H. B. 2714
(By Mr. Speaker, Mr. Kiss and Delegate Ashley)
[Introduced January 14, 1998; referred to the
Committee on Government Organization.]
A BILL to amend and reenact sections one, two, four and five,
article two-d, chapter sixteen of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all
relating to the West Virginia health care cost review
authority and certificates of need.
Be it enacted by the Legislature of West Virginia:
That sections one, two, four and five, article two-d,
chapter sixteen of the code of West Virginia be amended and
reenacted, all to read as follows:
ARTICLE 2D. CERTIFICATE OF NEED.
§16-2D-1. Legislative findings.
It is declared to be the public policy of this state:
(1) That the offering or development of all new institutional
health services shall be accomplished in a manner which is orderly, economical and consistent with the effective development
of necessary and adequate means of providing for the
institutional health services of the people of this state and to
avoid unnecessary duplication of institutional health services,
and to contain or reduce increases in the cost of delivering
institutional health services.
(2) That the general welfare and protection of the lives,
health and property of the people of this state require that the
type, level,
cost and quality of care, the feasibility of
providing such care and other criteria as provided for in this
article,
or by the state health planning and development agency
pursuant to provisions of this article, as needed in new
institutional health services within this state be subject to
review and evaluation before any new institutional health
services are offered or developed in order that appropriate and
needed institutional health services are made available for
persons in the area to be served.
§16-2D-2. Definitions.
Definitions of words and terms defined in articles five-f and
twenty-nine-b of this chapter are incorporated in this section
unless this section has different definitions.
As used in this article, unless otherwise indicated by the
context:
(a) "Affected person" means:
(1) The applicant;
(2) An agency or organization representing consumers;
(3) Any individual residing within the geographic area served
or to be served by the applicant;
(4) Any individual who regularly uses the health care
facilities within that geographic area;
(5) The health care facilities which provide services similar
to the services of the facility under review and which will be
significantly affected by the proposed project;
(6) The health care facilities which, prior to receipt by the
state agency of the proposal being reviewed, have formally
indicated an intention to provide similar services in the future;
(7) Third-party payors who reimburse health care facilities
similar to those proposed for services;
(8) Any agency which establishes rates for health care
facilities similar to those proposed; or
(9) Organizations representing health care providers.
(b) "Ambulatory health care facility" means a
free-standing
facility
which is free-standing and not physically attached to a
health care facility and which that provides health care to
noninstitutionalized and nonhomebound persons on an outpatient
basis.
For purposes of this definition, a free-standing facility is not located on the campus of an existing health care facility.
This definition does not include the private office practice of
any one or more health professionals licensed to practice in this
state pursuant to the provisions of chapter thirty of this code:
Provided, That
such this exemption from review
of private office
practice shall not be construed to include such practices where
major medical equipment otherwise subject to review under the
provisions of this article is acquired, offered or developed:
Provided, however, That
such this exemption from review
of
private office practice shall not be construed to include certain
health services otherwise subject to review under the provisions
of subdivision (1), subsection (a), section four of this article.
(c) "Ambulatory surgical facility" means a
free-standing
facility
which is free-standing and not physically attached to a
health care facility and which that provides surgical treatment
to patients not requiring hospitalization.
For purposes of this
definition, a free-standing facility is not physically attached
to a health care facility. This definition does not include the
private office practice of any one or more health professionals
licensed to practice surgery in this state pursuant to the
provisions of chapter thirty of this code:
Provided, That
such
this exemption from review
of private office practice shall not
be construed to include
such practices where major medical equipment otherwise subject to review under the provisions of
this article is acquired, offered or developed:
Provided,
however, That
such this exemption from review
of private office
practice shall not be construed to include
certain health
services otherwise subject to review under the provisions of
subdivision (1), subsection (a), section four of this article.
(d) "Applicant" means: (1) The governing body or the person
proposing a new institutional health service who is, or will be,
the health care facility licensee wherein the new institutional
health service is proposed to be located; and (2) in the case of
a proposed new institutional health service not to be located in
a licensed health care facility, the governing body or the person
proposing to provide such new institutional health service.
Incorporators or promoters who will not constitute the governing
body or persons responsible for the new institutional health
service may not be an applicant.
(e) "Bed capacity" means the number of beds
for which a
license is issued licensed to a health care facility, or
if a
facility is unlicensed, the number of adult and pediatric beds
permanently staffed and maintained for immediate use by
inpatients in patient rooms or wards
in an unlicensed facility.
(f) "Campus" means the adjacent grounds and buildings, or
grounds and buildings not separated by more than a public right-of-way, of a health care facility.
(f) (g) "Capital expenditure" means:
an expenditure:
(1)
Made An expenditure made by or on behalf of a health care
facility
and
(2) (A) which
(A) (i) under generally accepted accounting
principles is not properly chargeable as an expense of operation
and maintenance, or (ii) is made to obtain either by lease or
comparable arrangement any facility or part thereof or any
equipment for a facility or part; and (B) which (i) exceeds the
expenditure minimum, or (ii) is a substantial change to the bed
capacity
which of the facility with respect to which the
expenditure is made, or (iii) is a substantial change to the
services of such facility;
or For purposes of subparagraph (i),
paragraph (B), subdivision (2) of this definition, the cost of
any studies, surveys, designs, plans, working drawings,
specifications, and other activities, including staff effort and
consulting and other services, essential to the acquisition,
improvement, expansion, or replacement of any plant or equipment
with respect to which an expenditure described in paragraph (B),
subdivision (2) of this definition is made shall be included in
determining if such expenditure exceeds the expenditure minimum.
