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
Senate Bill 888
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 as
introduced.
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 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 11 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) Two persons representing consumers and advocates for
individuals with long term care needs, one to be appointed by the
President of the Senate and one by the Speaker of the House of
Representatives.
(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.
(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 shall provide staff
necessary for the performance of the functions of the task force.
(5) 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.
(6) 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.
(7) The task force shall report biennially to the Director of
Human Services and the Legislative Assembly in the manner
provided by ORS 192.245 on the findings and recommendations of
the task force, including the legislative actions necessary to
implement the plan. + }
SECTION 2. { + The Director of Human Services shall develop a
biennial plan in conjunction with the budgeting process, for
review by each Legislative Assembly, that includes the
implementation of the long range strategic plan developed by the
Long Term Care Strategic Plan Task Force under section 1 of this
2001 Act. + }
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) 'Long term care services' means services offered or
provided in a long term care facility such as:
(a) Health care services;
(b) Nursing services;
(c) Supervision;
(d) Assistance while bathing, dressing, grooming or eating;
(e) Transportation;
(f) Money management;
(g) Recreation; and
(h) Room and board.
(3) 'Party to a voluntary capacity reduction agreement' or '
party' means a long term care facility that 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.
(4) 'Target area' means an area of the state identified by the
Department of Human Services where the need for long term care
services is less than the availability of those services.
(5) 'Voluntary capacity reduction agreement' means an agreement
between two or more long term care facilities to reduce the
numbers of beds in the long term care facilities and the
availability of long term care services 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 providing long term care services.
(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 in each instance the following goals:
(a) Improvement or maintenance of the quality of long term care
services provided in this state;
(b) Improvement or maintenance of the availability of long term
care services in communities in this state;
(c) Reduction of, or protection against, rising costs of long
term care services;
(d) Reduction of, or protection against, duplication of
services including sites of service;
(e) Improvement or maintenance of efficiency in the delivery of
long term care services;
(f) Improvement or maintenance of access to publicly funded
long term care services; and
(g) Improvement in the continuity of 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 Legislative Assembly further declares that once the
Director of Human Services approves a voluntary capacity
reduction agreement under section 7 of this 2001 Act and reviews
the annual report under section 10 of this 2001 Act, there is an
interest in ensuring the quality and availability of long term
care services by voluntary capacity reduction agreements, to the
extent that quality and availability are consistent with
achieving the goals identified in subsection (2) of this section.
(5) 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 be made in the form and manner and
shall set forth any information regarding the voluntary capacity
reduction agreement that the director may prescribe. The
information shall include, but not be limited to:
(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 voluntary capacity reduction agreement;
(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 shall 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
and ORS 646.740; and
(b) The director has reviewed and approved the specifics of the
anticompetitive practices expected to be conducted under the
voluntary capacity reduction agreement.
(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 and define the limits of the permitted activities
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) Approval of specific anticompetitive practices listed in
section 8 of this 2001 Act;
(b) Approval of the proposed budget of the voluntary capacity
reduction agreement, including approval of loans, financial
guarantees or other financing mechanisms requested by the
parties;
(c) The goals listed in section 5 (2) of this 2001 Act that the
voluntary capacity reduction agreement is expected to achieve;
and
(d) Approval of the voluntary capacity reduction agreement and
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 all 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. { + (1) To the extent permitted by an order issued
under section 7 of this 2001 Act, parties to a voluntary capacity
reduction agreement may engage in the following anticompetitive
practices in target areas in order to achieve the goals described
in section 5 (2) of this 2001 Act:
(a) Reduce or eliminate competition between long term care
facilities;
(b) Provide financial incentives for long term care providers
to remove themselves from the market;
(c) Acquire or maintain a monopoly in long term care;
(d) Reallocate long term care services;
(e) Displace residents who are required to move from a long
term care facility as a result of a voluntary capacity reduction
agreement; and
(f) Engage in other activities that might give rise to
liability under sections 4 to 16 of this 2001 Act or federal
antitrust laws.
(2) The Legislative Assembly intends that all persons arranging
or participating in a voluntary capacity reduction agreement
approved and conducted in accordance with an order issued under
section 7 of this 2001 Act and all persons participating in good
faith negotiations conducted pursuant to section 7 of this 2001
Act shall:
(a) Not be subject to the provisions of ORS 646.705 to 646.836
as long as the activities of the voluntary capacity reduction
agreement are regulated, lawful and approved in accordance with
sections 4 to 16 of this 2001 Act and ORS 646.740; and
(b) Receive the full benefit of state action immunity under
federal antitrust laws. + }
SECTION 9. { + Not later than 180 days after the Director of
Human Services issues an order approving an application for a
voluntary capacity reduction agreement under section 7 of this
2001 Act, and not later than 60 days following each anniversary
date of the approval of a voluntary capacity reduction agreement
by the Director of Human Services, a representative of each party
to the agreement shall deliver an annual report to the director
on a form prescribed by the director. The report shall
specifically describe:
(1) How the voluntary capacity reduction agreement is being
carried out in accordance with the order;
(2) Which of the goals identified in the order are being
achieved and to what extent; and
(3) Whether the requirements of the agreement are
fulfilled. + }
SECTION 10. { + (1) The Director of Human Services shall
review and evaluate the annual report delivered under section 9
of this 2001 Act. The director shall:
(a) Determine the extent to which the voluntary capacity
reduction agreement is achieving the goals identified in the
order;
(b) Review the activities being conducted to achieve the goals;
(c) Determine whether each of the activities is still necessary
and appropriate to achieve the goals; and
(d) Determine whether the requirements of the agreement are
fulfilled.
