Motion — Oregon Department of Human Resources v. Coos Bay Care Center
Supreme Court brief1987
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No. 86-1419 — SER 111987
. F. SPANIOL, JR
CLERK
in the Supreme Court
of the United States
OCTOBER TERM, 1987
STATE OF OREGON, DEPARTMENT
OF HUMAN RESOURCES;
RICHARD C. LADD,
Petitioners,
Vv.
COOS BAY CARE CENTER, an Oregon
Corporation, Guardian Ad Litem;
HANNAH SCHWANKE, Guardian Ad Litem
for David and Steven Schwanke;
and SANDY MAUER, Guardian Ad Litem
for Tami Mauer,
Respondents.
On Writ of Certiorari
to the United States Court of Appeals
for the Ninth Circuit
RESPONSE IN
OPPOSITION TO MOTION TO DISMISS
DAVE FROHNMAYER
Attorney General of Oregon
WILLIAM F. GARY
Deputy Attorney General
*VIRGINIA L. LINDER
Solicitor General
400 Justice Building
Salem, Oregon 97310
Phone: (503) 378-4402
Counsel for Petitioners
*Counsel of Record
RE I TE a ED, PEE Ta a CIDE TS
QUESTIONS PRESENTED
1. Whether change of a Medicaid provider’s corporate
owner moots litigation seeking both retroactive and prospec-
tive reimbursement relief when: (1) the claim for retroactive
relief remains viable, although the plaintiff chooses to reverse
positions on the claim; (2) the new corporate owner operates
the same provider facility and is entitled to Medicaid reim-
bursement pursuant to a Medicaid provider agreement and
“heavy care” addendum that are identical to those that are the
subject of the litigation; (3) under federal law, the new
corporate owner is assigned the former owner’s provider
status to ensure uninterrupted Medicaid benefits; and (4) the
claims of the named plaintiff patients and putative class
members are unaffected by the transfer of interest.
2. Whether this Court should dismiss the petition for
certiorari on the basis of arguments that do not bear on the
court’s jurisdiction and that, under Rules 23 and 35, properly
should have been but were not raised in opposition to the
petition.
TABLE OF CONTENTS
Page
ETRE EET SECRETE TTT Te i
Argument
I. The Controversy in This Case Is Not Moot ........ 1
II. None of the Other Arguments Advanced by
CBCC Inc. are Properly Raised ................. 14
ee eda crac doce ecu e se O68 e0e secon 14
ee Cia das ee usb bw ¥ 00 016.40 seen en wen App-1
EE a ae ee App-13
ill
TABLE OF AUTHORITIES
Page
Cases Cited
Carroll v. President and Commissioners of Princess
Pe Be Aes Re MOE kc oie venakes teuee nacre 10-11
City of Mesquite v. Alladdin’s Castle, Inc., 455 U.S. 283
CE okies dea RRNSwn See CEE ane the haceenen se chan ke 7
De Veau v. Braisted, 363 U.S. 144 (1960) ..............2045- 11
Gatling v. Butler, 52 F.R.D. 389 (D. Conn. 1971) ............. 13
NLRB v. Insurance Agents’ International Union, AFL-
Ce ee Ete, UE MER cae dedeeteneiésessesewes 3-4,11
United States Parole Commission v. Geraghty, 445 U.S.
DR sooo eae eae tu aese sea ke ieee 13
Washington v. Wyman, 54 F.R.D. 266 (S.D. N.Y. 1971) ....... 13
Administrative Regulations
Ge SEES 6 on coca eek recdneedeeesioceesnaeeetaes 9
CL © Ue oe oink doce esc b ote eerssedsccrsteseesennes 9
Other Authorities
Federal Rule of Civil Procedure 25 ...........cccccccccccces 8
ee EE ss eck deh oehc v4 6a takuwmes Gh wee eee 14
By 8 errr rrr rere rer eT TL ee ee ee 14
iv
1
PETITIONERS’ RESPONSE IN OPPOSITION
TO RESPONDENTS’ MOTION TO DISMISS
Petitioners respectfully urge that the respondents’ motion
to dismiss the petition for writ of certiorari on grounds of
mootness be denied. Alternatively, if the Court is inclined to
find some merit in the motion, petitioners ask the court to
postpone a ruling on it until oral argument and consideration
on the merits. Finally, the nonjurisdictional grounds asserted
in support of the motion should be summarily rejected.
ARGUMENT
I. The Controversy in This Case Is Not Moot.
Plaintiffs in this case consist of the former corporate
owner of the Coos Bay Care Center, a Medicaid-certified
intermediate care facility, and three patients who have resided
or continue to reside there.! The patients and the former
owner have sued the state seeking damages for past Medicaid
reimbursement decisions that allegedly violated their federal
statutory and constitutional rights; and they seek prospective
declaratory and injunctive relief to require the state to reim-
burse at a higher level in the future. The patients sue both in
their individual capacity and as representatives of a putative
class of similarly situated patients at care homes throughout
the State of Oregon.
' For ease of reference, we refer to the patients themselves as plaintiffs,
although their interests in fact are represented through guardians ad
litem. David and Steven Gibbs, according to the state’s records, continue to
be patients at the Coos Bay Care Center facility, as implied but not expressly
acknowledged in footnote 2 of the motion to dismiss. Tami Watson, also
according to the state’s records, now resides in an intermediate care facility
in Medford, Oregon.
2
Coos Bay Care Center, Inc. (CBCC Inc.), without the
concurrence or the participation of the patient plaintiffs,”
moves to dismiss the petition for writ of certiorari on the
theory that this case is now moot. It relies on the fact that on
June 30, 1987, another entity, Southmark Corporation, pur-
chased CBCC Inc.’s interest in the Coos Bay Care Cen-
ter. CBCC Inc. indicates that, under the terms of the sale, it
retains its interest in retroactive relief (damages measured by
past under-reimbursement); but it now takes the position that
the Eleventh Amendment bars that remedy and it therefore is
not entitled to pursue the claim. As to prospective declaratory
and injunctive relief, CBCC Inc. urges that the sale termi-
nated any interest it may have had in future Medicaid reim-
bursement, thereby “mooting” the case.
Despite CBCC Inc.’s efforts to make it appear as though
factual changes have mooted this case, the underlying contro-
versy remains as vital as when the original complaint was
filed. The factual circumstances that gave rise to this lawsuit
are essentially unchanged. Coos Bay Care Center still is a
Medicaid-certified intermediate care facility. It still is provid-
ing care to Medicaid-eligible patients. The facility continues
in the same business, providing care to the same people. The
state continues to reimburse for that care pursuant to the
same base rate and heavy cost add-on rate policies and prac-
tices. Those policies and procedures continue to be applied to
intermediate care facilities and their patients throughout
Oregon. Nothing has changed except the beneficial
ownership of the Coos Bay Care Center.
? Respondent CBCC Inc. is careful in its motion to emphasize that it is
filed only on behalf of the corporate plaintiff. See Motion to Dismiss, p. 1, n.
1. Evidently, documents to substitute new counsel in representing Hannah
Schwanke (guardian ad litem for David and Steven Gibbs) are being pre-
pared. Jd. But counsel for CBCC Inc. does not indicate whether these
patients are expected to join in the motion. Apparently, Tami Watson is not
expected to be represented by new counsel.