Donations.
(2) The donation of equipment or facilities to a health care facility, which if acquired directly by such facility would be
subject to review;
or shall be considered capital expenditures,
and a
(3) The transfer of equipment or facilities for less than
fair market value
shall be considered a capital expenditure for
purposes of such subdivisions if
a the transfer of the equipment
or facilities at fair market value would be subject to review;
or
(4) A series of expenditures,
each less than the expenditure
minimum, which when taken together are in excess of the
expenditure minimum, may be if the sum total exceeds the
expenditure minimum and if determined by the state agency to be
a single capital expenditure subject to review. In making
its
this determination, the state agency shall consider: Whether the
expenditures are for components of a system which is required to
accomplish a single purpose; whether the expenditures are to be
made over a two-year period and are directed towards the
accomplishment of a single goal within the health care
facilitys
facility's long-range plan; or whether the expenditures are to be
made within a two-year period within a single department such
that they will constitute a significant modernization of the
department.
(g) (h) "Expenditure minimum" means
seven hundred fifty
thousand one million dollars
per fiscal year. and includes the cost of any studies, surveys, designs, plans, working drawings,
specifications and other activities, including staff effort and
consulting and other services essential to the acquisition,
improvement, expansion or replacement of any plant or equipment.
(h) (i) "Health," used as a term, includes physical and
mental health.
(i) (j) "Health care facility"
is defined as including means
a publicly or privately owned facility, agency or entity that
offers or provides health care services, whether a for-profit or
nonprofit entity and whether or not licensed, or required to be
licensed, in whole or in part and includes, but is not limited
to, hospitals, skilled nursing facilities, kidney disease
treatment centers, including free-standing hemodialysis units,
intermediate care facilities, ambulatory health care facilities,
ambulatory surgical facilities, home health agencies, hospice
agencies, rehabilitation facilities and health maintenance
organizations; community mental health and mental retardation
facilities.
whether under public or private ownership, or as a
profit or nonprofit organization and whether or not licensed or
required to be licensed in whole or in part by the state. For
purposes of this definition, "community mental health and mental
retardation facility" means a private facility which provides
such comprehensive services and continuity of care as emergency, outpatient, partial hospitalization, inpatient
and or
consultation and education for individuals with mental illness,
mental retardation or drug or alcohol addiction.
(j) (k)"Health care provider" means a person, partnership,
corporation, facility,
hospital or institution licensed or
certified or authorized by law to provide professional health
care service in this state to an individual during that
individual's medical,
remedial, or behavioral health care,
treatment or confinement.
(k) (l)"Health maintenance organization" means a public or
private organization, organized under the laws of this state,
which:
(1) Is a qualified health maintenance organization under
Section 1310(d) of the Public Health Service Act, as amended,
Title 42 United States Code Section 300e-9(d); or
(2) (A) Provides or otherwise makes available to enrolled
participants health care services, including substantially the
following basic health care services: Usual physician services,
hospitalization, laboratory, X ray, emergency and preventive
services and out-of-area coverage; and
(B) Is compensated except for copayments for the provision of
the basic health care services listed in paragraph (A),
of this
subdivision
(2), subsection (k) of this definition to enrolled participants on a predetermined periodic rate basis without
regard to the date the health care services are provided and
which is fixed without regard to the frequency, extent or kind of
health service actually provided; and
(C) Provides physicians' services
primarily (i) directly
through physicians who are either employees or partners of
such
the organization, or (ii) through arrangements with individual
physicians or one or more groups of physicians organized on a
group practice or individual practice basis.
(l) (m) "Health services" means clinically related
preventive, diagnostic, treatment or rehabilitative services,
including alcohol, drug abuse and mental health services.
(m) (n) "Home health agency"
is means an organization
primarily engaged in providing professional nursing services
either directly or through contract arrangements and at least one
of the following services: Home health aide services, other
therapeutic services, physical therapy, speech therapy,
occupational therapy, nutritional services or medical social
services to persons in their place of residence on a part-time or
intermittent basis.
(n) (o) "Hospice agency" means a private or public agency or
organization licensed in West Virginia for the administration or
provision of hospice care services to terminally ill persons in such persons' temporary or permanent residences by using an
interdisciplinary team, including, at a minimum, persons
qualified to perform nursing, social work services, the general
practice of medicine or osteopathy and pastoral or spiritual
counseling.
(o) "Hospital" means an institution which is primarily
engaged in providing to inpatients, by or under the supervision
of physicians, diagnostic and therapeutic services for medical
diagnosis, treatment, and care of injured, disabled or sick
persons, or rehabilitation services for the rehabilitation of
injured, disabled or sick persons. This term also includes
psychiatric and tuberculosis hospitals.
