Were Maryland nursing homes covered by the Health-General Article's resident protections, and did the Health Services Cost Review Commission approve nursing home rates?

Plain-English summary

A member of the House of Delegates asked the Attorney General two questions about how Maryland health law treated nursing homes in 1990. First, did the term "facility" in HG §19-343(a) of the Health-General Article include nursing homes, which determined whether nursing home residents received the protections of HG §§19-344 and 19-345? Second, did the Health Services Cost Review Commission, the state body that reviewed and approved health care rates, have rate approval jurisdiction over comprehensive care facilities and extended care facilities?

On the first question, the answer was yes. "Facility" meant a related institution that under Department of Health and Mental Hygiene regulations was a comprehensive care facility or an extended care facility, and the statutory definition of "related institution" plainly covered institutions providing nursing care for two or more unrelated individuals with overnight care. The regulatory definition of "comprehensive care facility" described nursing homes and had always been applied to them administratively. The opinion called the inclusion of nursing homes "beyond doubt" and affirmed earlier advice to the same effect.

On the second question, the answer was no. The Commission's enabling statute originally reached related institutions as well as hospitals, but the General Assembly repeatedly deferred that jurisdiction, and in 1977 it barred the Commission from setting rates for related institutions until two things happened: state law authorized the Medicaid program to reimburse related institutions at Commission rates, and the federal government agreed to accept Commission rates for federal financial participation. Those preconditions, carried forward into HG §19-209(b), had never been satisfied, so comprehensive care facilities remained outside the Commission's rate approval in practice. Extended care facilities were even further outside it: a 1984 law removed them from the definition of "related institution" entirely.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did nursing home residents get the protections written for residents of a "facility"?
Yes. Under this 1990 opinion, nursing homes fell within the definition of "facility" in HG §19-343(a), so the protections of HG §§19-344 and 19-345, which are framed as protections for "a resident of a facility," reached nursing home residents.

Did Maryland's rate commission approve nursing home rates in 1990?
No. The Health Services Cost Review Commission had jurisdiction on paper over related institutions, but HG §19-209(b) barred it from setting their rates until state law authorized Medicaid to reimburse at Commission rates and the federal government agreed to accept them. Neither condition had been met, so the Commission did not set rates for comprehensive care facilities.

Why were extended care facilities treated differently from comprehensive care facilities?
Because the General Assembly removed them from the statute. Chapter 370 of the Laws of Maryland 1984 amended the definition of "related institution" to cover only a comprehensive care facility already regulated by the Commission and to exclude extended care facilities, so they were simply outside the Commission's jurisdiction.

Was a nursing home the same thing as a comprehensive care facility under the regulations?
Effectively yes, for these purposes. The regulatory definition described a facility admitting patients suffering from disease, disabilities, or advanced age who require medical and nursing service under a registered nurse's supervision, and the opinion said it "describes nursing homes and has always been construed administratively as so applying."

Background and statutory framework

The Health Services Cost Review Commission was created by Chapter 627, Laws of Maryland 1971, with jurisdiction over hospitals, health care, and related institutions ("related institutions" then included nursing homes and care homes under former Article 43, §556(d) and (e)). The Commission was to assure purchasers of the reasonableness of rates starting July 1, 1974. Chapter 306, Laws of Maryland 1973 drew the first line between hospitals and related institutions, delaying Commission jurisdiction over related institutions until July 1, 1975. In 1977, Chapter 760 itemized the related institutions subject to the Commission, including extended care facilities, while Chapter 705 added the critical restriction: no Commission rate-setting for related institutions until Medicaid reimbursement at Commission rates was authorized by state law and accepted by the federal government. A 1980 Attorney General opinion, 65 Opinions of the Attorney General 247, read that restriction as clearly limiting the Commission's ability to set related-institution rates.

When the Health-General Article was adopted in 1982, the Revisor carried the scheme forward: general jurisdiction over hospital services in HG §19-209(a)(1), the two-part precondition in HG §19-209(b), and a definition of "related institution" in former HG §19-201(d). Chapter 370 of the Laws of Maryland 1984 then narrowed "related institution" to a comprehensive care facility currently regulated by the Commission, expressly excluding extended care facilities. On the resident-protection side, HG §19-343(a) defined "facility" as a related institution that is a comprehensive care facility or extended care facility under departmental regulations; the definitions of "related institution" in HG §19-301(1), the classification of nursing homes in HG §19-307, and the regulatory definition of comprehensive care facility in COMAR 10.07.02.01F brought nursing homes squarely within it.