3
CBCC Inc. builds its case for ““mootness” through a variety
of devices that do not demonstrate mootness at all. In fact,
the motion to dismiss and supporting materials are a trans-
parent attempt to call off an ongoing battle because, from the
respondent’s perspective, it is going badly. The very fact that
CBCC Inc. has committed substantial resources to its effort to
avoid an adverse precedent is compelling evidence that the
controversy that sparked this case is alive and well. In its
motion, CBCC Inc. concedes points on the merits that, before
the lower courts, it forcefully resisted. It characterizes the
patients’ claims in a way that contradicts the position it took
previously in this litigation, and in a way that simply is refuted
by the complaint’s express allegations. It ignores altogether
the complaint’s class action allegations and the interests of
the putative class and the plaintiff representatives. Neither
CBCC Inc. nor Southmark Corporation has availed itself of
simple procedures for substitution and joinder of parties that
are available. Instead, under the guise of ““mootness,” CBCC
Inc. is actually attempting to avoid this Court’s resolution of
an issue of unquestioned public importance® that continues to
have concrete significance to the provider, to the patients and
to the state.
As demonstrated below, this Court should not grant the
motion to dismiss. However, if the Court is inclined to find
some merit in the motion at this juncture, we urge the Court to
postpone its ruling. The posture of the case, given the variety
of plaintiff interests at stake, is sufficiently complex and the
factual ambiguities are sufficiently great that the Court
should consider the motion after oral argument and along
with the merits, as it has done in other cases. See, e.g., NLRB
3 The level of amicus interest and participation in this case amply dem-
onstrates the importance, to patients, providers and states alike, of a resolu-
tion of the issue presented.
4
v. Insurance Agents’ International Union, AFL-CIO, 361 U.S.
477, 500 n. 32 (1960).
A. Factual Background.
We do not question the basic factual information pre-
sented to the Court by CBCC inc. in the motion to dismiss and
the attached affidavits. As CBCC Inc. represents, it sold its
interests in the Coos Bay Care Center facility on June 30,
1987. Around mid-April, it and the purchaser, Southmark
Corporation, initiated the processes for relicensure and reis-
suance of the provider agreement to Southmark.‘ As we
understand it, although the transfer of interest did not occur
until the end of June, Southmark in fact assumed manage-
ment of the facility on April 1, four months before.
Under the terms of the sale agreement, CBCC Inc. retains
its interest in all accounts payable accruing prior to April 1,
1987. Amounts accruing after that time apparently are
Southmark’s. Thus, although CBCC Inc. argues that it alone
holds an interest in amounts owed to the care center during
the period of its ownership, that does not appear to be entirely
the case. Moreover, the agreement expressly provides that all
amounts owed by governmental agencies under governmental
reimbursement programs are first due to CBCC inc. with
respect to outstanding amounts due to it for each patient
covered by the payment and “thereafter to such amounts as
4In footnote 5 of the motion, CBCC Inc. suggests that “petitioners”
were notified of the intent to sell on several occasions, beginning in late
March. The ambiguous reference to “petitioners” suggests that perhaps the
Oregon Attorney General, shortly after filing the petition for certiorari in
this case, was so notified. That is not the case. CBCC Inc. notified the
client agency for the sole purpose of beginning the routine paperwork that
would result in transfer of the provider agreement to the new corporate
owner. As counsel for the agency in this litigation, we were not advised of the
transfer of interest until some time after the sale, while we were in the final
stages of preparation of our brief on the merits. We were then contacted by
new counsel for CBCC Inc. who informed us of the recent sale and the fact
that the representation was to be transferred to them. We received no for-
mal confirmation of those facts from either the present or former counsel
prior to the filing of the motion to dismiss.
5
are due to Purchaser.” (See verbatim portion of sale agree-
ment, quoted in Joint Affidavit, Motion to Dismiss at 7a).
In addition to the factual information discussed by CBCC
Inc. in its motion, there are further relevant facts apparent
from the information CBCC Inc. sets out and available
through the state’s records. It does not appear that there has
been any significant change in the care center’s business oper-
ations, its staff or its patients. The care center continues to be
a certified Medicaid provider. In fact, Southmark is operating
the facility pursuant to the certification obtained by CBCC
Inc. As discussed infra, it is entitled to do so pursuant to
federal regulations until that certification expires. In antic-
ipation of the transfer of ownership, Southmark sought
relicensing of the facility to carry on the same patient services
previously provided by CBCC Inc. As acknowledged by
CBCC Inc. (See Decker Affidavit at 12a), relicensing is a
routine, administrative matter upon transfer of
ownership. The state agency has issued to Southmark a pro-
vider agreement and heavy cost addendum that, in all material
respects, are identical to those previously issued to
CBCC.° These agreements are attached as Appendixes A and
B to this brief. The agreements differ only in that they sub-
stitute Southmark’s corporate ownership interests for those of
CBCC Inc. Southmark will be entitled to the same provider
rates as were applied to CBCC Inc. and the provider agree-
ment is dated so that it is in force for the full time period
remaining under CBCC Inc.’s agreement.
Two of the three patient plaintiffs and class represen-
tatives, David and Steven Gibbs, continue to reside in Coos
5 The provider agreement with Southmark actually was issued to “Coos
Bay Associates Limited Partnership.” See Appendix A. Southmark is
referred to in this brief instead of Coos Bay Associates because, as
respondents note in their motion, page 4, Southmark controls Coos Bay
Associates.
6
Bay Care Center. There is nothing in the state agency’s
records to suggest that their care needs or status have changed
in any way, and CBCC Inc. does not assert any change. The
state’s records further reflect, as CBCC Inc. points out
(Motion to Dismiss, n. 2), that Tami Watson no longer is a
patient at Coos Bay Care Center. However, she continues to
reside in an Oregon intermediate care facility certified as a
Medicaid provider. The facility operates under the same stan-
dard provider agreement and heavy cost addendum involved
in this lawsuit, and Tami Watson now is listed as a heavy cost-
eligible patient.
Finally, even the staff of the care home appears to have
remained largely the same. For example, Robert M. Decker
previously was Executive Vice President of Chartham Man-
agement, a company apparertly connected with and which
managed the facility for CBCC Inc. (See Decker and Pybee
Affidavits, Motion to Dismiss). On April 1, 1987, before the
transfer of interest but simultaneous with Southmark’s
assumption of the facility’s management, Robert Decker
became a Vice-President of National Heritage, Inc., the sub-
sidiary of Southmark that assumed (and retains) that man-
agement responsibility. Mr. Decker continues in that
capacity. (See Decker Affidavit, Motion to Dismiss at
10a-11a).
B. The Claims for Retrospective Relief.
The change in the care facility’s corporate ownership does
not even arguably extinguish any of the plaintiffs’ or the
putative classes’ interest in damages based on alleged under-
reimbursement. CBCC Inc. does not assert that the claims for
restrospective relief are moot. Instead, it takes the legal posi-
tion that the Eleventh Amendment bars a federal court from
awarding monetary damages out of a state’s treasury. Its
argument, however, confuses the question Of its entitlement to
relief with the question of whether a change of facual circum-
7
stances has eliminated the existence of a legally cognizable
controversy.
