71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2285
A-Engrossed
Senate Bill 888
Ordered by the Senate May 4
Including Senate Amendments dated May 4
Sponsored by COMMITTEE ON HEALTH AND HUMAN SERVICES (at the
request of Oregon Health Care Association and Oregon Alliance
of Senior and Health Services)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Creates Long Term Care Strategic Plan Task Force. Authorizes
long term care facilities to enter into voluntary capacity
reduction agreements. Requires Director of Human Services to
review, approve or deny, and supervise voluntary capacity
reduction agreements. Exempts such agreements from
{ + certain + } antitrust laws. Sunsets Long Term Care Strategic
Plan Task Force on January 1, 2006. Sunsets application process
for voluntary capacity reduction agreement on January 1, 2004.
Declares emergency, effective July 1, 2001.
A BILL FOR AN ACT
Relating to long term care facilities; creating new provisions;
amending ORS 646.740; appropriating money; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) The Long Term Care Strategic Plan Task
Force is created, consisting of 17 members. The members shall
include:
(a) Two members of the Legislative Assembly, to be appointed by
the President of the Senate.
(b) Two members of the Legislative Assembly, to be appointed by
the Speaker of the House of Representatives.
(c) One person representing consumers and advocates for
individuals with long term care needs, to be appointed by the
President of the Senate.
(d) Four persons from statewide organizations representing long
term care providers, including two from not-for-profit providers.
Two shall be appointed by the President of the Senate and two
shall be appointed by the Speaker of the House of
Representatives.
(e) The Long Term Care Ombudsman, who shall serve as a standing
member of the task force.
(f) One representative of the Governor's Commission on Senior
Services, to be appointed by the commission.
(g) One representative of the Oregon Disabilities Commission,
to be appointed by the commission.
(h) One physician specializing in gerontology who is licensed
to practice under ORS chapter 677, to be appointed by the Speaker
of the House of Representatives.
(i) The following persons, to be appointed by the Governor:
(A) One representative of an association representing area
agencies on aging and disabilities;
(B) One representative of the Department of Human Services;
(C) One representative of the Housing and Community Services
Department; and
(D) One physician specializing in gerontology who is licensed
to practice under ORS chapter 677.
(2) The task force shall develop a long range strategic plan
designed to meet the current and future needs for long term care
services in the state. The task force shall consider the
different types of long term care services that are necessary to
meet the needs of Oregon's aging population. The plan shall
include:
(a) Proposals for the development of long term care services
that are sufficient to meet the needs of Oregon's aging
population;
(b) Proposals for the development of quality standards for long
term care facilities; and
(c) Proposals for private and public financing of long term
care services.
(3) The task force shall develop the plan by:
(a) Identifying the projected demographics of senior citizens
of the state;
(b) Identifying the economic resources available to senior
citizens to purchase long term care services;
(c) Identifying strategies to replace, modernize or update
deteriorating long term care facilities in order to meet the
physical, psychological and medical needs of the long term care
population;
(d) Identifying the different types of long term care services
that are needed in rural and urban areas of the state;
(e) Identifying ways to meet the work force needs of long term
care facilities through hiring, training and retraining staff;
(f) Identifying strategies to ensure adequate private and
public funding of long term care services;
(g) Monitoring federal legislation funding acute care and long
term care services; and
(h) Consulting with the Department of Human Services, the
Governor's Commission on Senior Services, the Oregon Disabilities
Commission and the Medicaid Long Term Care Quality and
Reimbursement Advisory Council.
(4) The Department of Human Services and the Oregon Department
of Administrative Services shall share the staffing functions of
the task force. The Legislative Fiscal Office and the Legislative
Administrator shall assist the task force in the performance of
its functions and furnish such information and advice as the
members of the task force consider necessary to perform its
functions.
(5) The task force shall designate one of its members as
chairperson. The chairperson shall call periodic meetings of the
task force and shall assign duties to task force members and
appropriate staff.
(6) All agencies, departments and officers of this state are
directed to assist the task force in the performance of its
functions and to furnish such information and advice as the
members of the task force consider necessary to perform their
functions.
