exist.
      2. Except as provided in subsection (3)(c)(I) of this section, the department of health care policy and financing shall not assess a penalty prior to the date a nursing facility receives written notice from the department of its recommendation to assess civil money penalties. The department shall provide the notice to the facility no later than ten days after the last day of the inspection or survey during which the deficiencies that constitute the violation were found. The notice shall:
         1. Set forth the deficiencies that are the basis for the recommendation to assess a penalty;
         2. Provide instructions for responding to the notice; and
         3. Require the nursing facility to submit a written plan of correction. The department shall adopt criteria for the submission of written plans of correction by nursing facilities and approval of the plans by the department. If the facility acts in a timely and diligent manner to correct the violation in accordance with an approved plan of correction, the department may recommend to the department of health care policy and financing that it suspend or reduce the penalty during the period of correction specified in the approved plan of correction.

   4. Except as provided in sub-subparagraph (C) of subparagraph (II) of paragraph (c) of this subsection (3), the department of health care policy and financing shall continue to assess any penalty recommended under this section until the department verifies to the department of health care policy and financing that the violation is corrected or until the nursing facility notifies the department that correction has occurred, whichever is earlier. If the penalty has been suspended or reduced pursuant to sub-subparagraph (C) of subparagraph (II) of paragraph (c) of this subsection (3) and the nursing facility has not corrected the violation, the department of health care policy and financing shall reinstate the penalty at an increased amount and shall retroactively assess the penalty to the date the penalty was suspended.

4. 1. The department of health care policy and financing, after receiving a recommendation from the department, is authorized to assess, enforce, and collect the civil money penalty pursuant to section 25.5-6-205, C.R.S., for credit to the nursing home penalty cash fund, created pursuant to section 25.5-6-205 (3)(a), C.R.S.
   2. 1. The department and the department of health care policy and financing have joint authority for administering the nursing home penalty cash fund; except that final authority regarding the administration of money in the fund is in the department.
      2. 1. The authority of both departments includes establishing circumstances under which funds may be distributed in order to protect the health or property of individuals residing in nursing facilities that the department of health care policy and financing has found to be in violation of federal regulations for participation in the medicaid program.
         2. The departments shall collaborate at least annually, and more often as needed, to assess and review emergency funding needs and response plans for potential nursing facility closures. The departments shall jointly administer emergency funding.

      3. The state board of health may promulgate rules necessary to ensure proper administration of the nursing home penalty cash fund.

   3. The departments shall consider, as a basis for distribution from the nursing home penalty cash fund, the following:
      1. The need to pay costs to:
         1. Relocate residents to other facilities when a nursing facility closes;
         2. Maintain the operation of a nursing facility pending correction of violations;
         3. Close a nursing facility;
         4. Reimburse residents for personal funds lost;

      2. Grants to be approved for measures that will benefit residents of nursing facilities by fostering innovation and improving the quality of life and care at the facilities, including, but not limited to:
         1. Consumer education to promote resident-centered care in nursing facilities;
         2. (Deleted by amendment, L. 2014.)
         3. Initiatives in nursing facilities related to the quality measures promoted by the federal centers for medicare and medicaid services and other national quality initiatives;
         4. Education and consultation for purposes of identifying and implementing resident-centered care initiatives in nursing facilities; and
         5. Projects that support or compliment statewide quality and safety goals of the departments.

   4. 1. Repealed.
      2. The department, after receiving a recommendation from the board and approval from the federal centers for medicare and medicaid services, shall consider grants issued as sole source procurements that are not subject to the "Procurement Code", articles 101 to 112 of title 24.

         (II.5) (A) The board shall make recommendations for the approval of grants that benefit residents of nursing facilities for at least one year and not more than three-year cycles. The projects awarded via grants must be portable, sustainable, and replicable in other nursing facilities.

