As used in this article, unless a different meaning clearly appears from the context:
(a) "Charges" means the economic value established for accounting purposes of the goods and services a hospital provides for all classes of purchasers;
(b) "Class of purchaser" means a group of potential hospital patients with common characteristics affecting the way in which their hospital care is financed. Examples of classes of purchasers are medicare beneficiaries, welfare recipients, subscribers of corporations established and operated pursuant to article twenty-four, chapter thirty-three of this code, members of health maintenance organizations and other groups as defined by the board;
(c) "Board" means the three-member board of directors of the West Virginia health care authority, an autonomous division within the state department of health and human resources;
(d) "Health care provider" means a person, partnership, corporation, facility, hospital or institution licensed, certified or authorized by law to provide professional health care service in this state to an individual during this individual's medical, remedial, or behavioral health care, treatment or confinement. For purposes of this article, "health care provider" shall not includethe private office practice of one or more health care professionals licensed to practice in this state pursuant to the provisions of chapter thirty of this code.
(e) "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, and does not include state mental health facilities or state long-term care facilities;
(f) "Person" means an individual, trust, estate, partnership, committee, corporation, association or other organization such as a joint stock company, a state or political subdivision or instrumentality thereof or any legal entity recognized by the state;
(g) "Purchaser" means a consumer of patient care services, a natural person who is directly or indirectly responsible for payment for such patient care services rendered by a health care provider, but does not include third-party payers;
(h) "Rates" means all value given or money payable to health care providers for health care services, including fees, charges and cost reimbursements;
(i) "Records" means accounts, books and other data related to health care costs at health care facilities subject to theprovisions of this article which do not include privileged medical information, individual personal data, confidential information, the disclosure of which is prohibited by other provisions of this code and the laws enacted by the federal government, and information, the disclosure of which would be an invasion of privacy;
(j) "Third-party payor" means any natural person, person, corporation or government entity responsible for payment for patient care services rendered by health care providers; and
(k) "Related organization" means an organization, whether publicly owned, nonprofit, tax-exempt or for profit, related to a health care provider through common membership, governing bodies, trustees, officers, stock ownership, family members, partners or limited partners including, but not limited to, subsidiaries, foundations, related corporations and joint ventures. For the purposes of this subsection family members shall mean brothers and sisters, whether by the whole or half blood, spouse, ancestors and lineal descendants.
Acts, 1989 Reg. Sess., Ch. 87.
(a) The board shall consist of three members, appointed by the governor, with the advice and consent of the Senate. The board members shall be citizens and residents of this state. No more than two of the board members may be members of the same political party. One board member shall have a background in health care finance or economics, one board member shall have previous employment experience in human services, business administration or substantially related fields and one board member shall be a consumer of health services with a demonstrated interest in health care issues.
(b) Each board member shall, before entering upon the duties of his or her office, take and subscribe to the oath provided by section five, article IV of the constitution of the state of West Virginia, which oath shall be filed in the office of the secretary of state. The governor shall designate one of the board members to serve as chairman at the governor's will and pleasure. The chairman shall be the chief administrative officer of the board. The governor may remove any board member only for incompetency, neglect of duty, gross immorality, malfeasance in office or violation of the provisions of this article. Appointments are for terms of six years, except that an appointment to fill a vacancy shall be for the unexpired term only.
(c) No person while in the employ of, or holding any official relation to, any hospital or health care provider subject to the provisions of this article, or who has any pecuniary interest in any hospital or health care provider, may serve as a member of the board or as an employee of the board. Nor may any board member be a candidate for or hold public office or be a member of any political committee while acting as a board member; nor may any board member or employee of the board receive anything of value, either directly or indirectly, from any third-party payor or health care provider. If any of the board members become a candidate for any public office or for membership on any political committee, the governor shall remove the board member from the board and shall appoint a new board member to fill the vacancy created. No board member or former board member may accept employment with any hospital or health care provider subject to the jurisdiction of the board in violation of the West Virginia governmental ethics act, chapter six-b of this code: Provided, That the act shall not apply to employment accepted after termination of the board.
(d) The concurrent judgment of two of the board members when in session as the board shall be considered the action of the board. A vacancy in the board shall not affect the right or duty of the remaining board members to function as a board.
