1. (a) Bed need will be determined by a population-based methodology and a utilization-based methodology.

2. (b) Population-based.

   1. (1) Numerical formula.

      1. (A)

3. (i) At ninety percent (90%) optimum occupancy the following number of RCF beds are projected by age group: Age Group Beds per 1000

   Under 65	.5545
   65-74	2.3014
   75-84	5.1090
   85+	17.4996

   1. (ii) Bed need will be projected five (5) years forward each July 1, e.g., in 2003 bed need will be projected for the year 2008.

      1. (B)

         1. (i) An exception to the population-based formula exists when occupied beds in all facilities in a county are seventy-five percent (75%) occupied by residents who are documented to be under the age of sixty-five (65) years of age.
         2. (ii) In this instance, beds in those facilities will not be counted in the county bed need.

   2. (2) Review priorities. Applicants will be approved in the following ranked order:

      1. (A)

         1. (i) Applicants with high occupancy will have a priority for an increase of ten percent (10%) or ten (10) beds whichever is greater.
         2. (ii) For definition of "high" see subsection (c)(2)(B) of this section, Utilization based, below;
      2. (B) Applicants replacing older facilities will have a priority for a twenty percent (20%) increase;

      3. (C)

         1. (i) Applicants wanting to expand will have a priority for an increase of five percent (5%) or five (5) beds whichever is greater.
         2. (ii) The above priorities may not be combined i.e., an older facility with high occupancy will be eligible for either a ten percent (10%) or a ten-bed increase or a twenty percent (20%) increase but not both.
         3. (iii) No additional beds will be approved for a county showing a need under the population-based methodology where:
4. (a) (a) There is a valid permit of approval for the first RCF in the county which has yet to be licensed; or

5. (b)

   1. (1) (b)(1) If the county has had its first and only RCF licensed within the last calendar year.
   2. (2) (2) After the initial RCF has been licensed for six (6) months, the Health Services Permit Commission will review the situation and determine if additional beds will be approved for the county.

   3. (3) The commission may exceed need, when a need exists and is less than ten (10) beds in order to approve one (1) applicant for up to a ten-bed facility.

      1. (c) Utilization based.
   4. (1) This methodology would apply in those service areas where a population-based need is not projected.

   5. (2)

      1. (A) Beds may be approved if a facility has had a high occupancy for the previous calendar year.
      2. (B) High occupancy shall be at least an average of eighty-five percent (85%) for facilities of ten (10) beds or less, ninety percent (90%) for facilities of twenty (20) beds or less, and ninety-five percent (95%) for facilities over twenty (20) beds.

   6. (3)

      1. (A) Proof of occupancy will be based upon resident occupancy.

      2. (B) Proof of occupancy is:

         1. (i) Derived from the Department of Human Services, Office of Long-Term Care occupancy reported at the last two (2) site visits; and
         2. (ii) Is averaged with the occupancy reported on the site visit conducted by the Health Services Permit Agency.
      3. (C) Occupancy is defined as including any individual for whom the facility has agreed to provide room or board, or services or assistance, regardless of whether they are physically present at the time the occupancy is counted.

   7. (4) Eligible applicants may be approved for a ten bed increase.

      1. (d) Unfavorable review. No residential care facility will be awarded a permit of approval if the existing facility has had more than two (2) Class A or Class B violations pursuant to Arkansas Code § 20-10-205 in any inspection within the last twelve (12) months preceding the date the application is placed under review or from the date the application is placed under review until the final decision of the commission.

Codification Notes: "RCF" means residential care facility.