“Mootness” simply is the wrong analytic label. CBCC
Inc.’s position on the Eleventh Amendment question demon-
strates only that it no longer believes in the legal position that
it advanced before the lower courts in this case. Indeed, it
pressed the opposite argument at some iength before the
Ninth Circuit (Reply Br. at pp. 14-18), and pre-
vailed. Without even acknowledging the inconsistency
between its present and prior positions, it now reverses itself
and essentially concedes that the state is and was correct all
along. But the Eleventh Amendment issue goes to the merits
of whether the district court correctly dismissed the complaint
for failure to state a cause of action, and whether the Ninth
Circuit correctly reversed that judgment and remanded this
case for trial. The Eleventh Amendment thus goes to the
substantive question of the district court’s jurisdiction, rather
than to this Court’s jurisdiction to review that issue. To view
a concession on a legal controversy as “mooting” the case
would mean that litigants freely could manipulate this Court’s
jurisdiction merely by altering their legal arguments on cer-
tiorari review. That cannot be correct. Cf. City of Mesquite v.
Alladdin’s Castle, Inc., 455 U.S. 283, 289 (1982) (mere volun-
tary cessation of a challenged practice does not deprive a
federal court of power to determine the legality of the prac-
tice). While the state unquestionably agrees with the sub-
stance of CBCC Inc.’s Eleventh Amendment argument, the
issue cannot be decided as one of “‘mootness.”
Moreover, at this juncture, the position of the patient
plaintiffs, both individually and in their representative capac-
ity, must be assumed to be unchanged—i.e., that they are
entitled to retrospective relief. And although CBCC Inc.
asserts that it has retained all interest in the “accounts paya-
ble,” and thus in any damages claim, that is noi at all
8
clear. The express provisions of the agreement appear to
assign those rights to Southmark for the four-month period
that CBCC Inc.’s ownership continued but Southmark man-
aged the facility. If this complaint were dismissed today,
Southmark could freely sue the state tomorrow on essentially
the same factual allegations and the identical legal theories
advanced originally by CBCC Inc. In short, the facts giving
rise to this controversy are not significantly changed and
CBCC Inc.’s change of legal theories does not drain this case
of its importance in determining the parties’ rights and lia-
bilities.
C. The Claims for Prospective Relief.
1. CBCC Inc.’s interests.
On the question of injunctive and declaratory relief, CBCC
Inc. correctly points out that the sale of the care facility termi-
nated any prospective interest it had in future Medicaid reim-
bursement levels. Thus, it argues that it no longer is suffering
any ongoing injury from the state’s conduct and has no claim
which can be remedied by prospective relief, thereby mooting
the litigation.
Notwithstanding the superficial appeal this argument may
have at first glance, given the actual! circumstances, at most
there is a basis for the substitution or joinder of Southmark as
a party. Under Federal Rule of Civil Procedure 25(c),® an
action may be continued by or against the original party,
notwithstanding the transfer of interest. Alternatively, the
court upon motion may direct the person to whom the interest
is transferred to be substituted or joined with the original
party. Thus, if this case were returned to the district court for
® Federal Rule of Civil Procedure 25(c) provides:
In case of any transfer of interest, the action may be continued
by or against the original party, unless the court upon motion
directs the person to whom the interest is transferred to be sub-
stituted in the action or joined with the original party. Service of
the motion shall be made as provided in subdivision (a) of this rule.
9
trial, CBCC Inc. despite the transfer would be able to main-
tain its action, although either plaintiffs or the state could
move to have Southmark joined or substituted as a party.’
As the rule implicitly recognizes, litigation is not “mooted”
by a transfer of interest alone. Yet that is all that has
occurred here, both as a matter of fact and as a matter of
law. Under the governing federal regulations, states are
required to place the new owner in the exact position of the
former owner. 42 C.F.R. § 442.14(a) provides:
When there is a change of ownership, the Medicaid
agency must automatically assign the agreement to the
new owner.
Subsection (b) of the same federal rule further requires that
the new owner is assigned the agreement subject to ‘the terms
and conditions under which it was originally issued” including
any special corrective conditions attached to the original
agreement and the original agreement’s expiration date.®
7 Under CBCC Inc’s analysis, this case is moot because the plaintiff
chooses not to pursue a claim where the federal rules expressly permit it to do
so. If CBCC Inc. wished to press its claim despite the transfer of interest,
defendants could not cause the case to be dismissed as moot. At most,
defendants could seek joinder of Southmark. Thus, application of the moot-
ness doctrine should not be dependent on one party's decision regarding
litigation strategy.
8 42 C.F.R. § 442.114(b) states:
An assigned agreement is subject to all applicable statutes and
regulations and to the terms and conditions under which it was
originally issued, including, but not limited to, the following:
(1) Any existing plan of correction.
(2) Any expiration date.
(3) Compliance with applicable health and safety standards.
(4) Compliance with the ownership and financial interest dis-
closure requirements of §§ 455.104 and 455.105 of this chapter.
(5) Compliance with civil rights requirements set forth in 45
CFR Parts 80, 84, and 90.
(6) Compliance with any additional requirements imposed by
the Medicaid agency.
10
Accordingly, here, Southmark has simply stepped into
CBCC’s shoes. The facility’s certification as a Medicaid pro-
vider, one of the most important Medicaid procedural hurdles
to clear, is unchanged. Southmark will operate under that
certification just as did CBCC Inc. until the annual renewal
comes due. Consistent with the federal r2gulation, the state
agency has assigned CBCC Inc.’s provider agreement to
Southmark. Thus, as a routine administrative matter, the
state has issued in Southmark’s name a standardized provider
agreement and heavy cost addendum identical to those pre-
viously in place when CBCC Inc. was the beneficial owner.
Although CBCC Inc. chooses to characterize this as a
“new” provider agreement, it is new only in the sense that it
now reflects the recent purchaser’s ownership interests. The
transfer of interest between CBCC Inc. and Southmark there-
fore simply is not a fact that extinguishes the prospective
interests at stake in this litigation. None of the relevant facts
has changed. The business (Coos Bay Care Center) continues
to be a certified Medicaid intermediate care facility. It con-
tinues to care for quadriplegic patients, and it continues to be
entitled to the heavy cost add-on to its rate for those patients
who qualify under the state’s Medicaid program. The state’s
Medicaid plan provisions and heavy cost policies and prac-
tices have not changed. In short, to whatever extent the
plaintiffs have ever had an actionable federal claim for a par-
ticular reimbursement level for certain patients (which is the
issue to be resolved in this case), the facts giving rise to that
claim are unchanged.
It may be that if this case were returned to the district
court for trial, neither CBCC Inc. nor Southmark would
choose to devote their resources to pursuing their claims. But
their ability voluntarily to dismiss the suit at the trial level is
beside the point. There should be no question that the “und-
erlying question persists and is agitated by the continuing
11
activities and program of petitioners. . . .” Carroll v. Presi-
dent and Commissioners of Princess Anne, 393 U.S. 175, 179
(1968). Under such circumstances, the mere transfer of
ownership interest in the Coos Bay Care Center does not moot
this controvery. Cf. De Veau v. Braisted, 363 U.S. 144, 146 n. 1
(1960) (labor controversy not mooted by fact that original
union was disbanded and all employees under its jurisdiction
came under the jurisdiction of a new local); NLRB v. Insur-
ance Agents, 361 U.S. at 500 n. 32 (merger of respondent union
with another union did not moot labor dispute; court would
treat both unions as parties on review).
