333-610-0030 Need The following method is an extension of the general requirements for analysis of need set forth in OAR 333-580-0040(1): (1) Determine service area: (a) Except as provided in subsections (b) and (c) of this section, the geographical service area of the applicant will be considered to be the county in which the facility is located; (b) Service areas in health service area III are defined as follows: Hood River, Sherman and Wasco Counties; Crook, Deschutes and Jefferson Counties; Gilliam, Morrow and Wheeler Counties; Union and Wallowa Counties; Baker County; Malheur County; Grant County; Harney County; Lake County; Umatilla County; and Klamath County; (c) An applicant may propose an alternative service area to that specified in subsection (a) or (b) of this section. Such alternative service area, if accepted by the division, will be applied only to the review of the applicant’s proposal, and shall not affect the applicability of subsections (a) and (b) of this section to other applications. The appropriateness of such an alternative service area must be demonstrated by the applicant to the division’s satisfaction. In demonstrating the appropriateness of the proposed alternative service area, the applicant shall discuss and provide data on the following: (A) Patient origin and length of stay by zip code for admissions for the most recent completed fiscal or calendar year for all nursing homes in the proposed service area. The applicant should list zip code of origin and length of stay for each admission, but should not use any patient names. The proposed service area should account for at least 75 percent of all admissions to service area nursing homes. It is recognized that nursing homes other than the applicant may sometimes be unwilling to provide such data but at a minimum data must be provided for the applicant facility, and documentation must be submitted to show that other facilities were asked to provide data; (B) Travel patterns and highways between the proposed service area and adjacent areas; (C) Historical market patterns for health and other services; and (D) Geographic or other considerations that might delineate the proposed areas as a distinct service area. (2) Estimate population age 65 and over in service area: (a) As a basis for estimating service population for particular past and future years, determine the population age 65 and over in the service areas as of 1970, 1980 through 1985, 1990 and 1995; (b) For 1970 and 1980, use the U.S. census counts; (c) For 1990 and 1995, use the projections provided in Population Projections, Oregon and Its Counties: 1980 to 2000, Center for Population Research and Census (CPRC), Portland State University, June 1984; (d) For 1981 through 1986, use estimates of population age 65 and over developed by CPRC; (e) Estimate the population age 65 and over for the tenth year prior to the application through 1979 using the following method: (A) Determine the ratio of elderly to total population in both 1970 and 1980 by dividing the population over age 65 by the total population for each of these years; (B) Estimate these ratios for the tenth year prior to the application through 1979 by applying linear interpolation to the 1970 and 1980 ratios from paragraph (A) of this subsection; (C) Obtain estimates for total service area population in each year from the tenth year prior to the application through 1979 from CPRC’s “Inter-Censal Estimates of Oregon, by County: 1970–1980,” April 1982; (D) To estimate the population age 65 and over for the tenth year prior to the application through 1979, multiply the ratio in paragraph (B) of this subsection by the total population from paragraph (C) of this subsection for each year. (f) To estimate the population age 65 and over for the years 1987 through 1989, apply linear interpolation to the 1985 and 1990 figures for population age 65 and over; (g) To estimate the population age 65 and over for any of the years 1991 through 1994 (if required by subsection (11)(a) of this rule), apply linear interpolation to the 1990 and 1995 projections of population age 65 and over. (3) Obtain historical nursing home patient days: For each of the last 10 years, from the Annual Reports for nursing homes and hospital-based long-term care facilities, obtain the October 1 through September 30 yearly total patient days of nursing home care delivered in the service area. (4) Determine historical use-rates: (a) Based on section (2) of this rule, prepare a table, showing for each 10 years prior to the application to the fifth year following the year of submission of the application, the estimated age 65 and over population for the service area; (b) Add to the table, a column, based on section (3) of this rule, showing annual historical patient days for each year from 10 years prior to the application to present; (c) Determine use-rates (number of patient days per 1,000 persons age 65 and over in the service area) by dividing each figure entered under subsection (b) of this section, by the corresponding figure entered under subsection (a) of this section, divided by 1,000. (5) Determine potential patient days: To the table prepared in section (4) of this rule, add columns as follows: (a) For each year from 10 years prior to the application to present, the number of licensed nursing home beds (including hospital-based) in the service area. The two most recent years are available from the division. Historical data are available from the Seniors and People with Disabilities Division; (b) For each bed number in subsection (a) of this section, multiply by 365 to obtain potential calendar year patient days available in the service area. (6) Determine average occupancy: To the table prepared in sections (4) and (5) of this rule, add a column computed by dividing the historical patient days for each year, by the potential patient