Wisconsin Legislature: DHS 122.07(1)(c)1.b.

a. The department receives at least 30 days notice of reconversion, if all beds to be reconverted are unoccupied, or a notice that the facility has complied with the requirements of s. 50.03 (14) (c) to (e), Stats., if any bed to be reconverted is occupied; and

b. Any partial reconversion results in a remaining FDD of at least 3 FDD beds which meets the provisions of s. DHS 122.07 (1m) (c).

(8) Extension. The department may extend by 60 days the review cycle of all applications undergoing concurrent review under sub. (1), if it finds that completing reviews within the cycle specified in sub. (7) is not feasible due to the volume of applications received from any planning area.

(9) Request for hearing.

(a) An adversely affected applicant or HSA may file a written request for a public hearing under s. DHS 122.08 within 10 days after the date of the department’s initial finding under sub. (7). A hearing request is filed when it is received by the department. If no request for a hearing is made, or if a request is received after the 10-day limit, the department’s initial finding shall be the department’s final decision. Except as provided in par. (b), a timely request for hearing from an applicant undergoing concurrent review shall preclude issuance of an approval for a competing concurrent application until a final decision is issued by the secretary or a designee. Hearings shall be held in the manner prescribed in s. DHS 122.08.

(b) When an applicant for conversion to an FDD under s. DHS 122.02 (2) (a) or (c) who has undergone concurrent review files a timely request for a hearing under s. DHS 122.08 on the initial finding, the department shall issue approvals for the competing concurrent applications that were initially approved but only for the number of beds that exceeds the number proposed by the applicant or applicants requesting a hearing. Approvals shall be issued in order beginning with the application which received the lowest score under s. DHS 122.07 (2) (am).

(10) Expedited review.

(a) Conditions for expedited review. An application submitted under sub. (2) is subject to the requirements of this subsection rather than subs. (4m) (b), (5) (b) and (c) and (6) to (9) if:

1. The project does not increase the bed capacity of or totally replace an existing nursing home and the project was developed pursuant to a department-approved plan of correction to remedy code-related physical plant deficiencies. Applications submitted to correct code violations shall provide evidence of the violations and approved plan of correction and shall not go beyond what is necessary to correct those deficiencies; or

2. The application concerns a cost overrun on a previously approved project.

(b) Timing of application. An application under par. (a) may be submitted at any time on forms prescribed by the department provided that at least 30 days notice has been given to the department of a person’s intent to submit the application and the applicant has received written authorization from the department to submit the application.

(c) Review period. Applications which are subject to this subsection shall be reviewed by the department within 60 days of receipt of a complete application.

(d) Completeness.

1. The department shall have 5 working days to determine if the application is complete and, if incomplete, to issue a request for additional information to the applicant. An incomplete application is one in which:

a. The applicant has failed to provide requested information;

b. The information is illegible or unreadable in the form submitted; or

c. The application contains information contradicted or unjustified by other materials in the application.

2. Applications that were originally declared incomplete shall be declared complete on the date of receipt of all additional information requested by the department.

(e) Meeting: No public meeting is required on any project submitted under this subsection.

(f) Department’s initial finding. The department shall issue its initial finding to approve or reject the application within 60 days following receipt of a complete application. The initial finding shall be based on the criteria specified in s. DHS 122.07.

(g) Hearing. An adversely affected applicant shall have 10 days after the date of the initial finding to file a written request for a public hearing to challenge the initial finding on an application. Public hearings shall be held in the manner specified in s. DHS 122.08. If no requests for a hearing are made or if they are received after the 10-day limit, the initial finding becomes the department’s final action.

History: Cr. Register, March, 1985, No. 351, eff. 4-1-85; emerg. cr. (1) (c), eff. 1-1-87; emerg. cr. (1) (c), am. (9), eff. 5-31-87; cr. (1) (c), (7) (c) and (9) (b), am. (7) (a), renum. (9) to be (9) (a) and am., Register, October, 1987, No. 382, eff. 11-1-87; emerg. cr. (1) (d), eff. 10-1-88; emerg. cr. (1m) eff. 7-1-89; emerg. cr. (1r), eff. 9-21-90; am. (1) (a) 1. a. to d., (3), (4) (a), (b), (c) (intro.), (d) 1. intro., 2. and 5., (7) (a), (8), (9) (a), (10) (a) (intro.), (b) (d) 1. intro. and (10) (g), r. and recr. (2) and (10) (e), r. (6) (a) and (c), renum. (5) and (6) (b) to be (5) (a) and (6) and am., cr. (1) (c) 3. to 6., (4m), (5) (b) and (c), Register, January, 1991, No. 421, eff. 2-1-91; emerg. cr. (1) (d), eff. 5-11-93; cr. (1) (d), Register, January, 1994, No. 457, eff. 2-1-94; emerg. am. (2), (4) (a), (d) 1. (intro.) and 5., (5) (a), (6), cr. (3m), eff. 11-29-95; am. (2), (4) (a), (d) 1. (intro.), 5., (5) (a) and (6), cr. (3m), Register, May, 1996, No. 485, eff. 6-1-96; corrections in (1) (d) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register January 2009 No. 637.