2. The patient plaintiffs’ individual and repre-
sentative interests.
In support of its mootness arguments, CBCC Inc. says
very little about the individual patient plaintiffs, and all but
ignores the class action allegations of the complaint. By way
of footnote, CBCC Inc. simply attempts to dismiss the patient
plaintiffs’ claims as dependent on their status as “third party
beneficiaries cf the now-terminated provider con-
tract.” (Motion to Dismiss, n. 8). This ignores the une-
quivocal allegations of the complaint and also the position
that plaintiffs, including CBCC Inc., have taken in the lower
courts and before this Court.
In their complaint, plaintiffs alleged that “David and Ste-
ven Schwanke [sic] and Tami Mauer [sic] are third party bene-
ficiaries of this agreement and may maintain an action upon
it.” (Complaint, J.A. at 4). That allegation was necessary in
order for those plaintiffs to join in the pendent state breach of
contract claim, set out as plaintiffs’ second cause of
action. But the complaint went on to allege that the patient
plaintiffs are heavy care patients; that “heavy care” patients
are those who require significantly more or greater care than
ordinary patients due to medical or developmental problems;
that there are a number of heavy care patients at Coos Bay
12
Care Center and similar institutions throughout Oregon; and
that these patients do not receive appropriate care due to the
state’s zefusal to reimburse health care providers appropri-
ately for their care. (Jd. at 5-6). Plaintiffs added in their class
action allegations that they are representative of a class of
heavy care patients that exceeds 100 patients statewide. (Jd.
at 7).
On their individual behalves and on behalf of the putative
class, plaintiffs pleaded that the state’s reimbursement pol-
icies directly violated their federal statutory and constitu-
tional rights. (Jd. at 6). In the lower courts, plaintiffs urged
that the patients have an independent right under federal law
to sue over Medicaid reimbursement levels,° and they pre-
vailed on that argument in the Ninth Circuit.'° Moreover,
they vigorously reasserted that position before this Court in
opposing the petition for writ of certiorari.'! CBCC Inc.’s
position in the motion to dismiss is thus at odds with the
position that it has taken at every other stage of this
case. CBCC Inc.’s attempts to disassociate itself with its own
pleadings and legal arguments in an effort to moot this case
are disingenuous at best.
The individual plaintiffs have not joined in CBCC Inc.’s
arguments. They do not disclaim either their right or inten-
tion to pursue both prospective and retroactive relief, on their
own or the putative class’s behalf. Nor is there any theory on
which the transfer of corporate ownership could moot their
claims. At most, David and Steven Gibbs would have to
amend the complaint to refer to the new corporate owner
where relevant references to CBCC Inc. previously
appeared. Tami Watson’s interests in prospective relief may
® See, e.g., App. Br. at pp. 16-28; Reply Br. at p. 4.
0 See Pet. App. at pp. App-4 - App-5.
'! See, e.g., Br. Opp. at pp. 4, 8 and 12.
13
now be moot, given her classification as a heavy cost patient,
but her claim for damages is not. CBCC Inc. has not pre-
sented the Court with any basis upon which to conclude that
those patients do not have a continuing personal stake in their
individual claims, and has not suggested why they cannot
continue as representatives of the putative class. Nor has
CBCC Inc. pointed to any theory on which the putative class
interests in this litigation are extir suished. CBCC Inc. men-
tions only that the class “does not appear” to have been cer-
tified. (Motion to Dismiss, n. 3). Certification, however, was
never denied. The complaint was dismissed for failure to state
a claim; the district court never reached the issue of certifica-
tion. For present purposes, the action must be assumed to be
properly pleaded as a class claim. See, e.g., Gatling v. Butler,
52 F.R.D. 389, 395 (D. Conn. 1971) (citing cases); Washington
v. Wyman, 54 F.R.D. 266, 270-71 (S.D. N.Y. 1971) (same). So
long as the patients’ representational interests are not moot,
they may continue to press the class claim. See generally
United States Parole Commission v. Geraghty, 445 U.S. 388
(1980). Thus, the patient plaintiffs continue to have an
unquestioned interest in resolving this controversy, both indi-
vidually and as class representatives.
Accordingly, the change of corporate owners simply is not
a fact that completely and irrevocably eradicates the prospec-
tive interests of the patients or the provider. CBCC Inc.’s
disinclination to seek to substitute the new corporate owner as
a party should not be permitted to frustrate this Court’s
review; nor should that result follow from CBCC’s willingness
to ignore the interests that the patients, individually and as
putative class representatives, have asserted from the out-
set. The state’s regulations, policies and practices for heavy
cost reimbursement are unchanged. The only real change is
in CBCC Inc.’s and the new provider’s strategy in pursuing
their claims before this Court. That strategy should not
14
impede review of an actua! controversy of unquestioned public
importance and it should not divest the state of the oppor-
tunity to regain the benefit of a judgment that was correctly
entered and would have important res judicata and collateral
estoppal effects if reinstated today.
II. None of the Other Arguments Advanced by CBCC
Inc. are Properly Raised.
CBCC Inc.’s remaining arguments are not properly raised
or before the Court. The arguments urge that certain issues
either were not preserved below or were not clearly reached or
decided by the lower courts, and that the case therefore does
not warrant this Court’s review. All of the arguments are
predicated on wrong characterizations of the record, misun-
derstandings of the issues presented, and incorrect conclu-
sions about the lower court’s opinion and the effect its opinion
has on the issues this court appropriately may reach.
More important, however, for purposes of this motion,
none of these arguments bears on jurisdiction; all are matters
that could have been advanced in the plaintiffs’ Brief in
Opposition to the Petition for Writ of Certiorari, but were
not. Under this Court’s rules, they are improperly raised in
the motion to dismiss. See S. Ct. Rules 22.3 and 35.5. They
therefore should be summarily rejected.
CONCLUSION
For the reasons set forth above, respondent Coos Bay Care
Center, Inc.’s motion to dismiss the writ of certiorari should
be denied.
Respectfully submitted,
DAVE FROHNMAYER
Attorney General of Oregon
WILLIAM F. GARY
Deputy Attorney General
VIRGINIA L. LINDER
Solicitor General
Counsel for Petitioners
App-1
APPENDIX A
Nuring Facility Contract
Part 1. Signators
This contract is between the State of Oregon, by and through
the Department of Human Resources, Senior Services Divi-
sion, hereinafter referred to as the “Division” in order to pro-
cure Nursing Facility services and
COOS BAY ASSOCIATES LIMITED PARTNERSHIP
Coos Bay Care Center
2625 Koos Bay Blvd.
Coos Bay, OR 97420
hereinafter referred to as “Contractor.”
This 0 SNF contract & ICF contract 0 extension &% Heavy
Cost addendum 0 Contiguous Area contract begins 07-01-87
and ends 10-31-87; however, it is not effective until signed by
the Senior Services Division of the State of Oregon.