(b) To advise the board in its efforts under this section, the board shall create a data advisory group and appoint one of the board's members as chair of the group. The group shall be composed of representatives of consumers, businesses, providers, payors and state agencies. The data advisory group shall assist the board in developing priorities and protocols for data collection and the development and reform of health information systems provided under this section.
(c) The board's staff shall gather information on cost containment efforts, including, but not limited to, the provision of alternative delivery systems, prospective payment systems, alternative rate-making methods, and programs of consumer education. The board shall pay particular attention to the economic, quality of care and health status impact of such efforts on purchasers or classes of purchasers, particularly the elderly and those on low or fixed incomes.
(d) The board staff shall further gather information on state-of-the-art advances in medical technology, the cost effectiveness of such advances and their impact on advances in health care services and management practices, and any otherstate-of-the-art concepts relating to health care cost containment, health care improvement or other issues the board finds relevant and directs staff to investigate. The board staff shall prepare and keep a register of such information and update it on an annual basis.
(e) The data advisory group members shall be reimbursed from the board funds for sums necessary to carry out its responsibilities and for reasonable travel expenses to attend meetings.
(a) The board may employ such persons as may be necessary to effect the provisions of this article. The board shall set the respective salaries or compensations of all staff. Any person employed by the board other than on a part-time basis shall devote full time to the performance of his or her duties as such employee during the regular working hours of the board.
(b) The board shall appoint general counsel who shall act as legal counsel to the board. The general counsel shall serve at the will and pleasure of the board:
(1) The general counsel may act to bring and to defend actions on behalf of the board in the courts of the state and in federal courts.
(2) In all adjudicative matters before the board, the general counsel shall advise the board. The staff shall represent itself in all such actions before the board.
(c) The board may contract with third parties, including state agencies, for any services that may be necessary to perform the duties imposed upon it by this article where such contractual agreements will promote economy, avoid duplication of effort or make the best use of available expertise.
(d) The board shall identify which members of the staff of the health care cost review authority shall be exempted from the salary schedules or pay plan adopted by the state personnel board, and further identify such staff members by job classification or designation, together with the salary or salary ranges for each such job classification or designation. This information shall be filed by the board with the director of the division of personnel no later than the first day of July, one thousand nine hundred ninety-one, and thereafter as necessary.
(a) In addition to the powers granted to the board elsewhere in this article, the board may:
(1) Adopt, amend and repeal necessary, appropriate and lawful policy guidelines and rules in accordance with article three, chapter twenty-nine-a of this code: Provided, That subsequent amendments and modifications to any rule promulgated pursuant to this article and not exempt from the provisions of article three, chapter twenty-nine-a of this code may be implemented by emergency rule;
(2) Hold public hearings, conduct investigations and require the filing of information relating to matters affecting the costs of health care services subject to the provisions of this article and may subpoena witnesses, papers, records, documents and all other data in connection therewith. The board may administer oaths or affirmations in any hearing or investigation;
(3) Apply for, receive and accept gifts, payments and other funds and advances from the United States, the state or any other governmental body, agency or agencies or from any other private or public corporation or person (with the exception of hospitals subject to the provisions of this article, or associations representing them, doing business in the state of West Virginia, except in accordance with subsection (c) of this section), and enter into agreements with respect thereto, including the undertaking of studies, plans, demonstrations or projects. Any such gifts or payments that may be received or any such agreements that may be entered into shall be used or formulated only so as to pursue legitimate, lawful purposes of the board, and shall in no respect inure to the private benefit of a board member, staff member, donor or contracting party;
(4) Lease, rent, acquire, purchase, own, hold, construct, equip, maintain, operate, sell, encumber and assign rights or dispose of any property, real or personal, consistent with the objectives of the board as set forth in this article: Provided, That such acquisition or purchase of real property or construction of facilities shall be consistent with planning by the state building commissioner and subject to the approval of the Legislature;
(5) Contract and be contracted with and execute all instruments necessary or convenient in carrying out the board's functions and duties; and
(6) Exercise, subject to limitations or restrictions herein imposed, all other powers which are reasonably necessary or essential to effect the express objectives and purposes of this article.
(b) The board shall annually prepare a budget for the next fiscal year for submission to the governor and the Legislature which shall include all sums necessary to support the activities of the board and its staff.
