55 Pa. Code § 1181.504 – Background.

(a) In 1987, Congress enacted major nursing home reform legislation affecting providers participating in the Medicare and Medical Assistance Programs as part of OBRA-87. Congress made some technical amendments to OBRA-87 in Title IV, Subtitle B of the Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360, 102 Stat. 768) (July 1, 1988). The nursing home reform provisions affecting the Medical Assistance Program are codified at 42 U.S.C.A. § 1396r, as part of Title XIX of the Social Security Act.
(b) The nursing home reform provisions enacted by Congress establish a timetable for action by Federal and state agencies, as well as by providers, from 1987 through 1993, including requirements for continuing approval of State plans. In a number of cases, state agencies are required to take action even where Federal guidelines required by the law are not timely promulgated. The reform provisions grew out of concerns that the preexisting system of certification and review of participating providers did not adequately deal with the quality of patient care and did not sufficiently inform patients and providers of rights and limitations. While most of the new requirements established by OBRA-87 do not become effective until October 1, 1990, some are required to be implemented prior to that date.
(c) Since the enactment of OBRA-87, the Department in cooperation with the Departments of Aging, Education, Health and State and the Governor’s Budget Office and Office of Policy, as well as with the responsible Federal agencies and representatives of providers and recipients, has been conducting planning and development activities necessary for the implementation of OBRA-87. These activities are part of a program of change to improve the quality of care provided in nursing facilities, to provide quality services in the most appropriate setting and to increase public awareness of rights and limitations under the Medical Assistance Program. The Department is the single State agency for the administration of the Medical Assistance Program in this Commonwealth and is therefore responsible for issuing information and regulations with respect to the application of OBRA-87 to the Medical Assistance Program.
(d) OBRA-87 requires the Department to implement certain provisions of the law on January 1, 1989. These provisions are:
1. (1) Specification of nurse aide training and competency evaluation programs and those competency evaluation programs that the Department approves for use by providers and that meet requirements established by the law. See 42 U.S.C.A. § 1396r(e)(1)(A).
2. (2) Establishment of a registry of individuals who satisfactorily complete a nurse aide training and competency evaluation program or a nurse aide competency evaluation program approved by the Department. See 42 U.S.C.A. § 1396r(e)(2).
3. (3) Implementation of a preadmission screening program, applicable to persons seeking admission to a provider nursing facility, whether or not that person is applying for or receiving Medical Assistance, to determine, based on criteria established by the Federal government under OBRA-87, whether persons who are mentally ill or are mentally retarded or have related disabilities require nursing facility services and, if they do, whether they also require active treatment for their condition. See 42 U.S.C.A. § 1396r(e)(7)(A).
4. (4) Implementation of an appeals process for individuals who are adversely affected by the preadmission screening program and wish to seek relief. See 42 U.S.C.A. § 1396r(e)(7)(F).
5. (5) Enforcement of conditions of participation established by OBRA-87 and effective for current nursing facility providers.
(e) The Department currently has regulations with respect to provider facilities in this chapter. The regulations require participating providers to abide by applicable Federal and State laws and regulations, including Title XIX of the Social Security Act (42 U.S.C.A. § § 1396—1396s) and to conform with requirements of Title XIX and of the regulations promulgated thereunder which are necessary for the Department to qualify for Federal Financial Participation (FFP) with respect to their participation. See § 1181.41(3) (relating to provider participation requirements). The regulations require provider facilities to comply with the requirements for provider facilities added by OBRA-87 to Title XIX. The Department also has regulations with respect to appeals procedures for persons applying for or receiving Medical Assistance benefits in Chapter 275 (relating to appeal and fair hearing and administrative disqualification hearings), as well as for others. See 1 Pa. Code Part II (relating to general rules of administrative practice and procedure).