The following listed parts, together with attachments referred
to therein and attached, form the whole of this contract.
Contract Documents
Place an X in the appropriate box(es):
& Part 1. Signators.
& ©Part 2. Skilled Nursing Facility and/or intermediate
Care Facility Contract Conditions, para-
graphs 1 through 9, pages 1 through 6
attached.
O Part 3. Extension of Nursing Facility Contract, para-
graph 1 attached.
& Part 4. Heavy Cost Addendum, paragraphs 1 through
2 attached.
QO Part 5. Area contiguous to Oregon, conditions, 1 page
attached.
[Signatures and copy distribution omitted in printing]
App-2
PART 2
SKILLED/NURSING INTERMEDIATE CARE
. Definitions: Nursing Facility, as used in this part, means a
Skilled or Intermediate Care Facility, licensed and certified
to provide care under Federal and State laws, rules and
regulations under Title XVIII or Title XIX.
. Pursuant to ORS 184-750, the Department of Human
Resources, through Adult and Family Services Division
(AFS), is the agency responsible for administering the
Medical Assistance Program (Title XIX) in Oregon. By
agreement, the Senior Services Division administers the
Title XIX Long-Term Care Services Program.
. Section 1902(a)(27) of Title XIX of the Social Security Act
requires a state to enter into a written agreement with
every person or institution providing services under the
State Plan for Medical Assistance. The purpose of this
agreement is to assure that the facility is providing services
appropriate to the needs of the clients in return for pay-
ment by the agency for services purchased and provided.
. To participate in the Oregon Medical Assistance Program
(Title XIX) a Nursing Facility must: (1) be licensed at the
appropriate skill level as a nursing facility or hospital under
the laws of Oregon; (2) be currently meeting on a continu-
ing basis standards for licensure; (3) be administered by a
licensed nursing facility administrator who holds a current
Oregon license or by a hospital administrator; and (4) be
100% Medicaid certified or as specified in OAR 411-70-010
and meet on a continuing basis federal stancards for
participation in the Title XIX Medical Assistance Pro-
gram. All conditions apply to clients who are receiving
assistance under Title XIX or the General Assistance
Program.
. Contractor has filed an application with the State Senior
Services Division to provide, as a Nursing Facility, health-
related care and services to any and all persons eligible, and
referred by SSD/AAA for the Title XIX Medical
Assistance Program. The approved application is attached
hereto and by this reference made a part of this Agreement.
App-3
CONTRACTOR AGREES TO:
A.
Comply with all Oregon Administrative Rules and
state statutes applicable to the operation of Nursing
Facilities under the Title XIX Long-Term Care Facil-
ity Services Program.
Comply with all applicable sections of the Title XIX
Social Security Act and amendments thereto and
applicable regulations.
Inform Division/Type B Area Agency on Aging (AAA)
in writing on the day of admittance or discharge when
clients covered under the Title XIX Program are
admitted to and discharged from the Nursing Facility.
Notify Division’Type B AAA on the first working day
after transfer »f the client to an acute care hospital and
prior to therapeutic leave.
Notify Division/Type B AAA in writing on the date the
license is changed or of any change in operating license
issued by the State Senior Services Division.
Meet the requirement of Residents’ Bill of Rights as
outlined in 42 CFR 442.311.
Provide cooperative methods and procedures relating
to the utilization of care and services, as may be neces-
sary to safeguard against unnecessary utilization of
such care and services.
Submit annual cost statements within the established
time limits and using the forms and instructions spec-
ified in the Title XIX Long-Term Care Facility Serv-
ices Guide.
Submit billings for clients covered by this Agreement
showing correct resident day counts, resident income,
and payment rates consistent with dates and amounts,
prior authorized by the Division/Type B AAA.
Contractor will maintain detailed, complete, and accu-
rate records of the care provided and the costs of the
care. Records of services and costs will be made avail-
App-4
able to the Division upon request, including informa-
tion requested by telephone. The Division/Type B
AAA has the right to photocopy any records, including
incident reports and personnel records, deemed by the
division necessary to carry out state and federal stat-
utes and rules. The Contractor shall retain medical
records for a minimum of seven years and financial
records for a minimum of three years or from the date
all audit questions have been resolved, whichever
period is the longest. Records will include at least the
following:
1) Records as required by Section 1905(c) and (d) of
Title XIX of the Social Security Act and any
amendments thereto;
2) Records of all treatments, drugs, and services for
which Contractor has been or is to be paid under the
Title XIX Program, including the authority for and
the date of administration of such treatment, drugs,
or services;
3) All other records as may bz found necessary by
Division in compiiance with any federal or state law,
rule, or regulation promulgated by the United States
Department of Health and Human Services, or by
the Division, or as a result of a judicial action.
_ Provide access to residents as may be found necessary
by Division/Type B AAA to comply with state and
federal laws, rules, and regulations. This includes pro-
fessional review organizations contracting with the
Division.
Accept payment from the Division as payment in full
for those services, goods, and products included in the
all-inclusive per diem rate, with the understanding
that: Whosoever knowingly and willfully: (1) charges
for any such service, goods, or products in excess of the
ail-inclusive per diem rate established by the Division;
or (2) charges, solicits, accepts or receives, in addition
to the amount paid by the Division, any gift, money,
donation, or other consideration as a pre-condition of
admitting a client to a Nursing Facility, or as a require-
App-5
ment for the client’s continued stay in such a facility,
shall be guilty of a (federal) felony and upon conviction
thereof shall be fined not more than £25,000 or
imprisoned for not more than five years or both.
. Division may withhold payment because of violation of
this Agreement by Contractor until the violation is
remedied. If violations are not remedied in the time
specified by Division in the violation notice, Division
may terminate this Agreement upon 30 days’ written
notice.
. Not to employ any person in a management or super-
visory capacity who has been convicted of a criminal
offense involving Medicaid or Medicare laws, rules, or
regulations.
. Assure that neither Contractor nor its employes shall
aid, abet, or engage in any act detrimental to the health,
safety, or welfare of the clients or in the abuse of clients
under its care; nor shall Contractor hire or retain in
employment persons whom it knows or should know
were convicted for such practices.
Meet conditions for participation as a Nursing Facility
required by Federal Regulations 42 CFR 442.101 and
442.300, and meet CFR 442.311 and 442.320 relating to
patient rights and protection of patient funds.
. Notify the Division/Type B AAA of any client acquir-
ing a change in level of nursing facility care, and coop-
erate with the division/AAA in making alternative
plans with the client.
. Comply with Title VI, Civil Rights Act of 1964, and
Section 504 of the Rehabilitation Act of 1973.
Comply with Executive Order 11246 entitled Equal
Employment Opportunity as amended by Executive
Order 11375 and as supplemented in Department of
Labor Regulation 41 CFR Part 60. All subcontracts
shall also comply with these provisions.
. Maintain fiscal records and other records pertinent to
this contract. All fiscal records shall be maintained
App-6
pursuant to accepted accounting standards and other
records shall be maintained to the extent necessary to
clearly reflect actions taken. Contractor further agrees
to provide access to any books, documents, papers, and
records of Contractor which are pertinent to this con-
tract and, further, to allow the making of excerpts,
transcripts, or performing audits or examinations
thereof. Such access shall be freely allowed to state and
federal personnel and their duly authorized agents.