(c) Each hospital subject to the provisions of this article shall be assessed by the board on a pro rata basis using the net patient revenue, as defined under generally accepted accounting principles, of each hospital as reported under the authority of section eighteen of this article as the measure of the hospital's obligation. The amount of such fee shall be determined by the board except that in no case shall the hospital's obligation exceed one tenth of one percent of its net patient revenue. Such fees shall be paid on or before the first day of July in each year and shall be paid into the state treasury and kept as a special revolving fund designated "health care cost review fund", with the moneys in such fund being expendable after appropriation by the Legislature for purposes consistent with this article. Any balance remaining in said fund at the end of any fiscal year shall not revert to the treasury, but shall remain in said fund and such moneys shall be expendable after appropriation by the Legislature in ensuing fiscal years.
(d) Each hospital's assessment shall be treated as an allowable expense by the board.
(e) The board is empowered to withhold rate approvals, certificates of need and rural health system loans and grants if any such fees remain unpaid, unless exempted under subsection (g), section four, article two-d of this chapter.
The board shall, within thirty days of the close of the fiscal year, or from time to time as requested by the Legislature, prepare and transmit to the governor and the legislative oversight commission on health and human resources accountability a report of its operations and activities for the preceding fiscal year. This report shall include summaries of all reports made by the hospitals subject to this article, together with facts, suggestions and policy recommendations the board considers necessary. The board shall, after rate review and determination in accordance with the provisions of this article, include such rate schedules in its annual report or other reports as may be requested by the Legislature.
(b) Those costs or charges associated with individual health care providers or health care provider groups providing inpatient or outpatient services under a contractual agreement with hospitals (excluding simple admitting privileges) shall be under the jurisdiction of the board. The jurisdiction of the board shall not extend to the regulation of rates of private health care providers or health care groups providing inpatient or outpatient services under a contractual agreement with hospitals when the provision of such service is outside the hospital setting, and shall not extend to the regulation of rates of all other private health care providers practicing outside the hospital setting: Provided, That such practice outside of the hospital setting is not found to be an evasion of the purposes of this article.
(b) All pertinent provisions of article five, chapter twenty-nine-a of this code shall apply to and govern the hearing and administrative procedures in connection with and following the hearing except as specifically stated to the contrary in this article.
(c) Any hearing may be conducted by members of the board or by a hearing examiner appointed for such purpose. Any member of the board may issue subpoenas and subpoenas duces tecum which shall be issued and served pursuant to the time, fee and enforcement specifications in section one, article five, chapter twenty-nine-a of this code.
(d) Notwithstanding any other provision of state law, when a hospital alleges that a factual determination made by the board is incorrect, the burden of proof shall be on the hospital to demonstrate that such determination is, in light of the total record, not supported by substantial evidence. The burden of proof remains with the hospital in all cases.
(e) After any hearing, after due deliberation, and in consideration of all the testimony, the evidence and the total record made, the board shall render a decision in writing. The written decision shall be accompanied by findings of fact and conclusions of law as specified in section three, article five, chapter twenty-nine-a of this code, and the copy of the decision and accompanying findings and conclusions shall be served by certified mail, return receipt requested, upon the party demanding the hearing, and upon its attorney of record, if any.
(f) Any interested individual, group or organization shall be recognized as affected parties upon written request from the individual, group or organization. Affected parties shall have the right to bring relevant evidence before the board and testify thereon. Affected parties shall have equal access to records, testimony and evidence before the board, and shall have equal access to the expertise of the board's staff. The board shall have authority to develop rules and regulations to administer provisions of this section.
(g) The decision of the board is final unless reversed, vacated or modified upon judicial review thereof, in accordance with the provisions of section thirteen of this article.
(a) A final decision of the board and the record upon which it was made shall, upon request of any affected party, be reviewed by the agency of the state designated by the governor to hear appeals under the provisions of article two-d of this chapter. To be effective, such request must be received within thirty days after the date upon which all parties received notice of the board decision, and the hearing shall commence within thirty days of receipt of the request.