(7) The task force shall adopt policies necessary for the
operation of the task force, including but not limited to quorum
requirements and meeting times and places.
(8) The task force shall report at least annually to the
Director of Human Services on the findings and recommendations of
the task force. + }
SECTION 2. { + The Director of Human Services shall report
biennially to the Legislative Assembly in the manner provided by
ORS 192.245 on the findings and recommendations of the task
force, including the legislative actions and levels of funding
necessary to implement the plan. + }
SECTION 3. { + Section 1 of this 2001 Act is repealed on
January 1, 2006. + }
SECTION 4. { + As used in sections 4 to 16 of this 2001 Act:
(1) 'Long term care facility' means a long term care facility
as described in ORS 442.015, a residential facility as defined in
ORS 443.400 or an adult foster home as defined in ORS 443.705.
(2) 'Party to a voluntary capacity reduction agreement' or '
party' means the owner or operator of a long term care facility
who enters into a voluntary capacity reduction agreement and
applies for approval under sections 4 to 16 of this 2001 Act and
ORS 646.740 and any other entity that, with the approval of the
Director of Human Services, becomes a member of the voluntary
capacity reduction agreement.
(3) 'Target area' means an area of the state identified by the
Department of Human Services where the need for nursing facility
services is less than the availability of those services.
(4) 'Voluntary capacity reduction agreement' means an agreement
between the owners or operators of two or more long term care
facilities to reduce the numbers of beds in nursing facilities in
target areas. + }
SECTION 5. { + (1) The Legislative Assembly finds that direct
competition among long term care facilities in providing long
term care services may not result in the most cost-efficient long
term care services for the citizens of this state, many of whom
receive publicly funded long term care services through Medicaid
or Medicare, and that it is in the public interest to allow
voluntary capacity reduction agreements among long term care
facilities.
(2) The Legislative Assembly declares that, to the extent
provided in sections 4 to 16 of this 2001 Act, it is the policy
and intent of this state to displace competition among long term
care facilities in target areas by allowing long term care
facilities to enter into voluntary capacity reduction agreements
in order to achieve the following goals:
(a) Improvement or maintenance of the quality of long term care
services provided in this state;
(b) To ensure the placement of nursing facility residents in
appropriate living and health services arrangements;
(c) Reduction of, or protection against, rising costs of long
term care services to the state and to consumers;
(d) To avoid, when possible, expenditures of state and federal
funds resulting from the appointment of a trustee pursuant to ORS
441.277 to 441.323;
(e) Improvement or maintenance of efficiency in the delivery of
long term care services; and
(f) Improvement or maintenance of access to publicly funded
long term care services.
(3) The Legislative Assembly declares that the goals identified
in subsection (2) of this section represent the policies of this
state.
(4) The director shall actively supervise the voluntary
capacity reduction agreements in accordance with authority under
sections 4 to 16 of this 2001 Act and ORS 646.740. + }
SECTION 6. { + (1) On or before January 1, 2004, two or more
long term care facilities may apply to the Director of Human
Services for approval of a voluntary capacity reduction
agreement. The application shall include an executed written copy
of the voluntary capacity reduction agreement.
(2) An application for approval of a voluntary capacity
reduction agreement shall set forth any information regarding the
voluntary capacity reduction agreement that the director may
prescribe. The information shall include:
(a) The inspection history, including prior surveys or
investigations of complaints, of the long term care facilities;
(b) A description of the long term care services presently
offered or available in the long term care facilities;
(c) A description of the proposed anticompetitive practices
listed in section 8 of this 2001 Act, any practices that the
parties to the voluntary capacity reduction agreement anticipate
are significant anticompetitive conduct and a description of
practices of the voluntary capacity reduction agreement affecting
costs, prices, personnel positions and allocation of resources;
(d) A description of the goals identified in section 5 (2) of
this 2001 Act that the voluntary capacity reduction agreement is
expected to achieve;
(e) The name of the representative of the party to the
agreement responsible for completing the reports required by
sections 11 and 12 of this 2001 Act;
(f) A proposed budget for implementing the voluntary capacity
reduction agreement, including the state resources that will be
necessary to complete the agreement; and
(g) Other information the director believes will assist in
determining whether the voluntary capacity reduction agreement
will likely achieve the goals listed in section 5 (2) of this
2001 Act. + }
SECTION 7. { + (1) The Director of Human Services shall review
an application under section 6 of this 2001 Act in accordance
with this section and shall grant, deny or request modification
of the application within 90 days of the date the application is
filed. The director shall hold one or more public hearings on
the application, which shall conclude no later than 80 days after
the date the application is filed. The decision of the director
on an application shall be considered an order in a contested
case for the purposes of ORS 183.310 to 183.550.