days, and converting to percent. (7) Evaluate occupancy: (a) If, in the most recent October 1 through September 30 year for which Annual Report data are available, average occupancy for the service area was 95 percent or more, more beds may be needed; (b) If average occupancy for the service area was less than 95 percent, more beds may not be needed. Applicant must demonstrate, under these circumstances, that a combination of factors will assure 95 percent service area occupancy if the application is approved. Such factors may include the plans of state agencies utilizing nursing home beds; projected increases of user populations; plans of other nursing home providers in the service area; (c) If 95 percent service area occupancy cannot be demonstrated, but 90 percent can be demonstrated, and applicant demonstrates that approval would result in maintaining access to nursing home care in the service area at reasonable cost, the beds may be needed. (8) If, under section (7) of this rule, beds may be needed, proceed with the analysis. (9) Determine future bed inventory: To the most recent available Seniors and People with Disabilities Division inventory of licensed nursing home beds (including hospital-based) in the service area, make the following adjustments: (a) Add beds in the service area not yet licensed, for which there is an approved certificate of need in effect; (b) Subtract beds in the service area for which there is a documented commitment to the division for delicensure within the next three years. (10) Determine the year by which to demonstrate need: (a) Ordinarily, this will be three years after the calendar year of the letter of intent; (b) If, according to Table 1, the estimated 1985 population density of the service area is in the lowest quartile of Oregon counties, this will be five years; (c) If the population density is in the second quartile, this will be four years; (d) If the data available from the central offices of the state agencies utilizing nursing home care in the service area meet the following criteria, then the indicated times in subsections (a), (b) and (c) of this section will be shortened by one year: (A) Utilization of nursing home care in the service area by state agencies has decreased during the most recent 12 months; (B) Utilization of alternative care in the service area by state agencies has increased, correspondingly, in the most recent 12 months; (C) Projections and plans for utilization of nursing home care in the service area, and for alternative care, by state agencies, indicate stabilization or continuance of the trends in paragraphs (A) and (B) of this subsection, respectively. (11) Construct table for analysis of need: (a) Provide a column for each of the five years starting with the letter of intent year; (b) Provide a row for the service area population age 65 and over for each year, estimated in section (2) of this rule; (c) Provide a row for each of the following possible use-rates: (A) The 1980 service area bed supply per 1,000 persons age 65 and over, based on Table 2; (B) The upper and lower bed supply objectives from Table 3 for the year identified in section (10) of this rule; (C) The most recent use-rate identified in section (4) of this rule, divided by 365; (D) The use-rate based on a projection of the use-rates for the last 10 years, divided by 365; (E) If the series of use rates in section (4) of this rule shows a maximum or a minimum year prior to the most recent year, the use-rate based on a projection of the use-rates for the years starting with that maximum or minimum year, divided by 365; (F) Standard bed supply figures of 30, 35, 40, and 45 nursing home beds per 1,000 persons age 65 and over. (d) Review prior years’ bed supply as tabulated in section (5) of this rule in order to determine whether the rates projected in paragraphs (c)(D) and (E) of this section reflect changes in utilization with constant bed supply, or changes in utilization correlated with changes in bed supply. If the latter is the case, calculate alternative projections for paragraphs (c)(D) and (E) of this section; (e) Review performance and plans of state agencies utilizing nursing home and alternative care, as obtained for section (10) of this rule, in order to determine whether alternatives to the projections in paragraphs (c)(C), (D) and (E) of this section, adjusted numerically because of the performance and the plans, would lead to different projected rates and should also be tabulated. (12) Complete table for analysis of need: Fill in the table constructed in section (11) of this rule by multiplying the estimated service area population age 65 and over (second row), for each year, by the various flat, projected and adjusted use-rates indicated in subsections (11)(c), (d) and (e) of this rule. For each use-rate based projection (those based on the assumptions in paragraphs (11)(c)(C), (D) and (E) of this rule), divide the result of this multiplication by 0.95, in order to assume 95 percent occupancy. (13) Evaluate impact of application: Add the requested beds to the existing future inventory in section (9) of this rule. Compare the result to the column of the table completed in section (12) of this rule for the year selected in section (10) of this rule, and to the bed need indicated for that year in a county or service area plan, if available, that meets the criteria of section (14) of this rule. (14) Service area plans: For use in analysis by the division, a county or service area plan must meet the following criteria: (a) Satisfy the service area definition in section (1) of this rule; (b) Cover a time period, year-by-year, of at least five years, projecting: (A) Nursing home caseloads; and (B) Alternative care caseloads. (c) Be within the yearly upper limits on service area bed supply established by application of section (10) and paragraph (11)(c)(B) of this