Rule Proposal

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VOLUME 49, ISSUE 16
ISSUE DATE: AUGUST 21, 2017
RULE PROPOSALS
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
OFFICE OF THE DIRECTOR

Proposed Amendments: N.J.A.C. 13:45B-13.2 and 13.5

Proposed New Rule: N.J.A.C. 13:45B-13.5A

Click here to view Interested Persons Statement

Definitions; Registration Renewal
 
Authorized By: Steve C. Lee, Director, Division of Consumer Affairs.
 
Authority: N.J.S.A. 34:8-54.
 
Calendar Reference: See Summary below for explanation of exception to calendar requirement.
 
Proposal Number: PRN 2017-201.
 
[page=2760] Submit written comments by October 20, 2017, to:
 
   Steve C. Lee, Director
   State of New Jersey
   Division of Consumer Affairs
   Office of the Director
   PO Box 45027
   Newark, New Jersey 07101
   or electronically at: http://www.njconsumeraffairs.gov/Proposals/Pages/default.aspx.
 
The agency proposal follows:
 
Summary

P.L. 2014, c. 29, establishes that companion services, which are non-medical, basic supervision and socialization services, may be offered by registered health care service firms only. The law requires that health care service firms obtain accreditation from an accrediting body recognized by the Department of Human Services as a prerequisite of registration with the Division of Consumer Affairs (Division). Health care service firms must also submit an audit to the Division every three years. The Division proposes to amend N.J.A.C. 13:45B-13.2 and 13.5 and proposes new N.J.A.C. 13:45B-13.5A in order to effectuate the requirements of P.L. 2014, c. 29.

The proposed amendments to N.J.A.C. 13:45B-13.2 provide a definition for "companion services" and amend the definition of "health care service firm" to clarify that companion services are only to be offered by registered health care service firms. The proposed amendments to N.J.A.C. 13:45B-13.5 require health care service firms renewing registration to submit evidence that they are accredited by an entity recognized by the Department of Human Services as an accrediting body for homemaker agencies participating in the Medicaid program. Such entities are set forth in N.J.A.C. 10:60-1.2. In order to provide adequate time to obtain accreditation, health care service firms that obtain initial registration less than 12 months prior to the renewal date will not be required to meet the accreditation requirement for the first registration renewal. If a health care service firm loses accreditation, it will be required to notify the Division within 10 days.

Proposed new N.J.A.C. 13:45B-13.5A requires health care service firms to submit an audit to the Division every three years as part of its application to renew registration. The required audit consists of two parts, one evaluating the health care service firm's compliance with laws and rules and one evaluating its financial status. The audit must be conducted by a licensed certified public accountant and must include a report regarding internal controls and management practices.

As the Division has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.
 
Social Impact

The Division anticipates that the proposed amendments and new rule will have a positive impact on society in that health care service firms will be required to meet the accreditation standards of recognized accrediting bodies. This will help to protect consumers by ensuring that health care service firms are adequately prepared to provide services in a safe and effective manner.
 
Economic Impact

The proposed amendments and new rule will have a significant economic impact on health care service firms. The average annual fee for accreditation, which every health care service firm will be required to pay, is approximately $ 2,500. Health care service firms will also incur costs in preparing an audit for submission to the Division every three years. This will also have a significant impact on agencies that only provide companion services as they are now required to register with the Division as a health care service firm and be regulated by the State.
 
Federal Standard Statement

A Federal standards analysis is not required because there are no Federal laws or standards applicable to the proposed amendments or new rule.
 
Jobs Impact

The Division does not believe that the proposed amendments and new rule will either increase or decrease the number of jobs in New Jersey.
 
Agriculture Industry Impact

The Division does not expect the proposed amendments and new rule to have any impact on the agriculture industry in the State.
 
