[Federal Register Volume 85, Number 124 (Friday, June 26, 2020)]
[Rules and Regulations]
[Pages 38323-38325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13090]
[[Page 38323]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 232
[Docket No. FR 6022-F-02]
RIN 2502-AJ46
Federal Housing Administration (FHA): Section 232 Healthcare
Facility Insurance Program--Updating Section 232 Program Regulations
for Memory Care Residents
AGENCY: Office of the Assistant Secretary for Housing, HUD.
ACTION: Final rule.
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SUMMARY: This final rule updates the requirements for the location of
bathrooms in board and care and assisted living facilities insured
under HUD's Section 232 program, which insures mortgage loans to
facilitate the construction, substantial rehabilitation, purchase, and
refinancing of nursing homes, intermediate care facilities, board and
care homes, and assisted-living facilities. The rule will allow
providers to configure the facilities to meet the needs of memory care
residents and allow for flexibility of the bathroom requirement when
financing or refinancing existing facilities. This final rule follows
publication of a September 13, 2019 proposed rule and takes into
consideration the public comments received on the proposed rule.
DATES: Effective Date: This final rule is effective July 27, 2020.
FOR FURTHER INFORMATION CONTACT: John M. Hartung, Director, Policy,
Risk Analysis & Lender Relations Division, Office of Residential Care
Facilities, Office of Healthcare Programs, Office of Housing,
Department of Housing and Urban Development, 1222 Spruce Street, St.
Louis, MO 63103-2836; telephone number 314-418-5238 (this is not a
toll-free number). Persons with hearing or speech impairments may
access this number through TTY by calling the toll-free Federal Relay
Service at 800-877-8339 (this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background--HUD's September 13, 2019 Proposed Rule
Under Section 232, 223(a)(7), and 223(f) of the National Housing
Act (12 U.S.C. 1715w 12 U.S.C. 1715n(a)(7), and 12 U.S.C. 1715n (f)(4),
respectively), FHA insures mortgages to finance the purchase or
refinance of nursing homes, intermediate care facilities, board and
care homes, and assisted living facilities (collectively, residential
healthcare facilities). On September 13, 2019, HUD published a proposed
rule in the Federal Register, at 84 FR 48321,\1\ to revise the current
regulation governing the Section 232 program. The proposed rule sought
to amend the bathroom requirements to meet the needs of memory care
residents. Memory care residents are those patients in assisted living
or board and care settings that have cognitive impairments, such as
Alzheimer's disease and other dementias who require care in a secure
setting.
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\1\ HUD also published a September 26, 2019 proposed rule
supplement, 84 FR 50805, correcting certain references in the
September 13, 2019 proposed rule publication.
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As described in the proposed rule, memory care residents are a
significant and growing proportion of the residential healthcare
facilities population.\2\ Facilities must accommodate residents'
cognitive and physical impairments, and appropriate design enhances the
health and safety of persons with Alzheimer's disease or other forms of
dementia. For insured facilities, HUD's Section 232 regulation requires
a specific number of bathrooms per residents and specifies the physical
configuration of a board and care home or an assisted living facility,
prohibiting configurations where the access path from a bedroom to a
bathroom passes through a public area. HUD's proposed rule, therefore,
proposed revising the regulation to add flexibility for financing
existing residential healthcare facilities where complying with Sec.
232.7 requirements for number or configuration of bathrooms is not
practicable or would not adequately serve memory care residents. This
change would enable existing residential healthcare facilities that
currently serve memory care residents to obtain Section 232
refinancing.
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\2\ See, Background on memory care residents at 84 FR 48321-
48322.
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Specifically, HUD proposed an exemption from the current
requirement for one full bathroom for every four residents, and from
the current prohibition on bathroom access that passes through a public
corridor or area. Additional details about the proposed rule may be
found at 84 FR 48321 (September 12, 2019).
