Engrossed Committee Substitute
House Bill 2272 History
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ENGROSSED
COMMITTEE SUBSTITUTE
FOR
H. B. 2272
(By Delegates P. White, H. White and L. White)
(Originating in the House Committee on Finance)
[March 19, 1993]
A BILL to amend and reenact sections three and six, article
two-d, chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
certificates of need; and setting criteria for certificate
of need review for additional ventilator beds in health care
facilities.
Be it enacted by the Legislature of West Virginia:
That sections three and six, article two-d, chapter sixteen
of the code of West Virginia, one thousand nine hundred thirty-
one, as amended, be amended and reenacted, all to read as
follows:
ARTICLE 2D. CERTIFICATE OF NEED.
§16-2D-3. Certificate of need.
Except as provided in section four of this article, any new
institutional health service may not be acquired, offered or
developed within this state except upon application for and
receipt of a certificate of need as provided by this article. Whenever a new institutional health service for which a
certificate of need is required by this article is proposed for
a health care facility for which, pursuant to section four of
this article, no certificate of need is or was required, a
certificate of need shall be issued before the new institutional
health service is offered or developed. No person may knowingly
charge or bill for any health services associated with any new
institutional health service that is knowingly acquired, offered
or developed in violation of this article, and any bill made in
violation of this sentence is legally unenforceable. For
purposes of this article, a proposed "new institutional health
service" includes:
(a) The construction, development, acquisition or other
establishment of a new health care facility or health maintenance
organization;
(b) The partial or total closure of a health care facility
or health maintenance organization with which a capital
expenditure is associated;
(c) Any obligation for a capital expenditure incurred by or
on behalf of a health care facility, except as exempted in
section four of this article, or health maintenance organization
in excess of the expenditure minimum or any obligation for a
capital expenditure incurred by any person to acquire a health
care facility. An obligation for a capital expenditure is
considered to be incurred by or on behalf of a health care
facility:
(1) When a contract, enforceable under state law, is entered
into by or on behalf of the health care facility for theconstruction, acquisition, lease or financing of a capital asset;
(2) When the governing board of the health care facility
takes formal action to commit its own funds for a construction
project undertaken by the health care facility as its own
contractor; or
(3) In the case of donated property, on the date on which
the gift is completed under state law;
(d) A substantial change to the bed capacity of a health
care facility with which a capital expenditure is associated;
(e) (1) The addition of health services which are offered
by or on behalf of a health care facility or health maintenance
organization and which were not offered on a regular basis by or
on behalf of such health care facility or health maintenance
organization within the twelve-month period prior to the time
such services would be offered; and
(2) The addition of ventilator services for any nursing
facility bed by any health care facility or health maintenance
organization.
(f) The deletion of one or more health services, previously
offered on a regular basis by or on behalf of a health care
facility or health maintenance organization which deletion is
associated with a capital expenditure;
(g) A substantial change to the bed capacity or health
services offered by or on behalf of a health care facility,
whether or not the change is associated with a proposed capital
expenditure, if the change is associated with a previous capital
expenditure for which a certificate of need was issued and if the
change will occur within two years after the date the activitywhich was associated with the previously approved capital
expenditure was undertaken;
(h) The acquisition of major medical equipment; ~
(i) A substantial change in an approved new institutional
health service for which a certificate of need is in effect. For
purposes of this subdivision "substantial change" shall be
defined by the state agency in regulations adopted pursuant to
section eight of this article.
§16-2D-6. Minimum criteria for certificate of need reviews.
(a) Except as provided in subsections (f) and (g) of section
nine of this article, in making its determination as to whether
a certificate of need shall be issued, the state agency shall, at
a minimum, consider all of the following criteria that are
applicable but in:
Provided,
That in the case of a health
maintenance organization or an ambulatory care facility or health
care facility controlled, directly or indirectly, by a health
maintenance organization or combination of health maintenance
organizations, the criteria considered shall be only those set
forth in subdivision (12) of this subsection:
Provided, however,
That the criteria set forth in subsection twenty-seven of this
section shall apply to all hospitals, nursing homes and health
care facilities when ventilator services are to be provided for
any nursing facility bed.