(2) The director may issue an order approving an application
made under section 6 of this 2001 Act after:
(a) The applicants have demonstrated that they will advance to
a substantial degree the goals of section 5 (2) of this 2001 Act;
(b) The director has reviewed and approved the specifics of the
practices expected to be conducted under the voluntary capacity
reduction agreement; and
(c) The director is satisfied that approval and implementation
of the voluntary capacity reduction agreement is consistent with
the state policy established in ORS 410.010 (1).
(3) In evaluating an application, the director shall consider
whether a voluntary capacity reduction agreement will contribute
to or detract from achieving the goals listed in section 5 (2) of
this 2001 Act. The director may weigh goals relating to
circumstances that are likely to occur without the voluntary
capacity reduction agreement and relating to existing
circumstances. The director may also consider whether any
alternative arrangement would be less restrictive of competition
while achieving the same goals.
(4) An order approving a voluntary capacity reduction agreement
shall identify the permitted activities in accordance with the
application for a voluntary capacity reduction agreement for
purposes of granting antitrust immunity under sections 4 to 16 of
this 2001 Act.
(5) An order issued by the director approving a voluntary
capacity reduction agreement shall include:
(a) The practices approved by the director;
(b) The activities required by the director to ensure that the
requirements of ORS 410.505 to 410.545 are met;
(c) The goals listed in section 5 (2) of this 2001 Act that the
voluntary capacity reduction agreement is expected to achieve;
and
(d) A finding that the voluntary capacity reduction agreement
is in the public interest.
(6) An order denying an application for a voluntary capacity
reduction agreement shall identify the findings of fact and
reasons supporting denial.
(7) Either the director or the parties to a voluntary capacity
reduction agreement may request a modification of an application
made under section 6 of this 2001 Act. The director shall issue
an order under this section within 30 days after submission of
the modified application. + }
SECTION 8. { + To the extent permitted and directed by an
order approving a voluntary capacity reduction agreement
application under section 7 of this 2001 Act, parties to a
voluntary capacity reduction agreement may coordinate:
(1) A reduction in nursing facility beds to limit or eliminate
excess nursing facility capacity in target areas;
(2) The identification of nursing facility residents who shall
be relocated because of the loss of nursing facility beds when
the capacity reduction agreement is implemented; and
(3) The transfer of nursing facility residents to other long
term care facilities. + }
SECTION 9. { + The Director of Human Services may require the
parties to a voluntary capacity reduction agreement that has been
approved by the director and that is in effect to provide
information to the director regarding the activities of the
parties and the implementation of the voluntary capacity
reduction agreement. If the director finds that the activities of
the parties are not authorized by the order or that the goals set
forth in the order are not being fulfilled to a substantial
degree, the director may take one or more of the following
actions:
(1) Order the parties to take remedial action to comply with
the order;
(2) Modify the order as appropriate to adjust to changes
approved by the director in the voluntary capacity reduction
agreement to the extent allowed by section 10 of this 2001 Act;
or
(3) Issue an order revoking the approval of the voluntary
capacity reduction agreement. + }
SECTION 10. { + (1) To modify or revoke an order approving a
voluntary capacity reduction agreement, order remedial action or
seek restitution from the parties, the Director of Human Services
shall:
(a) Serve upon the parties a proposed order outlining the
actions that the director intends to take; and
(b) Issue findings that the proposed action is necessary and
appropriate.