(2) If the director determines that additional information is
needed for the review described in subsection (1) of this
section, the director may order the parties to provide the
information within a specified time.
(3) Within 60 days after receiving the annual report or any
additional information ordered under subsection (2) of this
section, the director shall:
(a) Approve the report if the director determines that the
voluntary capacity reduction agreement is operating in accordance
with the order and the goals identified in the order are being
substantially advanced by the voluntary capacity reduction
agreement;
(b) Modify the order as appropriate to adjust to changes in the
voluntary capacity reduction agreement approved by the director
and approve the report as provided in paragraph (a) of this
subsection;
(c) Order the parties to make remedial changes in
anticompetitive practices not in compliance with the order and
request the parties to report on progress not later than a
deadline specified by the director;
(d) Revoke approval of the voluntary capacity reduction
agreement;
(e) Take any of the actions set forth in section 12 of this
2001 Act; or
(f) Declare that the requirements of the agreement have been
fulfilled, rendering the agreement null and void, and notify the
parties that the agreement is void and no further reports are
required. + }
SECTION 11. { + (1) Any person may file a complaint with the
Director of Human Services requesting that a specific decision or
action of a voluntary capacity reduction agreement supervised by
the director be reversed or modified, or that approval for all or
part of the activities permitted by the order be suspended or
terminated. The complaint shall allege the reason for the
requested action and shall include any evidence relating to the
complaint.
(2) The director on the director's own initiative may at any
time request information from the parties to a voluntary capacity
reduction agreement concerning the activities of the voluntary
capacity reduction agreement to determine whether the voluntary
capacity reduction agreement is in compliance with the order. + }
SECTION 12. { + (1) During the review of the annual report
described in section 9 of this 2001 Act, after receiving a
complaint under section 11 of this 2001 Act or on the director's
own initiative, the Director of Human Services may take one or
more of the following actions:
(a) If the director determines that a particular decision or
action is not in accordance with the order, or that the parties
are engaging in anticompetitive practices not permitted by the
order, the director may direct the parties to identify and
implement corrective action to ensure compliance with the order
or may modify the order.
(b) If the director determines that the parties to the
voluntary capacity reduction agreement are engaging in unlawful
activity not permitted by the order or are not complying with the
directive given under paragraph (a) of this subsection, the
director may serve on the parties to the voluntary capacity
reduction agreement a proposed order directing the parties to
take all action necessary to address activities that are not
authorized by the director, including but not limited to:
(A) Conform with the directive under paragraph (a) of this
subsection; or
(B) Cease and desist from engaging in the activity.
(c) The director may seek restitution for damages resulting
from the unauthorized activities.
(2) The parties to the voluntary capacity reduction agreement
shall have up to 30 days to comply with a proposed order under
subsection (1)(b) of this section unless the parties demonstrate
additional time is needed for compliance.
(3) If the director determines that the parties to the
voluntary capacity reduction agreement are in substantial
noncompliance with the proposed order, the director may seek an
appropriate injunction in the circuit courts in the county where
the long term care facilities are located.
(4) If the director determines that a sufficient number of the
goals set forth in section 5 (2) of this 2001 Act are not being
achieved or that the parties to the voluntary capacity reduction
agreement are engaging in activity not permitted by the order
approving the agreement, the director may serve on the parties a
proposed order to suspend or terminate approval for all or part
of the activities approved and permitted by the order approving
the agreement.
(5) A proposed order under subsection (1)(b) or (4) of this
section may be served upon the parties to the voluntary capacity
reduction agreement without prior notice. The parties 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. The proposed order shall become
final if no request for a hearing is received. Unless
inconsistent with this subsection, the provisions of ORS 183.310
to 183.550, as applicable, shall govern the hearing procedure and
any judicial review.
(6) The only effect of an order suspending or terminating
approval under sections 4 to 16 of this 2001 Act shall be to
withdraw the immunities granted under section 8 (2) of this 2001
Act for anticompetitive practices permitted by the order and
taken after the effective date of the order. + }
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 long term care facility authorized by
and in accordance with sections 4 to 16 of this 2001 Act to the
extent the activities are regulated and lawful under 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 June
30, 2004. + }
SECTION 20. { + 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 21. { + 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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