(p) "Hospital" means a facility subject to licensure as such
under the provisions of article five-b of this chapter; and any
acute care facility operated by the state government which is
primarily engaged in providing to inpatients, by or under the
supervision of physicians, diagnostic and therapeutic services
for medical diagnosis, treatment and care of injured, disabled or
sick persons. This term also includes psychiatric and
tuberculosis hospitals;
(p) (q) "Intermediate care facility means an institution
which provides, on a regular basis, health-related care and
services to individuals who do not require the degree of care and treatment which a hospital or skilled nursing facility is
designed to provide, but who, because of their mental or physical
condition, require health-related care and services above the
level of room and board.
(q) (r) Long-range plan" means a document formally adopted
by the legally constituted governing body of an existing health
care facility or by a person proposing a new institutional health
service. Each long-range plan shall consist of the information
required by the state agency in regulations adopted pursuant to
section eight of this article.
(r) (s) Major medical equipment" means a single unit of
medical equipment or a single system of components with related
functions which is used for the provision of medical and other
health services and which costs in excess of
three seven hundred
fifty thousand dollars.
except that such This term does not
include medical equipment acquired by or on behalf of a clinical
laboratory to provide clinical laboratory services if the
clinical laboratory is independent of a physician's office and a
hospital and it has been determined under Title XVIII of the
Social Security Act to meet the requirements of paragraphs ten
and eleven of Section 1861(s) of such act, Title 42 United States
Code Sections 1395x (10) and (11). In determining whether medical
equipment
costs more than three hundred thousand dollars, is major medical equipment, the cost of studies, surveys, designs,
plans, working drawings, specifications and other activities
essential to the acquisition of such equipment shall be included.
If the equipment is acquired for less than fair market value, the
term "cost" includes the fair market value.
(s) (t) Medically underserved population" means the
population of an urban or rural area designated by the state
agency as an area with a shortage of personal health services or
a population having a shortage of such services, after taking
into account unusual local conditions which are a barrier to
accessibility or availability of such services. Such designation
shall be in regulations adopted by the state agency pursuant to
section eight of this article, and the population so designated
may include the state's medically underserved population
designated by the federal secretary of health and human services
under Section 330(b)(3) of the Public Health Service Act, as
amended, Title 42 United States Code Section 254(b)(3).
(t) (u) New institutional health service" means such service
as described in section three of this article.
(u) (v) "Offer", when used in connection with health
services, means that the health care facility or health
maintenance organization holds itself out as capable of
providing, or as having the means
for the provision of, to provide specified health services.
(v) (w) "Person" means an individual, trust, estate,
partnership, committee, corporation, association and other
organizations such as joint-stock companies and insurance
companies, a state or a political subdivision or instrumentality
thereof or any legal entity recognized by the state.
(w) (x) "Physician" means a doctor of medicine or osteopathy
legally authorized to practice by the state.
(x) (y) "Proposed new institutional health service" means
such service as described in section three of this article.
(y) (z) "Psychiatric hospital" means an institution which
primarily provides to inpatients, by or under the supervision of
a physician, specialized services for the diagnosis, treatment
and rehabilitation of mentally ill and emotionally disturbed
persons.
(z) (aa) "Rehabilitation facility" means an inpatient
facility which is operated for the primary purpose of assisting
in the rehabilitation of disabled persons through an integrated
program of medical and other services which are provided under
competent professional supervision.
(aa) (bb) "Review agency" means an agency of the state,
designated by the governor as the agency for the review of state
agency decisions.
(bb) (cc) "Skilled nursing facility" means an institution or
a distinct part of an institution which is primarily engaged in
providing to inpatients skilled nursing care and related services
for patients who require medical or nursing care, or
rehabilitation services for the rehabilitation of injured,
disabled or sick persons.
(cc) (dd) "State agency" means the health care cost review
authority created, established and continued pursuant to article
twenty-nine-b of this chapter.
(dd) (ee) "State health plan" means the document approved by
the governor after preparation by the former statewide health
coordinating council, or that document as approved by the
governor after amendment by the
former health care planning
council or
its successor the state agency.
(ee) "Health care planning council" means the body,
established by section five-a of this article to participate in
the preparation and amendment of the state health plan and to
advise the state agency.
(ee) (ff) "Substantial change to the bed capacity" of a
health care facility means any change, with which a capital
expenditure is associated, that increases or decreases the bed
capacity, or relocates beds from one physical facility or site to
another, but does not include a change by which a health care facility reassigns existing beds as swing beds between acute care
and long-term care categories:
Provided, That a decrease in bed
capacity in response to federal rural health initiatives shall be
excluded from this definition.
(ff) (gg) "Substantial change to the health services" of a
health care facility means the addition of a health service which
is offered by or on behalf of the health care facility and which
was not offered by or on behalf of the facility within the
twelve-month period before the month in which the service is
first offered, or the termination of a health service which was
offered by or on behalf of the facility:
Provided, That
"substantial change to the health services" does not include the
providing of ambulance service, wellness centers or programs,
adult day care or respite care by acute care facilities.
(gg) (hh) "To develop", when used in connection with health
services, means to undertake those activities which upon their
completion will result in the offer of a new institutional health
service or the incurring of a financial obligation, in relation
to the offering of such a service.
§16-2D-4. Exemptions from certificate of need program.