         (B) The department and the board shall develop processes for grant payments, which processes may allow grant payments to be made in advance of the delivery of goods and services to grantees. Grantees receiving advance payments shall report progress to the board. No state agency, nor any other governmental entity, with the exception of a facility that is owned or operated by a governmental agency and that is licensed as a nursing care facility under section 25-1.5-103 (1)(a)(I)(A), may apply for or receive a grant under this subsection (4).

         (C) Any moneys remaining in the fund at the end of a fiscal year may be held over and used by the board in the next fiscal year. Unexpended and unencumbered moneys from an appropriation in the annual general appropriation act to the departments for the purpose of carrying out the nursing home innovations grant program under this section remain available for expenditure by the departments in the next fiscal year without further appropriation. This sub-subparagraph (C) applies to appropriations made by the general assembly for fiscal years ending on and after June 30, 2014. On or before June 30, 2014, and on or before June 30 of each year thereafter, the departments shall notify the state controller of the amount of the appropriation from the annual general appropriation act for the current fiscal year the departments need to remain available for expenditure in the next fiscal year. The departments may not expend more than the amount stated in the notice under this sub-subparagraph (C).

         (D) Other policies of the board must conform with practices of other granting organizations. The work product from grants funded through the nursing home penalty cash fund is the intellectual property of the department and must be made available without charge to all nursing homes in the state. The state board of health may adopt rules as necessary to govern the procedure for awarding grants under this section.

         (II.7) The department shall adhere to all state and federal requirements for the encumbrance and payment of grants under this subsection (4)(d). In addition, the department shall:

         1. Document necessary federal permissions for the use of moneys from the nursing home penalty cash fund, created under section 25.5-6-205, C.R.S., prior to making any payment or encumbrance; and
         2. Adhere to the written determination of the board under subsection (6) of this section in releasing state moneys for payment to grantees under this section. The department's adherence to the written determination of the board is sufficient evidence to ensure that work was completed fully and adequately.

      3. The state board of health shall establish a minimum reserve amount to be maintained in the nursing home penalty cash fund to ensure that there is sufficient money for the departments to distribute in accordance with subsection (4)(b)(II) of this section, if needed. The departments shall not expend money from the fund for the purposes described in subsection (4)(c)(II) of this section if the expenditure would cause the fund balance to fall below the minimum reserve amount.
      4. In determining how to allocate the money authorized to be distributed pursuant to this subsection (4)(d), the departments shall take into consideration the recommendations of the board made pursuant to subsection (6)(c) of this section. If the departments disagree with the recommendations of the board, they shall meet with the board to explain their rationale and shall seek to achieve a compromise with the board regarding the allocation of the money. If a compromise cannot be achieved with regard to all or a portion of the money to be distributed, the state board of health shall have the final authority regarding the distribution of money for which a compromise has not been reached.

   5. 1. The departments shall not utilize money from the nursing home penalty cash fund for costs of administration associated with any specific movement, association, or organization; except that the appropriation for administration of the grants authorized under this section shall not exceed ten percent of the appropriation for the disbursed grants. The department and the department of heath care policy and financing shall use any such appropriation for administration to administer the grant program described in this section and to improve nursing facility innovation and quality with the goal of reducing future penalties.
      2. For purposes of this section, the departments shall jointly develop an annual administrative budget utilizing money from the nursing home penalty cash fund for the purposes of administering the fund and supporting the board. These purposes may include, but are not limited to:
         1. All required state and federal reporting;
         2. Public website maintenance;
         3. Marketing the nursing home penalty cash fund and grantee recruitment;
         4. Grant development, monitoring, and payment processing;
         5. Outcome measurement utilizing state and federal data sources;
         6. Coordination with quality programs already in place by the departments;
         7. Grantee monitoring and support;
         8. Costs associated with emergency closures and payment auditing; and
         9. Maintenance of access to complete projects, including trainings, recordings, and project deliverables.