All such records shall be retained and kept accessible
for three years following final payment and conclusion
of all pending matters. All subcontracts shall also com-
ply with these provisions.
In addition, Contractor and its agents, employes, and
subcontractors shall maintain all such records fully
confidential. Such confidential status shall be in com-
pliance with the requirements stated in 45 CFR 205.50
and 42 CFR 431 subpart F.
U. Abide by all mandatory standards and policies which
relate to energy effeciency and which are contained in
the State of Oregon energy conservation plan which
was issued in compliance with the Energy Policy and
Conservation Act (PL 94-165). All subcontracts shall
also be in compliance with the foregoing.
V. Ensure that if the sum payable under this contract
exceeds or may exceed *100,000, the Contractor shall
provide the State of Oregon a written assurance the
Contractor will comply with all applicable standards,
orders, or requirements issued under Section 306 of the
Clean Air Act (#2 [sic] USC 1857 H) Section 508 of the
Clean Water Act (33 USC 1368) Executive Order 11738
and Environmental Protection Agency regulation (40
CFR Part 15), and further, Contractor agrees to
promptly report all infractions to the State of Oregon,
the Federal Grantor Agency, and to the U.S. Environ-
mental Protection Agency. All subcontracts shall also
be in compliance with these provisions.
7. DIVISION AGREES TO:
A. Make payments to Contractor in accordance with all
Oregon Administrative Rules applicable to Nursing
App-7
Facilities under the Title XIX Long-Term Care Facil-
ity Services Program, as soon as feasible after a proper
claim is submitted and approved.
B. Give Contractor reasonable notice in writing of any
change related to the Division Title XIX Medical
Assistance Program that will affect Contractor.
8. DIVISION/TYPE B AAA AGREES TO:
A. Prior authorize payments for clients for whom the divi-
sion is requesting service.
B. Furnish copies of service/financial plans to the con-
tractor.
C. Update eligibility/payment file to assure correct pay-
ment.
9. CONTRACTOR AND DIVISION MUTUALLY AGREE
THAT:
A. If federal and/or state laws are amended, repealed or
judicially interpreted so as to render fulfillment of this
Agreement by either party not beneficial or impossible
to perform, both Contractor and Division are dis-
charged from further obligation created under terms of
this Agreement, except for equitable settlement of pos-
sible overpayments or underpayments up to the date of
the termination.
B. This Agreement shall remain in effect only as long as
Contractor remains licensed and certified by the State
Senior Services Division.
C. This Agreement may also be terminated either by
mutual consent of the Division and the Contractor, or
without cause, upon 30 days’ written notice by either
party.
D. If Contractor’s certification is voluntarily or involun-
tarily terminated, the Division/Type B AAA agrees to
assist all Title XIX clients in moving from the decer-
tified beds, provided that the Contractor has secured
prior consent from the clients and/or their guard-
ian. In all cases, however, the Division will discontinue
App-8
payment for Contractor’s services no later than 30 days
subsequent to the termination of this Agreement.
If the Division has determined that a facility is defi-
cient in areas relating to patient care or if the Division
has made a determination of potential decertification
(see Rule 416-17-090), no payment will be made under
this Agreement by the Division for clients admitted to
the facility after a date specified by the Division and
until such time that the division determines that defi-
ciencies have been corrected.
If Contractor does not correct deficiencies in accord-
ance with Contractor’s written plan of correction sub-
mitted to and approved by the Division, this
Agreement may be terminated upon written notice.
. Contractor shall upon written notice from Division
take immediate steps to terminate any employe that in
Division’s judgement is a threat to the health, safety, or
welfare of any client in Contractor’s facility covered by
this Agreement. Termination of facility employe’(s)
shall be according to facility perscnnel policy and pro-
cedures.
. Contractor must notify Division at least 30 days before
sale or lease of the facility and provide the name of the
buyer/lessee and names, addresses, and phone num-
bers of owners of the business entity buying or leasing
the facility covered by this Agreement.
No payment to buyer or lessee of the facility will be
made until buyer or lessee has received a new license,
certification, and a contract from the Senior Services
Division.
The conviction of the Contractor, or anyone having an
ownership interest in the facility, of a criminal act
involving Medicaid of Medicare laws, rules, or regula-
tions will be grounds for termination of this Agreement
by the Division.
. Any breach or violation of ary of the foregoing provi-
sions shall make this Agreement subject to termination
upon 30 days’ written notice by the Division.
L.
App-9
Division may recoup money paid to the contractor if
the Division determines that services contracted for
were not pruvided or were not provided in an acceptable
manner. If recoupment is made, the amount recouped
shall not be recovered in the year-end settlement.
Amounts due to or from the facility from an audit set-
tlement are payable within 30 days of receipt of the
audit report. Amounts not paid to the Division within
30 days will be recouped from the next monthly vendor
payment, unless an extended payment plan is
approved.
App-10
PART 4
ADDENDUM TO AGREEMENT FOR
PARTICIPATION IN THE TITLE XIX
HEAVY COST PROGRAM CONDITIONS
1. Definitions: Nursing facility, as used in this part, means a
Skilled or Intermediate Care Facility, licensed and certified
to provide care under Federal and State laws, rules and
regulations under Title XVIII or Title XIX.
This addendum is the agreement for participation in the
Title XIX Heavy Cost Program, between the State of
Oregon acting through its Department of Human
Resources, Senior Services Division, and the Nursing
Facility, hereinafter referred to as contractor. Said con-
tract is amended as follows:
a.
Division agrees to pay Contractor a special daily rate
established by Division for the care of individuals iden-
tified by Division as eligible for “heavy cost” care. The
client must occupy a bed certified by the State Senior
Services Division and covered by an agreement with the
Division. The “heavy cost” payment for an eligible cli-
ent is in effect for a period specified by Division and
extension will be reassessed as determined by Divi-
sion. Contractor agrees to provide supplies and serv-
ices included in the all-inclusive rate, as specified in the
Title XIX Long-Term Care Facility Services Guide. In
addition, Contractor will provide all exceptional nurs-
ing or personal services as required based on an assess-
ment by the Division. The “heavy cost” rate does not
include those medical services; i.e., physician, physical
therapy, pharmacy, dental, etc., paid through Title
XIX, Title XVIII, Veterans Administration, etc., and
personal incidental items authorized for payment from
the client’s personal incidental allowance (see Rule
461-17-160). The heavy cost rate will be the rate estab-
lished either for skilled (SNF) or intermediate (ICF)
level of care.
Contractor will maintain detailed, complete, and accu-
rate records of the care provided and the costs of the
App-11
care. Records of services and costs will be made avail-
able to the Division upon request.
The modification, cancellation, or continuation of the
arrangement set forth in this addendum will be the
responsibility of Division to renegotiate with the Con-
tractor.
[Legal sufficiency approval signatures omitted in printing]
App-13
APPENDIX B
Nuring Facility Contract
Part 1. Signators
This contract is between the State of Oregon, by and through
the Department of Human Resources, Senior Services Divi-
sion, hereinafter referred to as the “Division” in order to pro-
cure Nursing Facility services and
COOS BAY CARE CENTER
2625 Koos Bay Blvd.
Coos Bay, OR 97420
hereinafter referred to as “Contractor.”