DHS 122.07 Review criteria and selection process.

(1) Review criteria. The department shall use the criteria set out in this subsection in its review of all applications for project approval. Cost containment shall be the first priority in applying these criteria. The department may not approve a project unless the applicant has demonstrated that:

(a) The project is consistent with the state health plan and other long-term care support plans developed by the department.

(b) Medical assistance funds appropriated are sufficient to reimburse the applicant for providing nursing home or FDD care.

(c) The cost of renovating or replacing the facility or adding new beds is consistent with the cost of similar nursing home or FDD projects recently approved by the department and is reasonable based on independent analyses using industry-recognized cost-estimating techniques, and:

1. The proposed cost per bed for total facility replacement or for new facilities and beds does not exceed the following per bed cost expressed in the formula for nursing homes and FDDs, that C is less than or equal to 1.4 (S) (F).

a. “C” in this formula means maximum cost per bed using the capitalized project costs, including site improvements, buildings, fixed equipment, interest during construction and professional and financing fees, calculated to the midpoint of construction.

b. “S” equals $31,000.

Note: $31,000 is the statewide cost per bed for the base year 1983.

c. “F” in this formula means inflation factor.

Note: The department uses the inflation estimates published in Engineering News Record’s Building Cost Index.

2. The proposed equivalent cost per bed for renovation and partial replacement projects does not exceed the per bed cost as expressed in the formulae for nursing homes and FDDs, that Ce is less than

a. “Ce” in this formula means the maximum equivalent per bed cost, calculated as follows:

b. “S” and “F” in this formula are as defined in subd. 1.

Note: The maximum capital allowances calculated pursuant to par. (c) are not to be used by applicants as the expected cost of projects. Applicants are encouraged to seek less costly alternatives to the state maximums and all applications will have to meet all review criteria before undergoing the selection process in sub. (2).

(d) The project represents the most cost-effective, reasonable and feasible alternative for renovation or replacement of a facility, for the addition of beds to a facility or for the construction of a new facility.

1. The applicant shall provide an analysis which clearly defines all other reasonable alternatives such as:

a. Variations in functional program;

b. Renovation instead of replacement;

c. Reductions in bed capacity;

d. Variations in facility design; and

e. Variations in methods or materials of construction.

2. The analysis shall include an evaluation of the existing physical plant.

3. The analysis shall include a life-cycle cost analysis for each alternative studied, using forms provided by the department. In this subsection “life cycle” means the number of years for which alternatives are compared, and “life-cycle cost” means all relevant costs associated with a project during the project’s defined life cycle.

Note: Copies of the life-cycle cost analysis form are included in the application materials. They may be obtained from the Resource Allocation Program, Division of Health Care Access and Accountability, P.O. Box 309, Madison, Wisconsin 53701.

4. The department may independently develop its own alternatives to compare with those developed by the applicant.

(e) A need for additional beds exists in the planning area in which the project would be located. No new beds may be approved in any planning area if their addition would exceed the planning area’s adjusted allocation, calculated pursuant to s. DHS 122.05.

(f) The project is consistent with local plans for developing community-based long-term care services. These plans shall include those developed by local units of government.

(g) Necessary health care personnel, and capital and operating funds for provision of the proposed nursing home services are available, as follows:

1. The project will meet minimum staffing and financial requirements developed by the department pursuant to ch. DHS 132 or 134;

2. The facility will be located to assure reasonable access to nursing staff, emergency medical care, physician coverage, acute care services and ancillary services; and

3. Sufficient cash resources and cash flow exist to pay operating and initial start-up costs.

(h) The project is financially feasible, capable of being undertaken within one year of approval and completed within a reasonable period of time beyond the one-year approval period, as evidenced by:

1. The applicant’s demonstration of ability to secure adequate funds to finance the project. The applicant shall have adequate capacity to incur the debt associated with the project. Applicants shall have the ability to pay long-term debt through their present and future cash flow and profitability positions;

2. The availability of financing at average or below market rates for the class of home during the period of validity of the approval. Classes of homes are governmental, proprietary and nonprofit. Projects relying on sources of financing which historically take longer to process than the period of validity of an approval shall be rejected unless there is clear and definite proof supplied by the applicant that the funding source will be able to make adequate funds available within the period of validity of the approval; and

3. The reasonableness and attainability of the applicant’s construction schedule.

(i) Appropriate alternative methods for providing nursing home or FDD care are unavailable in the planning area. Alternative methods shall be deemed unavailable if the project is consistent with long-term care initiatives developed by the department.