(2) No sooner than 21 days after the date the proposed order
has been served on the parties, the director may issue a final
order if:
(a) The parties have not taken appropriate remedial action to
resolve the director's concerns; or
(b) A party to the agreement has not contested the proposed
order under subsection (3) of this section.
(3) A party to a voluntary capacity reduction agreement may
contest the proposed order by filing a written request for a
contested case hearing with the director not later than 20 days
following the date of the proposed order. Unless inconsistent
with this subsection, the provisions of ORS 183.310 to 183.550,
as applicable, shall govern the hearing. The proposed order shall
be final if a request for a hearing is not received.
(4) The director may not modify a voluntary capacity reduction
agreement without the approval of the parties to the agreement
when any party to the agreement demonstrates that:
(a) The parties to the agreement acted in good faith to
implement a voluntary capacity reduction agreement as approved by
the director; and
(b) There has been a change of circumstances beyond the control
of the parties that, in combination with the modifications of the
voluntary capacity reduction agreement in the director's proposed
order, causes a substantial and unforeseen financial burden on
one or more of the parties to the agreement. + }
SECTION 11. { + (1) Not later than 60 days following the
anniversary date of approval of a voluntary capacity reduction
agreement, a representative of each party to the agreement shall
submit an annual report to the Director of Human Services on a
form prescribed by the director. The director may request that a
representative provide additional information pertaining to the
agreement. The director shall review the annual report and any
additional information submitted to the director and determine:
(a) Whether the voluntary capacity reduction agreement is being
carried out in accordance with the order of the director
approving the agreement application under section 7 of this 2001
Act;
(b) Which of the goals identified in the order are being
achieved and to what degree; and
(c) Whether the parties are engaging in activities that are not
authorized by the order.
(2) Not later than 30 days after receipt of the annual report
and any additional information requested by the director, the
director shall notify the parties in writing that:
(a) The annual report is accepted by the director and the
activities of the parties are in compliance with the order; or
(b) The annual report is not accepted by the director and the
parties are directed to take those actions necessary to fulfill
the obligations of the party. + }
SECTION 12. { + (1) Within 60 days of the reduction of nursing
facility beds or the closure of a nursing facility in a target
area, a representative of each party to the voluntary capacity
reduction agreement shall together submit a closure report to the
Director of Human Services on a form prescribed by the director.
The director may request that a representative provide additional
information from a party if the director believes that the
information is necessary to evaluate and act on the closure
report.
(2) The director shall review the closure report and any
additional information submitted by a party and determine whether
the parties have fulfilled their obligations under the voluntary
capacity reduction agreement and have met the goals set forth in
the order to the satisfaction of the director.
(3) If the director finds that the obligations of the parties
under the voluntary capacity reduction agreement have been
fulfilled and the goals of the order met, the director shall
accept the report and issue written findings that the obligations
of the parties to the voluntary capacity reduction agreement have
been fulfilled, and no further reports are required.
(4) If the director finds that the obligations of the parties
have not been fulfilled, the director shall direct the parties to
take those actions necessary to fulfill the obligations of the
parties. Upon completion of those actions, the parties shall
together submit a new closure report to the director. If the
director finds that the obligations of the parties under the
voluntary capacity reduction agreement have been fulfilled and
the goals of the order met, the director shall accept the report
and issue written findings that the obligations of the parties to
the voluntary capacity reduction agreement have been fulfilled,
and no further reports are required. + }
SECTION 13. { + If the parties to a voluntary capacity
reduction agreement provide the Director of Human Services with
written or oral information that is confidential or otherwise
protected from disclosure under Oregon law, the disclosures shall
not be considered a waiver of any right to protect the
information from disclosure in other proceedings. + }
SECTION 14. { + (1) Notwithstanding the provisions of ORS
646.705 to 646.836:
(a) A voluntary capacity reduction agreement for which approval
has been granted under sections 4 to 16 of this 2001 Act and ORS
646.740 is a lawful agreement to the extent that the parties to
the voluntary capacity reduction agreement engage in activities
permitted by the order, are supervised by the Director of Human
Services and are in compliance with the order; and
(b) If the parties to a voluntary capacity reduction agreement
apply to the director as provided in section 6 of this 2001 Act,
the conduct of the parties and all other participants in
negotiating or entering into a voluntary capacity reduction
agreement is lawful conduct.