(1) The recommendation of the designated health systems
agency for the health service area in which the proposed new
institutional health service is to be located;
(2) The relationship of the health services being reviewed
to the state health plan and to the applicable health systemsplan and annual implementation plan adopted by the designated
health systems agency for the health service area in which the
proposed new institutional health service is to be located;
(3) The relationship of services reviewed to the long-range
development plan of the person providing or proposing such
services;
(4) The need that the population served or to be served by
such services has for such services proposed to be offered or
expanded, and the extent to which all residents of the area, and
in particular low income persons, racial and ethnic minorities,
women, handicapped persons, other medically underserved
population, and the elderly, are likely to have access to those
services;
(5) The availability of less costly or more effective
alternative methods of providing such services to be offered,
expanded, reduced, relocated or eliminated;
(6) The immediate and long-term financial feasibility of the
proposal as well as the probable impact of the proposal on the
costs of and charges for providing health services by the person
proposing the new institutional health service;
(7) The relationship of the services proposed to the
existing health care system of the area in which such services
are proposed to be provided;
(8) In the case of health services proposed to be provided,
the availability of resources, including health care providers,
management personnel, and funds for capital and operating needs,
for the provision of the services proposed to be provided and the
need for alternative uses of these resources as identified by thestate health plan, applicable health systems plan and annual
implementation plan;
(9) The appropriate and nondiscriminatory utilization of
existing and available health care providers;
(10) The relationship, including the organizational
relationship, of the health services proposed to be provided to
ancillary or support services;
(11) Special needs and circumstances of those entities which
provide a substantial portion of their services or resources, or
both, to individuals not residing in the health service areas in
which the entities are located or in adjacent health service
areas. Such entities may include medical and other health
professional schools, multidisciplinary clinics and specialty
centers;
(12) To the extent not precluded by subdivision (1),
subsection (f), section nine of this article, the special needs
and circumstances of health maintenance organizations. These
needs and circumstances shall be limited to:
(A) The needs of enrolled members and reasonably anticipated
new members of the health maintenance organization for the health
services proposed to be provided by the organization; and
(B) The availability of the new health services from
nonhealth maintenance organization providers or other health
maintenance organizations in a reasonable and cost-effective
manner which is consistent with the basic method of operation of
the health maintenance organization. In assessing the
availability of these health services from these providers, the
agency shall consider only whether the services from theseproviders:
(i) Would be available under a contract of at least five
years duration;
(ii) Would be available and conveniently accessible through
physicians and other health professionals associated with the
health maintenance organization;
(iii) Would cost no more than if the services were provided
by the health maintenance organization; and
(iv) Would be available in a manner which is
administratively feasible to the health maintenance organization;
(13) The special needs and circumstances of biomedical and
behavioral research projects which are designed to meet a
national need and for which local conditions offer special
advantages;
(14) In the case of a reduction or elimination of a service,
including the relocation of a facility or a service, the need
that the population presently served has for the service, the
extent to which that need will be met adequately by the proposed
relocation or by alternative arrangements, and the effect of the
reduction, elimination or relocation of the service on the
ability of low income persons, racial and ethnic minorities,
women, handicapped persons, other medically underserved
population, and the elderly, to obtain needed health care;
(15) In the case of a construction project: (A) The cost
and methods of the proposed construction, including the costs and
methods of energy provision and (B) the probable impact of the
construction project reviewed on the costs of providing health
services by the person proposing such construction project and onthe costs and charges to the public of providing health services
by other persons;
(16) In the case of health services proposed to be provided,
the effect of the means proposed for the delivery of proposed
health services on the clinical needs of health professional
training programs in the area in which such services are to be
provided;
(17) In the case of health services proposed to be provided,
if such services are to be available in a limited number of
facilities, the extent to which the schools in the area for
health professions will have access to the services for training
purposes;
(18) In the case of health services proposed to be provided,
the extent to which such proposed services will be accessible to
all the residents of the area to be served by such services;