Citations and references

Statutes and regulations:

• HG §19-343(a) (definition of "facility"), HG §§19-344 and 19-345 (resident protections), HG §19-301(1) (definition of "related institution"), HG §19-307 (classification of care homes and nursing homes)
• HG §19-209 (Commission jurisdiction), including HG §19-209(a)(1) and the rate-setting preconditions of HG §19-209(b); HG §19-201(e) (definition of "related institution" for Commission purposes)
• Former Article 43, §§568-1, 568H, 568U (the Commission's original enabling law); former Article 43, §556(d) and (e)
• Chapter 627, Laws of Maryland 1971; Chapter 306, Laws of Maryland 1973; Chapters 760 and 705, Laws of Maryland 1977; Chapter 370 of the Laws of Maryland 1984
• COMAR 10.07.02.01F (comprehensive care facility), COMAR 10.09.10.01A(8) (Medicaid definition), COMAR 10.07.02.01J (extended care facility)

Related AG opinion: 65 Opinions of the Attorney General 247 (1980)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1990/Volume75_1990.pdf (this opinion appears at printed pages 235-240 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

HEALTH

Health Services Cost Review Commission — Nursing Homes — Rate Approval

June 12, 1990

The Honorable John C. Astle
Maryland House of Delegates

You have requested our opinion about the following questions:

1. Whether nursing homes are included within the definition of "facility" in §19-343(a) of the Health-General Article ("HG" Article); and

    2. Whether comprehensive care facilities or extended care facilities are within the rate approval jurisdiction of the Health Services Cost Review Commission.

For the reasons stated below, we conclude as follows:

1. Nursing homes are included in the definition of "facility" in HG §19-343(a).

2. Comprehensive care facilities and extended care facilities are not within the rate approval jurisdiction of the Health Services Cost Review Commission.

I

Definition of "Facility"

 The crux of your first question is whether residents of nursing homes are entitled to the protections afforded by HG §§19-344 and 19-345, which are framed in terms of protections for "a resident of a facility." See HG §§19-344(a) and 19-345(a). For purposes of these sections, "'facility' means a related institution that, under the rules and regulations of the Department [of Health and Mental Hygiene] is a comprehensive care facility or an extended care facility." HG §19-343(a).

Although this definition does not use the phrase "nursing home," the definition of "related institution" encompasses nursing homes:

           "Related institution" means an organized institution, environment, or home that:

          (i) Maintains conditions or facilities and equipment to provide domiciliary, personal, or nursing care for two or more unrelated individuals who are dependent on the administrator, operator, or proprietor for nursing care or the subsistence of daily living in a safe, sanitary and healthful environment; and

         (ii) Admits or retains the individuals for overnight care.

HG §19-301(1). Moreover, HG §19-307 classifies related institutions as either "care homes" or "nursing homes." Finally, the regulatory definition of "comprehensive care facility" describes nursing homes and has always been construed administratively as so applying: "'Comprehensive care facility' means a facility which admits patients suffering from disease or disabilities or advanced age, requiring medical service and nursing service rendered by or under the supervision of a registered nurse." COMAR 10.07.02.01F.

In sum, we believe it to be beyond doubt that the term "facility" in HG §19-343(a) includes nursing homes.1

II

Jurisdiction of the Health Services Cost Review Commission

A. Legislative History

The statute creating the Commission gave it jurisdiction over "all hospitals, health care and related institutions ...." Former Article 43, §568-1, enacted by Chapter 627, Laws of Maryland 1971.2 In particular, the Commission was, as of July 1, 1974, "to assure all purchasers of health care institutional services" of the reasonableness of rates at both hospitals and related institutions.3 Former Article 43, §568H b. "In order to properly discharge these obligations, the Commission shall have full power to review and approve the reasonableness of rates established or requested by any institution subject to the provisions of this subtitle." Former Article 43, §568U.

In 1973, the General Assembly drew the first distinction between hospitals and related institutions in this statute. Chapter 306, Laws of Maryland 1973. In the provisions quoted above, the term "hospital" was inserted in lieu of the term "institutional" and "institution," and corresponding changes were made elsewhere in former §§568H b and 568U.4 But the 1973 legislation also provided that the Commission's rate approval jurisdiction would "apply to related institutions ... from and after July 1, 1975." Former Article 43, §§568H c and 568U(d). Thus, the General Assembly delayed, but did not eliminate, the exercise of the Commission's jurisdiction over related institutions.

 In 1977, the General Assembly amended former §568H to itemize the types of related institutions over which the Commission had jurisdiction, including extended care facilities. Chapter 760, Laws of Maryland 1977.5

 That same year, however, the General Assembly added to former §568U(d) the following language: "[T]he Commission may not set rates [for related institutions] until State law authorizes the medical assistance program of the Department of Health and Mental Hygiene to reimburse at the Commission rates, and until the [federal government] has agreed to accept the Commission rates as a method of providing federal financial participation to the State's medical assistance program." Chapter 705, Laws of Maryland 1977. The Attorney General characterized this provision as "clearly limit[ing] the [Commission's] ability to set rates for related institutions. Until such time as the statute is changed or Medicaid adopts regulations accepting [the Commission's] rates for nursing homes, [the Commission] may not set a rate for related institutions." 65 Opinions of the Attorney General 247, 253 (1980).