(2) Subsection (1)(b) of this section applies also to persons
negotiating in good faith a voluntary capacity reduction
agreement with the active supervision of the director if it can
be demonstrated, by a preponderance of the evidence, that the
persons intended to enter into a voluntary capacity reduction
agreement but did not reach an agreement.
(3) Nothing in sections 4 to 16 of this 2001 Act and ORS
646.740 shall be construed to immunize any person from liability
or impose liability where none would otherwise exist under
federal or state antitrust laws for conduct in negotiating and
entering into a voluntary capacity reduction agreement for which
no application was filed with the director. + }
SECTION 15. { + The Director of Human Services shall adopt
rules as may be necessary to carry out the provisions of sections
4 to 16 of this 2001 Act. + }
SECTION 16. { + Notwithstanding the provisions of ORS 183.310
(6) and 183.480, only a party to a voluntary capacity reduction
agreement or the Director of Human Services shall be entitled to
a contested case hearing or judicial review of an order issued
pursuant to sections 4 to 16 of this 2001 Act and ORS
646.740. + }
SECTION 17. ORS 646.740 is amended to read:
646.740. { - No - } { + The + } provisions of ORS
{ - 136.617, - } 646.705 to 646.805 and 646.990 { - shall - }
{ + may not + } be construed to make illegal:
(1) The activities of any labor organization or individual
working men and women permitted by ORS chapters 661 to 663;
(2) The right of producers of agricultural commodities and
commercial fishermen to join, belong to and act through
cooperative bargaining associations under ORS 646.515 to 646.545.
For the purpose of this subsection, activities of cooperative
bargaining associations and their members that are lawful under
15 U.S.C. 521 and 522 or 7 U.S.C. 291 and 292 are lawful under
ORS 646.515 to 646.545;
(3) The activities of any person subject to regulation by the
Public Utility Commission under ORS chapters 756 to 759 to the
extent that such activities are so regulated and are lawful
thereunder or the activities of any person conducted or carried
out in accordance with any agreement or procedure approved as
provided in 49 U.S.C. 5b or 5c;
(4) The activities of any person subject to regulation by the
Director of the Department of Consumer and Business Services
under ORS chapters 731 to 750 to the extent that such activities
are so regulated and are lawful thereunder;
(5) The activities of any state or national banking institution
or savings and loan association, and of any other lending
institution, to the extent that such activities are regulated by
the Director of the Department of Consumer and Business Services
under ORS chapters 706 to 725 and are lawful thereunder;
(6) Any other activity specifically authorized under state law
or local ordinance;
(7) The activities of any metropolitan service district formed
under ORS chapter 268 and the activities of any person subject to
regulation by a metropolitan service district formed under ORS
chapter 268 to the extent that those activities are so regulated
and are lawful thereunder;
(8) The activities of any person conducted or carried out in
accordance with the terms and conditions of a certificate issued
pursuant to 15 U.S.C. 4001 to 4021; { - or - }
(9) The activities of a health care provider authorized by and
in accordance with ORS 442.700 to 442.760 to the extent the
activities are regulated and lawful under ORS 442.700 to 442.760
{ - . - } { + ; or
(10) The activities of a nursing facility authorized, approved
and actively supervised by the Director of Human Services in
accordance with sections 4 to 16 of this 2001 Act. + }
SECTION 18. { + Section 6 of this 2001 Act is repealed on
January 1, 2004. + }
SECTION 19. { + Section 7 of this 2001 Act is repealed on
December 31, 2004. + }
SECTION 20. { + The Department of Human Services may work with
other state agencies and private entities to develop the methods
and forms of state resources that may be used to support
voluntary capacity reduction agreements. + }
SECTION 21. { + There is appropriated to the Department of
Human Services, for the biennium beginning July 1, 2001, out of
the General Fund, the amount of $___ for the purpose of carrying
out sections 4 to 16 of this 2001 Act. + }
SECTION 22. { + This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2001 Act takes effect
July 1, 2001. + }
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