II. Final Rule
This final rule adopts the proposed rule without change. The final
rule provides an exemption from the current requirement of one full
bathroom for every four residents, and from the current prohibition on
bathroom access that passes through a public corridor or area, only for
memory care facilities whose financing is being insured pursuant to
Section 223(f) or 223(a)(7) of the National Housing Act, and only when
four considerations are satisfied: (1) Memory care residents must
reside in a separate, secured, and locked area of the board and care
home or assisted living facility; (2) any bathroom access from a memory
care resident's bedroom or sleeping area that passes through a public
corridor or area must be in that separate, secured, and locked area of
the board and care home or assisted living facility; (3) memory care
residents of such areas require full assistance or supervision when
bathing; and (4) wards serving memory care residents have no more than
two beds per unit and a half-bath in each unit. This exemption would
not apply to new construction or substantial rehabilitation insured
under Section 232, and those projects must continue to follow the long-
standing bathroom requirements for board and care home or assisted
living units.
This final rule does not change the requirement in Sec. 232.2 that
all facilities must still comply with any applicable Federal, State or
local standards and requirements, including requirements specific to
memory care facilities.\3\
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\3\ Federal civil rights statutes and regulations also contain
accessibility and nondiscrimination requirements that apply,
including regulations under the Fair Housing Act (24 CFR part 100),
the Americans with Disabilities Act (28 CFR parts 35 (Title II) and
36 (Title III)), and Section 504 of the Rehabilitation Act (24 CFR
part 8), as applicable.
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III. Discussion of Public Comments Received on September 13, 2019,
Proposed Rule
The public comment period for the rule closed on November 12, 2019.
HUD received two public comments in response to the proposed rule.
These comments were submitted by a private citizen and an independent
living specialist who works with the residential healthcare facility
industry. Commenters were generally supportive of HUD's rule, but one
commenter recommended the rule be expanded to address the Section 232
program as it relates to other Federal and State programs and
requirements, particularly Medicaid. The commenter requested that HUD
work with the Department of Health and Human Services, Centers for
Medicare and Medicaid Services (CMS) and States to implement CMS
requirements for settings that are eligible for reimbursement for
Medicaid home and community-based services. The commenter also
requested that HUD clarify whether Medicaid enrollees will be able to
use HUD programs to pay fair market rent or participate in rental
[[Page 38324]]
assistance; and that HUD should address institutional bias related to
Medicaid and housing systems. While HUD appreciates the comments, this
final rule is limited to removing an impediment to providing needed
mortgage insurance for existing memory care facilities.
IV. Findings and Certifications
Regulatory Review--Executive Orders 12866 and 13563
Under Executive Order 12866 (Regulatory Planning and Review), a
determination must be made by the Office of Management and Budget
regarding whether a regulatory action is significant and therefore
subject to review in accordance with the requirements of the order.
Executive Order 13563 (Improving Regulations and Regulatory Review)
directs executive agencies to analyze regulations that are ``outmoded,
ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been
learned.'' Executive Order 13563 also directs that, where relevant,
feasible, and consistent with regulatory objectives, and to the extent
permitted by law, agencies are to identify and consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public. This rule allows additional flexibility for the
financing of residential healthcare facilities.
Executive Order 13771
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017. This
final rule is expected to be an Executive Order 13771 deregulatory
action by providing additional flexibility for healthcare facilities,
as discussed above.
Environmental Review
A Finding of No Significant Impact (FONSI) with respect to the
environment was made prior to publication of the proposed rule, in
accordance with HUD regulations at 24 CFR part 50, which implement
Section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332(2)(C)). The FONSI remains applicable, and is available for
public inspection between the hours of 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500. Due to security measures at the HUD
Headquarters building, please schedule an appointment to review the
FONSI by calling the Regulations Division at 202-708-3055 (this is not
a toll-free number). Individuals with speech or hearing impairments may
access this number via TTY by calling the Federal Relay Service at 800-
877-8339.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1531-
1538) establishes requirements for Federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and on the private sector. This final rule does not impose
any Federal mandate on any state, local, or tribal government, or on
the private sector, within the meaning of UMRA.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
HUD believes that this final rule imposes no additional
requirements on small businesses. Currently, HUD has a total of 3,738
residential healthcare facilities in its portfolio and completes
approximately 300 firm commitments each year for 223(f) and 223(a)(7)
refinances. HUD is providing waivers on 3 percent of those applications
and waiver requests continue to increase. As noted in the preamble of
the final rule, applicants have advised that the requirement regarding
the number and location of bathrooms presented barriers to properly
serving memory care residents, who need specialized support. HUD
believes this final rule will resolve the inadequacy of the current
bathroom requirements, thus, easing the existing burden on those
entities seeking to accommodate memory care residents and entities
seeking to finance or refinance facilities. Additionally, both owners,
small and large, and memory care residents will benefit from the
opportunity to finance their facility in compliance with this new
framework.