(j) The existing and proposed quality of care is satisfactory, as determined by:

1. The department’s investigations. No approvals may be granted to any person who owns or operates a facility with one or more uncorrected class A or class B violations unless the project is specifically designed to remedy those violations, or to any person who owns or operates a facility against which a medical assistance or medicare decertification action is pending;

2. The department’s review of materials submitted by the applicant, which may include an independent performance evaluation of an existing facility, an evaluation of other homes owned and operated by an applicant seeking approval for a new facility, and patient satisfaction surveys, where available;

3. Recommendations or comments from affected parties regarding the quality of care in facilities owned and operated by the applicant; and

4. For applications proposing replacement or relocation of beds, approval by the department of a plan for the placement or relocation of persons residing in those beds, based on the census of the FDD or other nursing home at the time of submission of the application.

(k) The project is consistent with all applicable federal, state and local licensing, physical plant, zoning and environmental laws.

(L) Applications for renovation proposals, replacement facilities and capital expenditures over $600,000 which do not affect bed capacity and which meet all criteria in sub. (1) shall be approved unless the per diem rates proposed as a result of the project are inconsistent with those of similar FDD or other nursing home projects recently approved by the department.

(1m) Review criteria for conversion of a nursing home to an FDD. The department shall use the criteria in sub. (1) and the additional criteria in this subsection in its review of all applications for conversion of a nursing home to an FDD under s. DHS 122.02 (2) (a) and (c). The department shall solicit the comments of county departments organized under s. 46.23, 51.42, or 51.437, Stats., on all of these applications. The department shall not approve an application subject to this subsection unless the applicant has demonstrated that:

(a) The proposed per diem rates for the FDD are consistent with those of similar facilities for developmentally disabled persons;

(b) The applicant has experience in providing active treatment as defined in 42 CFR 435.1099 and the department has approved the applicant’s program statement under s. DHS 132.51 (3);

(c) Conversion of some beds within a non-FDD nursing home to FDD beds will result in a physically separate unit of the facility, which may be a ward, contiguous wards, a wing, a floor or a building, and which is separately staffed;

(d) Staff will be efficiently deployed in the FDD part of the facility and in the nursing home part of the facility, as well as in the facility as a whole;

(e) The FDD will have a minimum of 16 beds for developmentally disabled persons; and

(f)

1. A number of developmentally disabled residents sufficient to fill the requested beds currently reside in the facility and require active treatment; and

2. If the applicant proposes more beds than it has residents under par. (f), that county departments organized under s. 46.23, 51.42 or 51.437, Stats., identify persons who need placement in an FDD and give assurances that these persons will be placed in that facility.

(1r) Additional review criteria for conversion of an FDD to a nursing home. The department shall use the applicable criteria in sub. (1) and the additional criteria in this subsection in its review of an application under s. DHS 122.02 (2) (b) and s. 150.21 (5), Stats., for the total conversion of an FDD under ch. DHS 134 to be a nursing home under ch. DHS 132. The department shall not approve an application subject to this subsection unless the applicant demonstrates that:

(a) The proposed per diem rates for the nursing home are consistent with those of similar facilities;

(b) There will remain in the health planning area in which the applicant FDD is located sufficient FDD beds to serve the population of persons with developmental disabilities, including any residents of the converting facility who need to remain in an FDD;

(c) There are other adequate and appropriate resources available in the county or counties served by the facility being converted for relocating its residents as determined by the applicable county department or departments organized under s. 46.23, 51.42 or 51.437, Stats.; and

(d) The facility, in conjunction with the applicable county department or departments organized under s. 46.23, 51.42, or 51.437, Stats., has developed a preliminary relocation plan under s. 50.03 (14) (c) 8., Stats., for each resident which is acceptable to the county department or departments and addresses the needs and concerns of the resident or the resident’s guardian.

(1t) Review criteria for nursing home design pilot projects. The department, in its review of all applications under s. DHS 122.06 (3m) for nursing home design pilot projects, shall use the criteria in sub. (1), with the exception of sub. (1) (c) and (d), and the additional criteria in this subsection. The department may approve no more than 3 projects subject to this subsection. An applicant shall do each of the following:

(a) Document a significant departure from traditional nursing home design;

(b) Document through pilot research or sound academic theory that:

1. The new nursing home design improves the quality of life and care of nursing home residents;

2. The new nursing home design improves productivity of nursing home staff; and

3. There is a need for additional research;

(c) Utilize a minimum of 30 existing nursing facility beds for the research and a comparable control group of nursing facility beds in the traditional nursing home setting within the same licensed facility;

(d) Submit a copy of the written research proposal which documents that the proposal:

1. Has been prepared in conjunction with an established independent research organization; and