(19) In accordance with section five of this article, the
factors influencing the effect of competition on the supply of
the health services being reviewed;
(20) Improvements or innovations in the financing and
delivery of health services which foster competition, in
accordance with section five of this article, and serve to
promote quality assurance and cost effectiveness;
(21) In the case of health services or facilities proposed
to be provided, the efficiency and appropriateness of the use of
existing services and facilities similar to those proposed;
(22) In the case of existing services or facilities, the
quality of care provided by such services or facilities in the
past;
(23) In the case where an application is made by an
osteopathic or allopathic facility for a certificate of need to
construct, expand, or modernize a health care facility, acquire
major medical equipment, or add services, the need for that
construction, expansion, modernization, acquisition of equipment,
or addition of services shall be considered on the basis of the
need for and the availability in the community of services and
facilities for osteopathic and allopathic physicians and their
patients. The state agency shall consider the application in
terms of its impact on existing and proposed institutional
training programs for doctors of osteopathy and medicine at the
student, internship, and residency training levels;
(24) The special circumstances of health care facilities
with respect to the need for conserving energy;
(25) The contribution of the proposed service in meeting the
health related needs of members of medically underserved
populations which have traditionally experienced difficulties in
obtaining equal access to health services, particularly those
needs identified in the state health plan, applicable health
systems plan and annual implementation plan, as deserving of
priority. For the purpose of determining the extent to which the
proposed service will be accessible, the state agency shall
consider:
(A) The extent to which medically underserved populations
currently use the applicant's services in comparison to the
percentage of the population in the applicant's service area
which is medically underserved, and the extent to which medically
underserved populations are expected to use the proposed servicesif approved;
(B) The performance of the applicant in meeting its
obligation, if any, under any applicable federal regulations
requiring provision of uncompensated care, community service, or
access by minorities and handicapped persons to programs
receiving federal financial assistance, including the existence
of any civil rights access complaints against the applicant;
(C) The extent to which medicare, medicaid and medically
indigent patients are served by the applicant; and
(D) The extent to which the applicant offers a range of
means by which a person will have access to its services,
including, but not limited to, outpatient services, admission by
house staff and admission by personal physician.
(26) The existence of a mechanism for soliciting consumer
input into the health care facility's decision making process.
(b) The state agency may include additional criteria which
it prescribes by regulations adopted pursuant to section eight of
this article.
(c) Criteria for reviews may vary according to the purpose
for which a particular review is being conducted or the types of
health services being reviewed.
(d) An application for a certificate of need may not be made
subject to any criterion not contained in this article or not
contained in regulations adopted pursuant to section eight of
this article.
(e) In the case of any proposed new institutional health
service, the state agency may not grant a certificate of need
under its certificate of need program unless, after considerationof the appropriateness of the use of existing facilities
providing services similar to those being proposed, the state
agency makes, in addition to findings required in section nine of
this article, each of the following findings in writing: (1)
That superior alternatives to such services in terms of cost,
efficiency and appropriateness do not exist and the development
of such alternatives is not practicable; (2) that existing
facilities providing services similar to those proposed are being
used in an appropriate and efficient manner; (3) that in the case
of new construction, alternatives to new construction, such as
modernization or sharing arrangements, have been considered and
have been implemented to the maximum extent practicable; (4) that
patients will experience serious problems in obtaining care of
the type proposed in the absence of the proposed new service; and
(5) that in the case of a proposal for the addition of beds for
the provision of skilled nursing or intermediate care services,
the addition will be consistent with the plans of other agencies
of the state responsible for the provision and financing of long-
term care facilities or services including home health services.
(27) In the case where an application is made by a hospital,
nursing home or other health care facility to provide ventilator
services which have not previously been provided for a nursing
facility bed, the state agency shall consider the application in
terms of the need for the service and whether the cost exceeds
the level of current medicaid services. No facility may provide
a higher level of ventilator service for a nursing facility bed
without demonstrating that the change in level of service by
provision of additional ventilator services will result in noadditional fiscal burden to the state.