Accordingly, the undersigned certifies that this final rule will
not have a significant economic impact on a substantial number of small
entities.
Executive Order 13132, Federalism
Executive Order 13132 (entitled ``Federalism'') prohibits to the
extent practicable and permitted by law, an agency from publishing any
rule that has federalism implications if the rule either imposes
substantial direct compliance costs on state and local governments and
is not required by statute, or preempts state law, unless the relevant
requirements of Section 6 of the Executive Order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on state and local governments or preempt state
law within the meaning of the Executive Order.
Congressional Review of Final Rules
The Office of Information and Regulatory Affairs has determined
that this final rule is not a major rule, as defined by 5 U.S.C. 804,
for purposes of congressional review of agency rulemaking pursuant to
the Congressional Review Act, Public Law 104-121, sec. 251, 110 Stat.
868, 873 (codified at 5 U.S.C. 804). This rule will not result in an
annual effect on the economy of $100 million or more; a major increase
in costs or prices; or significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based companies to compete with foreign-based companies in
domestic and export markets.
Catalogue of Federal Domestic Assistance
The Catalogue of Federal Domestic Assistance Number for the
Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board
and Care Homes and Assisted Living Facilities is 14.129.
List of Subjects in 24 CFR Part 232
Fire prevention, Health facilities, Loan programs--health, Loan
programs--housing and community development, Mortgage insurance,
Nursing homes, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated above, HUD amends 24 CFR part
232 as follows:
PART 232--MORTGAGE INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE
FACILITIES, BOARD AND CARE HOMES, AND ASSISTED LIVING FACILITIES
0
1. The authority citation for 24 CFR part 232 continues to read as
follows:
Authority: 12 U.S.C. 1715b; 1715w; 1735d, and 1735f-19; 42
U.S.C. 3535(d).
0
2. Revise Sec. 232.7 to read as follows:
Sec. 232.7 Bathroom.
(a) General requirement. For a board and care home or assisted
living facility to be eligible for insurance under this part:
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(1) The board and care home or assisted living facility must have
no less than one full bathroom provided for every four residents; and
(2) Bathroom access from any bedroom or sleeping area must not pass
through a public corridor or area.
(b) Exemption for existing projects providing memory care. The
following applies to a board and care home or assisted living facility
that provides housing for residents in need of memory care, i.e., care
for residents who have cognitive impairments, such as Alzheimer's
disease or other dementias:
(1) Subject to paragraph (b)(2) of this section, a project seeking
insurance under subpart E, pursuant to section 223(f) or 223(a)(7) of
the National Housing Act, may be eligible for insurance without meeting
the general requirement in paragraph (a) of this section, if the
project meets the following four requirements:
(i) Memory care residents are in a separate, secured, and locked
area of the board and care home or assisted living facility;
(ii) Any bathroom access from a memory care resident's bedroom or
sleeping area that passes through a public corridor or area is in a
separate, secured, and locked area of the board and care home or
assisted living facility prescribed in (b)(1)(i) of this section;
(iii) Memory care residents receive full assistance or supervision
while bathing; and
(iv) Memory care residents reside in wards that contain no more
than two beds per unit and have a half-bath in each unit.
(2) If a facility serving memory care residents also serves
residents who are not in a separate, secured, and locked area of the
board and care home or assisted living facility, this exemption applies
only to the separate, secured, and locked area in which solely memory
care residents reside.
Dated: June 11, 2020.
Brian D. Montgomery,
Deputy Secretary.
[FR Doc. 2020-13090 Filed 6-25-20; 8:45 am]
BILLING CODE 4210-67-P