 When the Health-General Article was adopted in 1982, the Revisor included a definition of "related institution" that included the then-current classifications: "'Related institution' means ... (i) [a]n extended care facility; (ii) [a]n intermediate care facility; or (iii) [a]n intermediate care facility — mental retardation." See Revisor's Note to former HG §19-201(d) (1982).

 Finally, in Chapter 370 of the Laws of Maryland 1984, the General Assembly amended this definition of "related institution." The bill's title stated that it was for the purpose of "altering the definition of a 'related institution' ... by restricting the term to refer to a certain comprehensive care facility that is presently regulated by the Commission; and excluding an extended care facility from the definition of a 'related institution'."

B. Current Provisions

 The rate approval jurisdiction of the Health Services Cost Review Commission is set out in HG §19-209. In general, "the Commission has jurisdiction over hospital services offered by or through all facilities." HG §19-209(a)(1). The statute then sets out the following restriction:

     The Commission may not set rates for related institutions until:

         (1) State law authorizes the State Medical Assistance Program to reimburse related institutions at Commission rates; and

          (2) The United States Department of Health and Human Services agrees to accept Commission rates as a method of providing federal financial participation in the State Medical Assistance Program.

HG §19-209(b). See also COMAR 10.37.11.021.

 The term "related institution," for purposes of the Commission's jurisdiction, includes "[a] comprehensive care facility that is currently regulated by the Commission." HG §19-201(e)(1)(i).6 However, because "State law" does not "authoriz[e] the State Medical Assistance Program to reimburse related institutions at Commission rates," comprehensive care facilities are not presently within the rate approval jurisdiction of the Commission. See 65 Opinions of the Attorney General at 253. See also Revisor's Note to HG §19-209 (1982).

 Extended care facilities are not within the definition of "related institutions" in HG §19-201(e).7 Indeed, as discussed in Part IIA above, the General Assembly specifically removed them from the definition. Therefore, they are not subject to the Commission's jurisdiction.

III

Conclusion

In summary, it is our opinion that:

1. Nursing homes are included in the definition of "facility" in HG §19-343(a).

2. Comprehensive care facilities and extended care facilities are not within the rate approval jurisdiction of the Health Services Cost Review Commission.

                                           Very truly yours,

                                           J. Joseph Curran, Jr.
                                           Attorney General

                                           Jack Schwartz
                                           Chief Counsel
                                             Opinions & Advice

1
Hence, we affirm the advice rendered to you by Assistant Attorney General Kathryn M. Rowe on December 18, 1989.

2
"Related institutions" included "nursing homes" and "care homes." Former Article 43, §556(d) and (e).

3
In full, this provision read:

      After July 1, 1974, an additional responsibility of this Commission is to assure all purchasers of health care institutional services that the total costs of the institution are reasonably related to the total services offered by the institution; that the institution's aggregate rates are set in reasonable relationship to the institution's aggregate costs; and that rates are set equitably among all purchasers of services without undue discrimination.

4
With this change, the statement of legislative intent in §568H b spoke of the Commission's responsibility "to assure all purchasers of health care hospital services that the total costs of the hospital are reasonably related to the total services offered by the hospital; that the hospital's aggregate rates are set in reasonable relationship to the hospital's aggregate costs; and that the rates are set equitably among all purchasers of services without undue discrimination." The corresponding grant of rate approval authority, §568U(b), vested in the Commission "full power to review and approve the reasonableness of rates established or requested by any hospital subject to the provisions of this subtitle."

5
As a result of this legislation, the Commission's jurisdiction was limited to "institutions that are licensed as nursing homes — extended care, intermediate care facilities — long-term care (Type A), or intermediate care facilities — personal care (Type B) or intermediate care facilities — mental retardation...." Former §568H(3). See 65 Opinions of the Attorney General 247, 251 (1980).

6
Under the regulations of the Medical Assistance Program, "comprehensive care facility" is defined as "a nursing facility licensed pursuant to COMAR 10.07.02." COMAR 10.09.10.01A(8). Under the licensing regulations, in turn, "comprehensive care facility" is defined as "a facility which admits patients suffering from disease or disabilities or advanced age, requiring medical service and nursing service rendered by or under the supervision of a registered nurse." COMAR 10.07.02.01F.

7
An extended care facility is defined in COMAR 10.07.02.01J. It is a "related institution" for licensing and other purposes.