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.