This 0 SNF contract % ICF contract 0 extension KX Heavy
Cost addendum 0) Contiguous Area contract begins 01-01-87
and ends 10-31-87; however, it is not effective until signed by
the Senior Services Division of the State of Oregon.
The following listed parts, together with attachments referred
to therein and attached, form the whole of this contract.
Coniract Documents
Place an X in the appropriate box(es).
& Part 1. Signators.
Part 2. Skilled Nursing Facility and/or intermediate
Care Facility Contract Conditions, para-
graphs 1 through 9, pages 1 through 6
attached.
(1) Part 3. Extension of Nursing Facility Contract, para-
graph 1 attached.
*%} Part 4. Heavy Cost Addendum, paragraphs 1 through
2 attached.
© Part 5. Area contiguous to Oregon, conditions, 1 page
attached.
[Signatures and copy distribution omitted in printing]
App-i4
PART 2
SKILLED/NURSING INTERMEDIATE CARE
. Definitions: Nursing Facility, as used in this part, means a
Skilled or Intermediate Care Facility, licensed and certified
to provide care under Federal and State laws, rules and
regulations under Title XVIII or Title XIX.
_ Pursuant to ORS 184-750, the Department of Human
Resources, through Adult and Family Services Division
(AFS), is the agency responsible for administering the
Medical Assistance Program (Title XIX) in Oregon. By
agreement, the Senior Services Division administers the
Title XIX Long-Term Care Services Program.
_ Section 1902(a)(27) of Title XIX of the Social Security Act
requires a state to enter into a written agreement with
every person or institution providing services under the
State Plan for Medical Assistance. The purpose of this
agreement is to assure that the facility is providing services
appropriate to the needs of the clients in return for pay-
ment by the agency for services purchased and provided.
. To participate in the Oregon Medical Assistance Program
(Title XIX) a Nursing Facility must: (1) be licensed a. the
appropriate skill level as a nursing facility or hospital under
the laws of Oregon; (2) be currently meeting on a continu-
ing basis standards for licensure; (3) be administered by a
licensed nursing facility administrator who holds a current
Oregon license or by @ hospital administrator; and (4) be
100% Medicaid certified or as specified in OAR 411-70-010
and meet on a continuing basis federal standards for
participation in the Title XIX Medical Assistance Pro-
gram. All conditions apply to clients who are receiving
assistance under Title XIX or the General Assistance
Program.
_ Contractor has filed an application with the State Health
Division to provide, as a Nursing Facility, health-related
care and services to any and all persons eligible, and
referred by SSD/AAA for the Title XIX Medical
Assistance Program. The approved application is attached
hereto and by this reference made a part of this Agreement.
App-15
CONTRACTOR AGREES TO:
A.
Comply with all Oregon Administrative Rules and
state statutes applicable to the operation of Nursing
Facilities under the Title XIX Long-Term Care Facil-
ity Services Program.
Comply with all applicable sections of the Title XIX
Social Security Act and amendments thereto and
applicable regulations.
Inform Division/Type B Area Agency on Aging (AAA)
in writing on the day of admittance or discharge when
clients covered under the Title XIX Program are
admitted to and discharged from the Nursing Facility.
Notify Division/Type B AAA on the first working day
after transfer of the client to an acute care hospital and
prior to therapeutic leave.
Notify Division/Type B AAA in writing on the date the
license is changed or of any change in operating license
issued by the State Health Division.
Meet the requirement of Residents’ Bill of Rights as
outlined in 42 CFR 442.311.
Provide cooperative methods and procedures relating
to the utilization of care and services, as may be neces-
sary to safeguard against unnecessary utilization of
such care and services.
Submit annual cost statements within the established
time limits and using the forms and instructions spec-
ified in the Title XIX Long-Term Care Facility Serv-
ices Guide.
Submit billings for clients covered by this Agreement
showing correct resident day counts, resident income,
and payment rates consistent with dates and amounts,
prior authorized by the Division/Type B AAA.
Contractor will maintain detailed, complete, and accu-
rate records of the care provided and the costs of the
care. Records of services and costs will be made avail-
App-16
able to the Division upon request, including informa-
tion requested by telephone. The Division/Type B
AAA has the right to photocopy any records, including
incident reports and personnel records, deemed by the
division necessary to carry out state and federal stat-
utes and rules. The Contractor shall retain medical
records for a minimum of seven years and financial
records for a minimum of three years or from the date
all audit questions have been resolved, whichever
period is the longest. Records will include at least the
following:
1) Records as required by Section 1905(c) and (d) of
Title XIX of the Social Security Act and any
amendments thereto;
2) Records of all treatments, drugs, and services for
which Contractor has been or is to be paid under the
Title XIX Program, including the authority for and
the date of administration of such treatment, drugs,
or services;
3) All other records as may be found necessary by
Division in compliance with any federal or state law,
rule, or regulation promulgated by the United States
Department of Health and Human Services, or by
the Division, or as a result of a judicial action.
K. Provide access to residents as may be found necessary
by Division/Type B AAA to comply with state and
federal laws, rules, and regulations. This includes pro-
fessional review organizations contracting with the
Division.
L. Accept payment from the Division as payment in full
for those services, goods, and products included in the
all-inclusive per diem rate, with the understanding
that: Whosoever knowingly and willfully: (1) charges
for any such service, goods, or products in excess of the
all-inclusive per diem rate established by the Division;
or (2) charges, solicits, accepts or receives, in addition
to the amount paid by the Division, any gift, money,
donation, or other consideration as a pre-condition of
admitting a client to a Nursing Facility, or as a require-
App-17
ment for the client’s continued stay in such a facility,
shall be guilty of a (federal) felony and upon conviction
thereof shall be fined not more than £25,000 or
imprisoned for not more than five years or both.
. Division may withhold payment because of violation of
this Agreement by Contractor until the violation is
remedied. If violations are not remedied in the time
specified by Division in the violation notice, Division
may terminate this Agreement upon 30 days’ written
notice.
. Not to employ any person in a management or super-
visory capacity who has been convicted of a criminal
offense involving Medicaid or Medicare laws, rules, or
regulations.
. Assure that neither Contractor nor its employes shall
aid, abet, or engage in any act detrimental to the health,
safety, or welfare of the clients or in the abuse of clients
under its care; nor shall Contractor hire or retain in
employment persons whom it knows or should know
were convicted for such practices.
Meet conditions for participation as a Nursing Facility
required by Federal Regulations 42 CFR 442.101 and
442.300, and meet CFR 442.311 and 442.320 relating to
patient rights and protection of patient funds.
. Notify the Division/Type B AAA of any client acquir-
ing a change in level of nursing facility care, and coop-
erate with the division/AAA in making alternative
plans with the client.
. Comply with Title VI, Civil Rights Act of 1964, and ©
Section 504 of the Rehabilitation Act of 1973.
Comply with Executive Order 11246 entitled Equal
Employment Opportunity as amended by Executive
Order 11375 and as supplemented in Department of
Labor Regulation 41 CFR Part 60. All subcontracts
shall also comply with these provisions.