(a) Except as provided in subdivision (h), section three of
this article, nothing in this article or the rules and
regulations adopted pursuant to the provisions of this article may be construed to authorize the licensure, supervision,
regulation or control in any manner of the following:
(1) Private office practice of any one or more health
professionals licensed to practice in this state pursuant to the
provisions of chapter thirty of this code:
Provided, That such
exemption from review of private office practice shall not be
construed to include such practices where major medical equipment
otherwise subject to review under the provisions of this article
is acquired, offered or developed:
Provided, however, That such
exemption from review of private office practice shall not be
construed to include the acquisition, offering or development of
one or more health services, including ambulatory surgical
facilities or centers, lithotripsy, magnetic resonance imaging
and radiation therapy by one or more health professionals. The
state agency shall adopt rules pursuant to section eight of this
article which specify the health services acquired, offered or
developed by health professionals which are subject to
certificate of need review;
(2) Dispensaries and first-aid stations located within
business or industrial establishments maintained solely for the
use of employees:
Provided, That such facility does not contain
inpatient or resident beds for patients or employees who
generally remain in the facility for more than twenty-four hours;
(3) Establishments, such as motels, hotels and
boardinghouses, which provide medical, nursing personnel and
health related services;
(4) The remedial care or treatment of residents or patients
in any home or institution conducted only for those who rely
solely upon treatment by prayer or spiritual means in accordance
with the creed or tenets of any recognized church or religious
denomination;
(5) The creation of new primary care services located in
communities that are underserved with respect to primary care
services:
Provided, That to qualify for this exemption, an
applicant must be a community-based nonprofit organization with
a community board that provides or will provide primary care
services to people without regard to ability to pay:
Provided,
however, That the exemption from certificate of need review of
new primary care services provided by this subdivision shall not
include the acquisition, offering or development of major medical
equipment otherwise subject to review under the provisions of
this article or to include the acquisition, offering or
development of CT scanners, ambulatory surgical facilities,
lithotripsy, magnetic resonance imaging or radiation therapy.
The office of community and rural health services shall define
which services constitute primary care services for purposes of this subdivision, and shall, to prevent duplication of primary
care services, determine whether a community is underserved with
respect to certain primary care services within the meaning of
this subdivision. Any organization planning to qualify for an
exemption pursuant to this subdivision shall submit to the state
agency a letter of intent describing the proposed new services
and area of service; and
(6) The creation of birthing centers by nonprofit primary
care centers that have a community board and provide primary care
services to people in their community without regard to ability
to pay, or by nonprofit hospitals with less than one hundred
licensed acute care beds:
Provided, That to qualify for this
exemption, an applicant must be located in an area that is
underserved with respect to low-risk obstetrical services:
Provided, however, That if a primary care center attempting to
qualify for this exemption is located in the same county as a
hospital that is also eligible for this exemption, or if a
hospital attempting to qualify for this exemption is located in
the same county as a primary care center that is also eligible
for this exemption, then
at least one the primary care center and
at least one hospital from said county shall be required to
collaborate for the provision of services at a birthing center in
order to qualify for this exemption:
Provided further, That for purposes of this subsection, a "birthing center" is a short-stay
ambulatory health care facility designed for low-risk births
following normal uncomplicated pregnancy. Any primary care
center or hospital planning to qualify for an exemption pursuant
to this subdivision shall submit to the state agency a letter of
intent describing the proposed birthing center and area of
service.
(b) (1) A certificate of need is not required for the
offering of an inpatient institutional health service or the
acquisition of major medical equipment for the provision of an
inpatient institutional health service or the obligation of a
capital expenditure for the provisions of an inpatient
institutional health service, if with respect to such offering,
acquisition or obligation, the state agency has, upon application
under subdivision (2) of this subsection, granted an exemption
to:
(A) A health maintenance organization or a combination of
health maintenance organizations if: (i) The organization or
combination of organizations has, in the service area of the
organization or the service areas of the organizations in the
combination, an enrollment of at least fifty thousand
individuals; (ii) the facility in which the service will be
provided is or will be geographically located so that the service will be reasonably accessible to such enrolled individuals; and
(iii) at least seventy-five percent of the patients who can
reasonably be expected to receive the institutional health
service will be individuals enrolled with such organization or
organizations in the combination;
(B) A health care facility if: (i) The facility primarily
provides or will provide inpatient health services; (ii) the
facility is or will be controlled, directly or indirectly, by a
health maintenance organization or a combination of health
maintenance organizations which has, in the service area of the
organization or service areas of the organizations in the
combination, an enrollment of at least fifty thousand
individuals; (iii) the facility is or will be geographically
located so that the service will be reasonably accessible to such
enrolled individuals; and (iv) at least seventy-five percent of
the patients who can reasonably be expected to receive the
institutional health service will be individuals enrolled with
such organization or organizations in the combination; or
(C) A health care facility, or portion thereof, if: (i) The
facility is or will be leased by a health maintenance
organization or combination of health maintenance organizations
which has, in the service area of the organization or the service
areas of the organizations in the combination, an enrollment of at least fifty thousand individuals and on the date the
application is submitted under subdivision (2) of this
subsection, at least fifteen years remain in the term of the
lease; (ii) the facility is or will be geographically located so
that the service will be reasonably accessible to such enrolled
individuals; and (iii) at least seventy-five percent of the
patients who can reasonably be expected to receive the new
institutional health service will be individuals enrolled with
such organization.