Regulatory Flexibility Analysis

Health care services firms may be considered "small businesses" for the purposes of the Regulatory Flexibility Act (Act), N.J.S.A. 52:14B-16 et seq. The costs imposed on small businesses by the proposed amendments and new rule are the same as those imposed on all businesses as outlined in the Economic Impact above. Health care service firms will be required to employ the professional services of a licensed public accountant in order to comply with auditing requirements. The proposed amendments and new rule impose no recordkeeping requirements, but do impose compliance and reporting requirements as discussed in the Summary above.

As the proposed amendments and new rule help to ensure that health care service firms are adequately prepared to offer services in a safe and effective manner, the Division believes that the proposed amendments and new rule must be uniformly applied to all health care service firms and no exemptions are provided based on the size of a business.
 
Housing Affordability Impact Analysis

The proposed amendments and new rule will have an insignificant impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the proposed new rule and amendments would evoke a change in the average costs associated with housing because the proposed amendments and new rule concern registration requirements for health care service firms.
 
Smart Growth Development Impact Analysis

The proposed amendments and new rule will have an insignificant impact on smart growth and there is an extreme unlikelihood that the proposed new rule and amendments would evoke a change in housing production in Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan in New Jersey because the proposed amendments and new rule concern registration requirements for health care service firms.
 
Full text of the proposal follows (additions indicated in boldface thus; deletion indicated in brackets [thus]):
 
SUBCHAPTER 13.  HEALTH CARE SERVICE FIRMS
 
13:45B-13.2  Definitions
 
As used in this subchapter, the following terms shall have the following meanings unless the context clearly indicates otherwise:
 
"Companion services" means non-medical, basic supervision and socialization services that do not include assistance with activities of daily living and that are provided in an individual's home. "Companion services" may include the performance of household chores.
 
"Health care service firm" means any person who operates a firm that employs individuals directly or indirectly for the purpose of assigning the employed individuals to provide health care, [or] personal care, or companion services either directly in the home or at a care-giving facility, and who, in addition to paying wages or salaries to the employed individuals while on assignment, pays or is required to pay Federal social security taxes and State and Federal unemployment insurance; carries or is required to carry worker's compensation insurance; and sustains responsibility for the action of the employed individuals while they render health care services.
 
. . .
 
13:45B-13.5  Registration renewal
 
(a) (No change.)
 
(b)Commencing with the first registration renewal after (12 months after the effective date of this amendment), and for every succeeding renewal, a health care service firm shall submit evidence that it is accredited by an accrediting body recognized by the [page=2761] Department of Human Services as an accrediting body for homemaker agencies participating in the Medicaid program, as set forth in N.J.A.C. 10:60-1.2.
 
(c) Notwithstanding (b) above, a health care service firm that obtained its initial registration less than 12 months prior to renewal of registration shall not be required to submit evidence of accreditation when renewing registration for the first time.
 
(d) If a health care service firm is no longer accredited as required under (b) above, either because of failure to renew accreditation or through actions taken by the accrediting body, the health care service firm shall notify the Division within 10 days of losing accreditation.
 
13:45B-13.5A   Audits
 
(a) Commencing (three years from the effective date of this rule), and every third year from that date, a health care service firm shall submit an audit to the Division that complies with the requirements of (b) below as part of the renewal of registration required under N.J.A.C. 13:45B-13.5.
 
(b) The audit required by (a) above shall:
 
1. Be conducted by a certified public accountant licensed in New Jersey and shall encompass an examination of the health care service firm's financial records, financial statements, the general management of its operations, and its internal control systems;
 
2. Include an audit report with an unqualified opinion and shall be accompanied by any management letters prepared by the auditor in connection with the audit commenting on the internal controls or management practices of the health care service firm; and
 
3. Be divided into two components of which:
 
i. One is a compliance component that evaluates the health care service firm's compliance with laws and rules governing health care service firms; and
 
ii. One is a financial component that includes an audit of the financial statements and accompanying notes, as specified in the Statements on Auditing Standards issued by the American Institute of Certified Public Accountants.