. Maintain fiscal records and other records pertinent to
this contract. All fiscal records shall be maintained
App-18
pursuant to accepted accounting standards and other
records shall be maintained to the extent necessary to
clearly reflect actions taken. Contractor further agrees
to provide access to any books, documents, papers, and
records of Contractor which are pertinent to this con-
tract and, further, to allow the making of excerpts,
transcripts, or performing audits or examinations
thereof. Such access shall be freely allowed to state and
federal personnel and their duly authorized agents.
All such records shall be retained and kept accessible
for three years following final payment and conclusion
of all pending matters. All subcontracts shall also com-
ply with these provisions.
In addition, Contractor and its agents, employes, and
subcontractors shall maintain all such records fully
confidential. Such confidential status shall be in com-
pliance with the requirements stated in 45 CFR 205.50
and 42 CFR 431 subpart F.
U. Abide by all mandatory standards and policies which
relate to energy effeciency and which are contained in
the State of Oregon energy conservation plan which
was issued in compliance with the Energy Policy and
Conservation Act (PL 94-165). All subcontracts shall
also be in compliance with the foregoing.
V. Ensure that if the sum payable under this contract
exceeds or may exceed *100,000, the Contractor shall
provide the State of Oregon a written assurance the
Contractor will comply with all applicable standards,
orders, or requirements issued under Section 306 of the
Clean Air Act (2 [sic] USC 1857 H) Section 508 of the
Clean Water Act (33 USC 1368) Executive Order 11738
and Environmental Protection Agency regulation (40
CFR Part 15), and further, Contractor agrees to
promptly report all infractions to the State of Oregon,
the Federal Grantor Agency, and to the U.S. Environ-
mental Protection Agency. All subcontracts shall also
be in compliance with these provisions.
7. DIVISION AGREES TO:
A. Make payments to Contractor in accordance with all
Oregon Administrative Rules applicable to Nursing
|
App-19
Facilities under the Title XIX Long-Term Care Facil-
ity Services Program, as soon as feasible after a proper
claim is submitted and approved.
Give Contractor reasonable notice in writing of any
change related to the Division Title XIX Medical
Assistance Program that will affect Contractor.
8. DIVISION/TYPE B AAA AGREES TO:
A.
B.
C.
Prior authorize payments for clients for whom the divi-
sion is requesting service.
Furnish copies of service/financial plans to the con-
tractor.
Update eligibility/payment file to assure correct pay-
ment. -
9. CONTRACTOR AND DIVISION MUTUALLY AGREE
THAT:
A.
If federal and/or state laws are amended, repealed or
judicially interpreted so as to render fulfillment of this
Agreement by either party not beneficial or impossible
to perform, both Contractor and Division are dis-
charged from further obligation created under terms of
this Agreement, except for equitable settlement of pos-
sible overpayments or underpayments up to the date of
the termination.
This Agreement shall remain in effect only as long as
Contractor remains licensed and certified by the State
Health Division.
This Agreement may also be terminated either by
mutual consent of the Division and the Contractor, or
without cause, upon 30 days’ written notice by either
party.
If Contractor’s certification is voluntarily or involun-
tarily terminated, the Division/Type B AAA agrees to
assist all Title XIX clients in moving from the decer-
tified beds, provided that the Contractor has secured
prior consent from the clients and/or their guard-
App-20
ian. In all cases, however, the Division will discontinue
payment for Contractor’s services no later than 30 days
subsequent to the termination of this Agreement.
If the Division or the State Health Division has deter-
mined that a facility is deficient in areas relating to
patient care or if the Health Division has made a
determination of potential decertification (see Rule
416-17-090), no payment will be made under this
Agreement by the Division for clients admitted to the
facility after a date specified by the Division and until
such time that the division determines that deficiencies
have been corrected.
If Contractor does not correct deficiencies in accord-
ance with Contractor’s written plan of correction sub-
mitted to and approved by the Division or Health
Division, this Agreement may be terminated upon
written notice.
Contractor shall upon written notice from Division
take immediate steps to terminate any employe that in
Division’s judgement is a threat to the health, safety, or
welfare of any client in Contractor’s facility covered by
this Agreement. Termination of facility employe’(s)
shall be according to facility personnel policy and
procedures.
. Contractor must notify Division at least 30 days before
sale or lease of the facility and provide the name of the
buyer/lessee and names, addresses, and phone num-
bers of owners of the business entity buying or leasing
the facility covered by this Agreement.
No payment to buyer or lessee of the facility will be
made until buyer or lessee has received a new license
and certification from the Health Division, and a
contract from the Senior Services Division.
The conviction of the Contractor, or anyone having an
ownership interest in the facility, of a criminal act
involving Medicaid of Medicare laws, rules, or regula-
tions will be grounds for termination of this Agreement
by the Division.
App-21
K. Any breach or violation of any of the foregoing provi-
sions shall make this Agreement subject to termination
upon 30 days’ written notice by the Division.
L. Division may recoup money paid to the contractor if
the Division determines thet services contracted for
were not provided or were not provided in an acceptable
manner. If recoupment is made, the amount recouped
shall not be recovered in the year-end settlement.
M. Amounts due to or from the facility from an audit set-
tlement are payable within 30 days of receipt of the
audit report. Amounts not paid to the Division within
30 days will be recouped from the next monthly vendor
payment, unless an extended payment plan is
approved.
App-22
PART 4
ADDENDUM TO AGREEMENT FOR
PARTICIPATION IN THE TITLE XIX
HEAVY COST PROGRAM CONDITIONS
1. Definitions: Nursing facility, as used in this part, means a
Skilled or Intermediate Care Facility, licensed and certified
to provide care under Federal and State laws, rules and
regulations under Title XVIII or Title XIX.
This addendum is the agreement for participation in the
Title XIX Heavy Cost Program, between the State of
Oregon acting through its Department of Human
Resources, Senior Services Division, and the Nursing
Facility, hereinafter referred to as contractor. Said con-
tract is amended as follows:
a.
b.
Division agrees to pay Contractor a special daily rate
established by Division for the care of individuals
identified by Division as eligible for “heavy cost”
care. The client must occupy a bed certified by the
State Health Division and covered by an agreement
with the Division. The “heavy cost” payment for an
eligible client is in effect for a period specified by
Division and extension will be reassessed as determined
by Division. Contractor agrees to provide supplies and
services included in the all-inclusive rate, as specified in
the Title XIX Long-Term Care Facility Services
Guide. In addition, Contractor will provide all excep-
tional nursing or personal services as required based on
an assessment by the Division. The “heavy cost” rate
does not include those medical services; i.e., physician,
physical therapy, pharmacy, dental, etc., paid through
Title XIX, Title XVIII, Veterans Administra. ion, etc.,
and personal incidental items authorized for payment
from the client’s personal incidental allowance (see
Rule 461-17-160). The heavy cost rate will be the rate
established either for skilled (SNF) or intermediate
(ICF) level of care.
Contractor will maintain detailed, complete, and accu-
rate records of the care provided and the costs of the
—
App-23
care. Records of services and costs will be made avail-
able to the Division upon request.
c. The modification, cancellation, or continuation of the
arrangement set forth in this addendum will be the
responsibility of Division to renegotiate with the Con-
tractor.
[Legal sufficiency approval signatures omitted in printing]
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