(2) (A) A health maintenance organization, combination of
health maintenance organizations or other health care facility is
not exempt under subdivision (1) of this subsection from
obtaining a certificate of need unless:
(i) It has submitted, at such time and in such form and
manner as the state agency shall prescribe, an application for
such exemption to the state agency;
(ii) The application contains such information respecting the
organization, combination or facility and the proposed offering,
acquisition or obligation as the state agency may require to
determine if the organization or combination meets the
requirements of subdivision (1) of this subsection or the
facility meets or will meet such requirements; and
(iii) The state agency approves such application.
(B) The state agency shall approve an application submitted
under paragraph (A) of this subdivision, if it determines that
the applicable requirements of subdivision (1) of this subsection
are met or will be met on the date the proposed activity for
which an exemption was requested will be undertaken.
(3) A health care facility, or any part thereof, or medical
equipment with respect to which an exemption was granted under
subdivision (1) of this subsection, may not be sold or leased and
a controlling interest in such facility or equipment or in a
lease of such facility or equipment may not be acquired and a
health care facility described in paragraph (C) of said
subdivision, which was granted an exemption under said
subdivision, may not be used by any person other than the lessee
described in paragraph (C) of said subdivision, unless:
(A) The state agency issues a certificate of need approving
the sale, lease, acquisition or use; or
(B) The state agency determines, upon application, that the
entity to which the facility or equipment is proposed to be sold
or leased, which intends to acquire the controlling interest in
or to use the facility is:
(i) A health maintenance organization or a combination of
health maintenance organizations which meets the enrollment
requirements of subparagraph (i), paragraph (A), subdivision (1) of this subsection, and with respect to such facility or
equipment, the entity meets the accessibility and patient
enrollment requirements of subparagraphs (ii) and (iii) of said
paragraph; or
(ii) A health care facility which meets the inpatient,
enrollment and accessibility requirements of subparagraphs (i),
(ii) and (iii), paragraph (B), subdivision (1) of this subsection
and with respect to its patients meets the enrollment
requirements of subparagraph (iv) of said paragraph (B).
(4) In the case of a health maintenance organization or an
ambulatory care facility or health care facility which ambulatory
or health care facility is controlled, directly or indirectly, by
a health maintenance organization or a combination of health
maintenance organizations, the certificate of need requirements
apply only to the offering of inpatient institutional health
services, the acquisition of major medical equipment, and the
obligation of capital expenditures for the offering of inpatient
institutional health services and then only to the extent that
such offering, acquisition or obligation is not exempt under
subdivision (1) of this subsection.
(5) The state agency shall establish the period within which
approval or disapproval by the state agency of applications for
exemptions under subdivision (1) of this subsection shall be made.
(c) A health care facility is exempt from certificate of need
for the replacement of major medical equipment if the capital
expenditure to be made for it does not exceed the original
capital expenditure that the health care facility made for the
equipment to be replaced: Provided, That before the capital
expenditure is made or obligated for the replacement equipment,
the health care facility notifies the state agency of the
intended capital expenditure and use of the equipment. Major
medical equipment acquired under the exemption of this subsection
may not be used in such a manner as to have the effect of
resulting in a substantial change to the health services of the
facility.
(c) (d) (1) A health care facility is not required to obtain
a certificate of need for the acquisition of major medical
equipment to be used solely for research, the addition of health
services to be offered solely for research, or the obligation of
a capital expenditure to be made solely for research if the
health care facility provides the notice required in subdivision
(2) of this subsection, and the state agency does not find,
within sixty days after it receives such notice, that the
acquisition, offering or obligation will, or will have the effect
to:
(A) Affect the charges of the facility for the provision of
medical or other patient care services other than the services
which are included in the research;
(B) Result in a substantial change to the bed capacity of the
facility ; or
(C) Result in a substantial change to the health services of
the facility .
(2) Before a health care facility acquires major medical
equipment to be used solely for research, offers a health service
solely for research or obligates a capital expenditure solely for
research, such health care facility shall notify in writing the
state agency of such facility's intent and the use to be made of
such medical equipment, health service or capital expenditure.
(3) If major medical equipment is acquired, a health service
is offered or a capital expenditure is obligated and a
certificate of need is not required for such acquisition,
offering or obligation as provided in subdivision (1) of this
subsection, such equipment or service or equipment or facilities
acquired through the obligation of such capital expenditure may
not be used in such a manner as to have the effect or to make a
change described in paragraphs (A), (B) and (C) of said
subdivision unless the state agency issues a certificate of need
approving such use.
(4) For purposes of this subsection, the term "solely for
research" includes patient care provided on an occasional and
irregular basis and not as part of a research program.
(d) (e) (1) The state agency may
adopt regulations propose
rules pursuant to section eight of this article to specify the
circumstances under which a certificate of need may not be
required for the obligation of a capital expenditure to acquire,
either by purchase or under lease or comparable arrangement, an
existing health care facility:
Provided, That a certificate of
need shall be required for the obligation of a capital
expenditure to acquire, either by purchase or under lease or
comparable arrangement, an existing health care facility if:
(A) The notice required by subdivision (2) of this subsection
is not filed in accordance with that subdivision with respect to
such acquisition; or
(B) The state agency finds, within thirty days after the date
it receives a notice in accordance with subdivision (2) of this
subsection, with respect to such acquisition, that the services
or bed capacity of the facility will be changed by reason of said
acquisition.