5. Repealed.
6. 1. No later than September 1, 2014, the department of health care policy and financing shall establish the nursing home innovations grant board under the department of health care policy and financing either directly or by contract with or grant to any public agency or appropriate private nonprofit organization. On and after July 1, 2021, the powers, duties, and functions related to the board are transferred from the department of health care policy and financing to the department by a type 2 transfer as such transfer is defined in the "Administrative Organization Act of 1968", article 1 of title 24. The department, in consultation with stakeholders, shall determine the appropriate entity to administer the board. The board consists of ten members as follows:
      1. The state long-term care ombudsman or his or her designee;
      2. The executive director of the department of health care policy and financing or the executive director's designee;
      3. The executive director of the department of public health and environment or the executive director's designee;
      4. Seven members appointed by the governor as follows:
         1. Four members currently employed in long-term care nursing facilities;
         2. One member who is or represents a consumer of long-term care;
         3. One member representing the disability community who is either a resident of a nursing facility or a family member of a nursing facility resident; and
         4. One member representing the business community.
         5. (Deleted by amendment, L. 2014.)

   2. The members of the board shall serve without compensation.
   3. The board shall review all grant projects, determine whether the grantees completed their grant projects and grant objectives, and shall provide written recommendations to the department to make or withhold payment to grantees.
   4. By October 1 of each year, the departments, with the assistance of the board, shall jointly submit a report to the governor and the health and human services committee of the senate and the public health care and human services committee of the house of representatives of the general assembly, or their successor committees, regarding the expenditure of moneys in the nursing home penalty cash fund for the purposes described in subparagraph (II) of paragraph (c) of subsection (4) of this section. The report must detail the amount of moneys expended for such purposes, the recipients of the funds, the effectiveness of the use of the funds, and any other information deemed pertinent by the departments or requested by the governor or the committees. Notwithstanding the requirement in section 24-1-136 (11), C.R.S., the report required in this paragraph (d) continues indefinitely.

7. Repealed.
8. On and after July 1, 2021, whenever the department of health care policy and financing is referred to or designated by any contract or other document in connection with the duties and functions under this section, such reference or designation shall be deemed to apply to the department. All contracts entered into by the departments prior to July 1, 2021, in connection with the duties and functions under this section are hereby validated, with the department succeeding to all rights and obligations under such contracts.

Source: L. 89, 1st Ex. Sess.: Entire section added, p. 24, § 1, effective July 11. L. 91: (3)(b) amended, p. 1856, § 12, effective April 11; (4) added, p. 687, § 53, effective April 20; entire section repealed, p. 687, § 53, effective July 1, 1993. L. 94: Entire section RC&RE, p. 1316, § 1, effective May 25; (2), (3)(a), (3)(c)(II)(C), (3)(d), (4)(a), and (4)(b) amended, p. 2617, § 29, effective July 1. L. 97: (5) repealed, p. 106, § 2, effective March 24. L. 2006: (4)(a) amended, p. 2012, § 80, effective July 1. L. 2009: Entire section amended, (HB 09-1196), ch. 428, p. 2383, § 1, effective June 4. L. 2014: (1)(a) repealed, (1)(b.5) and (1)(b.7) added, and (4)(c)(II), (4)(d), (4)(e), (6), and (7) amended, (SB 14-151), ch. 339, p. 1507, § 1, effective June 5. L. 2019: (4)(d)(I) and (7) repealed and (4)(d)(III) amended, (SB 19-254), ch. 336, p. 3090, § 2, effective August 2. L. 2021: IP(3)(c)(II), (4)(b), IP(4)(c)(II), (4)(c)(II)(C), (4)(c)(II)(D), (4)(d)(II), (4)(d)(II.5)(A), (4)(d)(II.5)(B), (4)(d)(II.5)(D), (4)(d)(II.7), (4)(d)(III), (4)(d)(IV), (4)(e), IP(6)(a), and (6)(b) amended and (4)(c)(II)(E) and (8) added, (SB 21-128), ch. 302, p. 1814, § 1, effective June 23.

Cross references: For the legislative declaration contained in the 1994 act amending subsections (2), (3)(a), (3)(c)(II)(C), (3)(d), (4)(a), and (4)(b), see section 1 of chapter 345, Session Laws of Colorado 1994.