Senate Bill No. 534
(By Senator Bailey)
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[Introduced February 19, 1996; referred to the Committee
on Health and Human Resources.]
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A BILL to amend article two-d, chapter sixteen of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
four-b, relating to providing a temporary exemption from
certificate of need requirements for hospitals in the
Charleston standard metropolitan statistical area.
Be it enacted by the Legislature of West Virginia:
That article two-d, chapter sixteen of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
four-b, to read as follows:
ARTICLE 2D. CERTIFICATE OF NEED.
§16-2d-4b. Temporary exemption from certificate of need for
hospitals in Charleston area standard metropolitan
statistical area.
(a) The Legislature finds that the increasing cost of
providing health care is motivating both public and private
employers and consumers to seek out "managed care" arrangements
with health care providers and facilities, rather than the
traditional fee for service; that the apparent advantage of such
"managed care" arrangements is to provide competition in order to
lower costs to consumers; that the requirement that hospitals
obtain a certificate of need for new institutional health
services may stifle competition in certain areas of the state,
because it serves to create a monopoly of certain services by one
hospital; that the cost to consumers of certain specialized
services is especially high in the Charleston area and may be due
to the monopoly of such services in the area created by the
certificate of need requirements; and that it is in the public
interest to permit a temporary exemption from the certificate of
need requirements in such area to determine if it would result in
increased competition and lower costs to consumers.
(b) Notwithstanding anything in this code to the contrary,
a hospital located in the Charleston standard metropolitan statistical area (SMSA), as defined by the United States
department of commerce, bureau of the census or its successor, is
not required to obtain a certificate of need for a new
institutional health service through the thirty-first day of
December, in the year two thousand.
(c) A hospital in the Charleston SMSA that acquires, offers
or develops a new institutional health service that would
otherwise require the receipt of a certificate of need, shall
report it to the state agency upon the acquisition, offer or
development of a new institutional health service and may provide
information as to why it believes such action will result in
increased competition among hospitals in the area and reduction
in costs to the consumer.
(d) The state agency shall make an annual report to the
Legislature of the new institutional health services acquired,
offered or developed by hospitals in the Charleston SMSA,
together with any documentation supplied by the hospitals as to
why they believe such institutional health care services will
lead to increased competition and lower costs to the consumer in
the area.
(e) The state agency shall make a final report to the Legislature on the second Wednesday of February, two thousand
one, containing a full list of all new institutional health
services acquired, offered or developed by hospitals under this
section, together with an analysis of the effects on competition
in the Charleston SMSA for such services and the costs to the
consumer in the area.
(f) The provisions of this section shall expire on the
second Wednesday of February, two thousand one.
NOTE: The purpose of this bill is to provide a temporary
exemption from certificate of need requirements for hospitals in
the Charleston standard metropolitan statistical area (SMSA) in
order to determine the advantages that may be afforded by
competition. Hospitals affected are required to make an annual
report to the health care cost review authority of expenditures
on new institutional health services that would otherwise have
required a certificate of need under state law, and the authority
in turn is required to make an annual report to the Legislature.
The exemption would end on the thirty-first day of December two
thousand, and the health care cost review authority would be
required to make a final report to the Legislature at the regular
session in the year two thousand one.
This section is new; therefore, strike-throughs and
underscoring have been omitted.