(2) Before any person enters into a contractual arrangement
to acquire an existing health care facility, such person shall
notify the state agency of his or her intent to acquire the facility and of the services to be offered in the facility and
its bed capacity. Such notice shall be made in writing and shall
be made at least thirty days before contractual arrangements are
entered into to acquire the facility with respect to which the
notice is given. The notice shall contain all information the
state agency requires in accordance with subsections (e) and (s),
section seven of this article.
(e) (f) The state agency shall adopt regulations, pursuant to
section eight of this article, wherein criteria are established
to exempt from review the addition of certain health services,
not associated with a capital expenditure, that are projected to
entail annual operating costs of less than the expenditure
minimum for annual operating costs. For purposes of this
subsection, "expenditure minimum for annual operating costs"
means three hundred thousand dollars, for the first twelve months
following the effective date of this section and for each twelve- month period thereafter, the state agency
may shall, by
regulations adopted rules proposed pursuant to section eight of
this article, adjust the expenditure minimum for annual operating
costs to reflect the impact of inflation.
(f) (g) The state agency shall adopt rules
within ninety days
of the effective date of the amendment of this section in the
year one thousand nine hundred ninety pursuant to section eight of this article to specify the circumstances under which and the
procedures by which a certificate of need may not be required for
shared services between two or more acute care facilities
providing services made available through existing technology
that can reasonably be mobile. The state agency shall specify
the types of items in the regulations and under what
circumstances mobile MRI and mobile lithotripsy may be so
exempted from review. In no case, however, will mobile cardiac
catheterization be exempted from certificate of need review. In
addition, if the shared services mobile unit proves less cost
effective than a fixed unit, the acute care facility will not be
exempted from certificate of need review.
On a yearly basis, the state agency shall review existing
technologies to determine if other shared services should be
included under this exemption
and shall, before the first day of
July each year provide a report of such review to the governor
and the legislative oversight commission on health and human
resources accountability.
(g) (h) This subsection applies only to hospitals designated
as rural primary care hospitals by
the West Virginia office of
rural health policy community and rural health services in
conformance with requirements of the health care financing
administration of the federal department of health and human services under Section 1920 of Public Law 101-239, Section
6000(g) of the federal Omnibus Budget Reconciliation Act of 1989.
A hospital, designated as a rural primary care hospital, in
accordance with final rules issued by the health care financing
administration, shall undergo a reduction in its number of
licensed acute care beds as determined by the office of
rural
health policy. community and rural health services.
The office of
rural health policy community and rural health
services shall notify the health care cost review authority of
such designation including the number of staffed and operated
beds immediately prior to designation and the number of acute
care beds certified by the health care financing administration.
A rural primary care hospital may reject this designation any
time within twenty-four calendar months, beginning from the date
of designation by the office of
rural health policy community and
rural health services. If a hospital chooses to reject this
designation, it may do so upon written notification to the office
of
rural health policy community and rural health services and
the health care cost review authority. If such designation is
rejected by a rural primary care hospital, license restoration,
not to exceed the number of acute care beds staffed and operated
by the hospital immediately prior to receiving designation as a
rural primary care hospital, shall be exempt from the certificate of need program review.
Within twenty-five months from designating rural primary care
hospitals, the office of
rural health policy community and rural
health services shall notify the health care cost review
authority of the status of the designated hospitals including the
number of licensed beds.
The state agency shall promulgate rules within ninety days of
the effective date of this amendment in order to carry out the
purpose of this subsection.
§16-2D-5. Powers and duties of state agency.
(a) The state agency is hereby empowered to administer the
certificate of need program as provided by this article.
(b) The state agency shall be responsible for coordinating
and developing the health planning research efforts of the state
and for amending and modifying the state health plan which
includes the certificate of need standards
before the first day
of July, one thousand nine hundred ninety-eight and periodically
thereafter. Each year the state agency shall review, in
conjunction with committees it appoints of health care providers,
payors and consumers, the need for changes in the certificate of
need standards, and before the first day of July of each year
provide a report of the findings of such review to the
legislative oversight commission on health and human resources accountability and thereafter proceed to amend such standards in
accordance with subsection (m) of this section. The state agency
shall also conduct an inventory of available healthcare services
within the state and coordinate with the health care facility
information disclosure provisions of articles five-f and
twenty-nine-b of this chapter to determine utilization. An
update of such inventory and coordination shall occur at least
annually.
(c) The state agency may seek advice and assistance of other
persons, organizations and other state agencies in the
performance of the state agency's responsibilities under this
article.
(d) For health services for which
market competition
appropriately allocates
or will likely allocate supply consistent
with the state health plan, the state agency shall, in the
performance of its functions under this article, give priority,
where appropriate to advance the purposes of quality assurance,
cost effectiveness and access, to actions which would strengthen
the effect of competition on the supply of such services.