rule, unless an analysis under subsection (16)(b) of this rule demonstrates that higher limits are justified; (d) Be prepared by the local area agency on aging and/or the state Seniors and People with Disabilities Division, and approved by the Seniors and People with Disabilities Division. (15) Compare application to state goals: (a) If a service area plan as defined in section (14) of this rule is available, the applicant is expected to demonstrate consistency with that plan and justify any inconsistencies; (b) If there is no service area plan as defined in section (14) of this rule, then, depending on the relationship of the impact of the application on bed supply to the upper and lower bed supply objectives identified in paragraph (11)(c)(B), subsections (c), (d) or (e) of this section will apply; (c) If approval of the application would result in: (A) More beds than the 1980 ratio identified in Table 2, if that ratio is above the lower limit identified in paragraph (11)(c)(B) of this rule; or (B) More beds than the upper limit identified in paragraph (11)(c)(B) of this rule; or (C) Addition of beds in a service area which includes all or part of any county which is in the highest quartile of beds per 1,000 persons age 65 and over (see Table 2, or subsequent annual revisions as available), then the applicant is expected to demonstrate under subsection (16)(b) of this rule that, by the calendar year identified for paragraph (11)(c)(B) of this rule, there are no feasible long-term care alternatives to an increase in nursing home beds. (d) If none of paragraphs (c)(A), (B) or (C) of this section are the case, and the approval of the application would result in: (A) Maintaining the 1980 ratio identified in Table 2, if that ratio is above the lower limit identified in paragraph (11)(c)(B) of this rule but below the upper limit; or (B) Falling below that ratio, but above the lower limit identified in paragraph (11)(c)(B) of this rule, then the applicant is expected to show that alternative care capacity in the locality has not been increasing; that nursing home utilization has not been decreasing; and there is no reasonable expectation that these utilization rates would change in those respective directions prior to the year determined in section (10) of this rule. Alternatively, applicants whose projects fall into one of the categories of this subsection may demonstrate need under the criteria specified in subsection (16)(b) of this rule. (e) If neither subsection (c) nor (d) of this section is the case, then approval of the application would result in increasing the 1980 ratio identified in Table 2, up to or closer to the lower limit identified in paragraph (11)(c)(B) of this rule. In this case, the applicant is expected to inventory the alternative capacity and utilization in the locality and to indicate the criteria under which the nursing home will refer prospective patients to each alternative rather than admit them to the nursing home. (16) Justification of bed capacity above state goals: (a) If the criteria in subsection (15)(a), (d) or (e) of this rule apply and are satisfied, beds in the service area may be added or relocated provided all criteria specified in OAR 333-580-0040 through 333-580-0060 are met; (b) If subsection (15)(c) of this rule applies, then the applicant must demonstrate that there are no feasible long-term care alternatives in the service area by the calendar year identified in paragraph (11)(c)(B) of this rule by demonstrating that at least one of the following conditions exist: (A) Applicant must show that superior and accessible alternatives to the proposed added or relocated beds, in terms of appropriateness, efficiency, effectiveness or cost, have not been developed, and cannot be developed by this provider or another potential provider in time to meet needs, or would not be financially feasible; or have insufficient capacity, which could not be expanded in time to meet needs, or expansion is not financially feasible; (B) Applicant may show that utilization of service area nursing home beds by persons under age 65 (mentally or emotionally disturbed, mentally retarded or developmentally disabled, alcohol or drug dependent, or physically handicapped) is occurring in numbers greater than 15 percent of the service area nursing home average daily census. This may justify adding or relocating beds under subsection (15)(c) of this rule to the extent that the placements are appropriate under the authorization criteria of the central offices of the state Department of Human Services; (C) Applicant must show that the efficiency and appropriateness of utilization of existing nursing home beds and alternatives in the service area is as high as can be expected; (D) Applicant must show that persons for whom nursing home care is necessary would experience serious problems in terms of availability, accessibility and cost in obtaining such care without the added or relocated beds; (E) If proposal involves either permanent or “swing” utilization of hospital beds as long-term care beds, and subsection (15)(c) of this rule applies, applicant must present a justification consistent with paragraphs (A) to (D) of this subsection; (F) If subsection (15)(c) of this rule applies, applicant may demonstrate need by showing that there is provider commitment to phase out (close, or convert to other uses) sufficient presently existing, specific beds so as to bring the local level of nursing home capacity back below the limit at which subsection (15)(c) of this rule would apply for future years, within 12 months after the projected opening of beds if the application is approved. [ED. NOTE: Tables & Publications referenced are available from the agency.] Statutory/Other Authority: ORS 431.120(6) & 442.315 Statutes/Other Implemented: ORS 431.120(6) & 442.315 History: HD 13-1994, f. & cert. ef. 4-22-94