Not
withstanding other provisions of this article, the state agency
shall adopt rules within nine months of the effective date of the
amendment of this section pursuant to section eight of this
article to specify the circumstances under which and the procedures by which the state agency may issue a plan to exempt
certain health care services in a region from certificate of need
review, except for facilities housing physicians and other
primary care providers that provide outpatient care and which
cost in excess of one hundred fifty thousand dollars. If the
state agency determines certain services are not subject to
certificate of need review, it shall monitor the specified market
continuously to determine if:
(1) Quality standards continue to be met including the
integration of findings of health care facility licensure
agencies, state payor agencies and nongovernment organizations;
(2) Actions of health care facilities continue to foster
competition which allows choice to be based on cost and quality
considerations;
(3) Financial viability continues including health care
facilities' financial condition, competitors' position, and
purchasers and consumers costs; and
(4) The development is true to the plan approved.
(e) For health services for which
market competition does not
or will not appropriately allocate supply consistent with the
state health plan, the state agency shall, in the exercise of its
functions under this article, take actions, where appropriate to
advance the purposes of quality assurance, cost effectiveness and access and the other purposes of this article, to allocate the
supply of such services.
(f) Notwithstanding the provisions of section seven of this
article, the state agency may charge a fee for the filing of any
application, the filing of any notice in lieu of an application,
the filing of any exemption determination request or the filing
of any request for a declaratory ruling. The fees charged may
vary according to the type of matter involved, the type of health
service or facility involved or the amount of capital expenditure
involved. The state agency shall implement this subsection by
filing procedural rules pursuant to chapter twenty-nine-a of this
code. The fees charged shall be deposited into a special fund
known as the certificate of need program fund to be expended for
the purposes of this article.
(g) No hospital, nursing home or other health care facility
shall add any intermediate care or skilled nursing beds to its
current licensed bed complement. This prohibition also applies
to the conversion of acute care or other types of beds to
intermediate or skilled nursing beds:
Provided, That hospitals
eligible under the provisions of section four-a and subsection
(i), section five of this article may convert acute care beds to
skilled nursing beds in accordance with the provisions of
these
sections that section, upon approval by the state agency. Furthermore, no certificate of need shall be granted for the
construction or addition of any intermediate care or skilled
nursing beds except in the case of facilities designed to replace
existing beds in unsafe existing facilities.
A health care
facility in receipt of a certificate of need for the construction
or addition of intermediate care or skilled nursing beds which
was approved prior to the effective date of this section must
incur an obligation for a capital expenditure within twelve
months of the date of issuance of the certificate of need. No
extensions shall be granted beyond the twelve-month period:
Provided, however, That a maximum of sixty beds may be approved,
as a demonstration project, by the state agency for a unit to
provide nursing services to patients with Alzheimer's disease if:
(1) The unit is located in an existing facility which was
formerly owned and operated by the state of West Virginia and is
presently owned by a county of the state of West Virginia; (2)
the facility has provided health care services, including
personal care services, within one year prior to the effective
date of this section; (3) the facility demonstrates that awarding
the certificate of need and operating the facility will be cost
effective for the state; and (4) that any applicable lease,
lease-purchase or contract for operating the facility was awarded
through a process of competitive bidding consistent with state purchasing practices and procedures: Provided further, That an
application for said demonstration project shall be filed with
the state agency on or before the twenty-first day of October,
one thousand nine hundred ninety-three.
(h) No additional intermediate care facility for the mentally
retarded (ICF/MR) beds shall be granted a certificate of need,
except that prohibition does not apply to ICF/MR beds approved
under the Kanawha County circuit court order of the third day of
August, one thousand nine hundred eighty-nine, civil action
number MISC-81-585 issued in the case of
E. H. v. Matin, 168 W.V.
248, 284 S.E.2d 232 (1981).
(i) Notwithstanding the provisions of subsection (g), section
five of this article and, further notwithstanding the provisions
of subsection (d), section three of this article, an existing
acute care hospital may apply to the health care cost review
authority for a certificate of need to convert acute care beds to
skilled nursing beds:
Provided, That the proposed skilled
nursing beds are medicare certified only:
Provided, however,
That any hospital which converts acute care beds to medicare
certified only skilled nursing beds is prohibited from billing
for any medicaid reimbursement for any beds so converted. In
converting beds, the hospital must convert a minimum of one acute
care bed into one medicare certified only skilled nursing bed. The health care cost review authority may require a hospital to
convert up to and including three acute care beds for each
medicare certified only skilled nursing bed:
Provided further,
That a hospital designated or provisionally designated by the
state agency as a rural primary care hospital may convert up to
thirty beds to a distinct-part nursing facility, including
skilled nursing beds and intermediate care beds, on a one-for-one
basis if said rural primary care hospital is located in a county
without a certified free-standing nursing facility and the
hospital may bill for medicaid reimbursement for the converted
beds:
And provided further, That if the hospital rejects the
designation as a rural primary care hospital then the hospital
may not bill for medicaid reimbursement. The health care cost
review authority shall adopt rules to implement this subsection
which require that:
(1) All acute care beds converted shall be permanently
deleted from the hospital's acute care bed complement and the
hospital may not thereafter add, by conversion or otherwise,
acute care beds to its bed complement without satisfying the
requirements of subsection (d), section three of this article for
which purposes such an addition, whether by conversion or
otherwise, shall be considered a substantial change to the bed
capacity of the hospital notwithstanding the definition of that term found in subsection (ee), section two of this article.
(2) The hospital shall meet all federal and state licensing
certification and operational requirements applicable to nursing
homes including a requirement that all skilled care beds created
under this subsection shall be located in distinct-part, long- term care units.
(3) The hospital must demonstrate a need for the project.
(4) The hospital must use existing space for the medicare
certified only skilled nursing beds
or private-pay skilled
nursing beds. Under no circumstances shall the hospital
construct, lease or acquire additional space for purposes of this
section.
(5) The hospital must notify the acute care patient, prior to
discharge, of facilities with skilled nursing beds which are
located in or near the patient's county of residence.
Nothing in this subsection shall negatively affect the rights
of inspection and certification which are otherwise required by
federal law or regulations or by this code of duly
adopted
regulations proposed rules of an authorized state entity.
(j) Notwithstanding the provisions of subsection (g) of this
section, a retirement life care center with no skilled nursing
beds may apply to the health care cost review authority for a
certificate of need for up to sixty skilled nursing beds provided the proposed skilled beds are medicare certified only. On a
statewide basis, a maximum of one hundred eighty skilled beds
which are medicare certified only may be developed pursuant to
this subsection. The state health plan shall not be applicable
to projects submitted under this subsection. The health care
cost review authority shall adopt rules to implement this
subsection which shall include:
(1) A requirement that the one hundred eighty beds are to be
distributed on a statewide basis;
(2) There shall be a minimum of twenty beds and a maximum of
sixty beds in each approved unit;
(3) The unit developed by the retirement life care center
shall meet all federal and state licensing certification and
operational requirements applicable to nursing homes;
(4) The retirement center must demonstrate a need for the
project;
(5) The retirement center must offer personal care, home
health services and other lower levels of care to its residents;
and
(6) The retirement center must demonstrate both short and
long-term financial feasibility.
Nothing in this subsection shall negatively affect the rights
of inspection and certification which are otherwise required by federal law or regulations or by this code of duly
adopted
regulations proposed rules of an authorized state entity.
(k) The provisions of this article are severable and if any
provision, section or part thereby shall be held invalid,
unconstitutional or inapplicable to any person or circumstance,
such invalidity, unconstitutionality or inapplicability shall not
affect or impair any other remaining provisions contained herein.
(l) The state agency is hereby empowered to order a
moratorium upon the processing of an application or applications
for the development of a new institutional health service filed
pursuant to section three of this article, when criteria and
guidelines for evaluating the need for such new institutional
health service have not yet been adopted or are obsolete. Such
moratorium shall be declared by a written order which shall
detail the circumstances requiring the moratorium. Upon the
adoption of criteria for evaluating the need for the new
institutional health service affected by the moratorium, or one
hundred eighty days from the declaration of a moratorium,
whichever is less, the moratorium shall be declared to be over
and affected applications shall be processed pursuant to section
six of this article.
(m) The state agency shall coordinate the collection of
information needed to allow the state agency to develop recommended modifications to certificate of need standards as
required in this article
and shall utilize the information
collected by the state agency under the information disclosure
provisions of articles five-f and twenty-nine-b of this chapter
to avoid duplicative and unnecessary burdensome data reporting
requirements. When the state agency proposes amendments or
modifications to the certificate of need standards, they shall
file with the secretary of state, for publication in the state
register, a notice of proposed action, including the text of all
proposed amendments and modifications, and a date, time and place
for receipt of general public comment. To comply with the public
comment requirement of this section, the state agency may hold a
public hearing or schedule a public comment period for the
receipt of written statements or documents.
All proposed amendments and modifications to the certificate
of need standards, with a record of the public hearing or written
statements and documents received pursuant to a public comment
period, shall be presented to the governor. Within thirty days
of receiving said proposed amendments or modifications, the
governor shall either approve or disapprove all or part of said
amendments and modifications and, for any portion of amendments
or modifications not approved, shall specify the reason or
reasons for nonapproval. Any portions of the amendments or modifications not approved by the governor may be revised and
resubmitted.
(n) The state agency may exempt from or expedite rate review,
certificate of need, and annual assessment requirements and issue
grants and loans,
from funds appropriated to the state agency, to
financially vulnerable health care facilities located in
underserved areas that the state agency and the office of
community and rural health services determine are collaborating
with other providers in the service area to provide cost
effective health care services.
For such grants and loans, the
state agency shall report to the governor and the legislative
oversight commission on health and human resources accountability
at its first interim meeting after the close of each fiscal year,
the recipients and the amounts they received.
One board member shall be assigned to rural health issues and
a staff member shall be appointed by the board to represent it in
evaluating the needs of applicants and recipients of such grants
and loans and to coordinate with the office of community and
rural health services.
NOTE: The purpose of this bill is to change expenditure
thresholds for certificate of need review, exempt certain
replacement equipment from certificate of need review, improve
the collection of health care data, aid rural primary care
hospitals, require the state agency to file additional reports,
allow the development of competitive markets in the delivery of health care services, and reduce duplicative and unnecessary
reporting requirements.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that
would be added.