(b) For the purpose of administrative review of board decisions, the review agency shall conduct its proceedings in conformance with the West Virginia rules of civil procedure for trial courts of record and the local rules for use in the civil courts of Kanawha County and shall review appeals in accordance with the provisions governing the judicial review of contested administrative cases in section four, article five, chapter twenty-nine-a of this code, notwithstanding the exceptions of section five, article five, chapter twenty-nine-a of this code.
(c) The decision of the review agency shall be made in writing within forty-five days after the conclusion of such hearing.
(d) The written findings of the review agency shall be sent to all affected parties, and shall be made available by the commission to others upon request.
(e) The decision of the review agency shall be considered the final decision of the board; however, the review agency may remand the matter to the board for further action or consideration.
(f) Upon the entry of a final decision by the review agency, any affected party may within thirty days after the date upon which all affected parties receive notice of the decision of the review agency, appeal said decision in the circuit court of Kanawha County. The decision of the review agency shall be reviewed by that circuit court in accordance with the provisions for the judicial review of administrative decisions contained in section four, article five, chapter twenty-nine-a of this code.
(b) The hospital shall be granted a hearing on the order of enforcement if, within twenty days after receipt of a copy thereof, it files with the board a written demand for hearing. A demand for hearing shall operate automatically to stay or suspend the execution of the order of enforcement, with the exception of orders relating to rate increases.
(c) Upon receipt of a written demand for a hearing, the board shall set a time and place therefor, not less than ten and no more than thirty days thereafter. Any scheduled hearing may be continued by the board upon motion for good cause shown by the hospital demanding the hearing.
Acts, 1997 Reg. Sess., Ch. 102.
(b) The board may provide for modification in the accounting and reporting system in order to correctly reflect differences in the scope or type of services and financial structures of the various categories, sizes and types of hospitals and in a manner consistent with the purposes of this article.
(c) The board may provide technical assistance to those hospitals which request it and which evidence sufficient need for assistance in the establishment of a data collection system to the extent that funds are available to the board for this purpose.
(d) The board shall, after consultation with health care providers, purchasers, classes of purchasers and third-party payors, adopt a mandatory form for reporting to the board, at itsrequest, medical diagnosis, treatment and other services rendered to each purchaser by health care providers subject to the provisions of this article.
(e) Following a public hearing, the board shall establish a program to minimize the administrative burden on hospitals by eliminating unnecessary duplication of financial and operational reports; and to the extent possible, notwithstanding any other law, coordinate reviews, reports and inspections performed by federal, state, local and private agencies.
(1) A balance sheet detailing the assets, liabilities and net worth of the hospital for its preceding fiscal year;
(2) A statement of income and expenses for the preceding fiscal year;
(3) A statement of services rendered and services available; and
(4) Such other reports as the board may prescribe.
Where more than one licensed hospital is operated by the reporting organization, the information required by this section shall be reported for each hospital separately.
(b) It shall be the duty of every related organization to file with the board, within thirty days from the effective date of this section, the following financial statements or reports for each of its three prior fiscal years:
(1) A balance sheet detailing the assets, liabilities and net worth of the related organization;
(2) A statement of income and expenses;
(3) A statement of cash flows; and
(4) Such other information as the board may prescribe.
After the initial filing of the financial information required by this subsection, every related organization shall thereafter file annual financial reports with the board in a form specified by the board.
(c) The annual financial statements filed pursuant to this section shall be prepared in accordance with the system of accounting and reporting adopted under section seventeen of this article. The board may require attestations from responsible officials of the hospitals or related organizations that such reports have to the best of their knowledge been prepared truthfully and in accordance with the prescribed system of accounting and reporting.
(d) All reports filed under any provisions of this article, except personal medical information personally identifiable to a purchaser and any tax return, shall be open to public inspection and shall be available for examination at the offices of the board during regular business hours.
(e) Whenever a further investigation is deemed necessary or desirable to verify the accuracy of any information set forth in any statement, schedule or report filed by a health care provider or related organization under the provisions of this section, the board may require a full or partial audit of the records of the health care provider or related organization.
(a) The board shall have power: (1) To initiate reviews and investigations of hospital rates and establish and approve such rates; (2) to initiate reviews and investigations of hospital rates for specific services and the component factors which determine such rates; (3) to initiate reviews and investigations of hospital budgets and the specific components of such budgets; and (4) to approve or disapprove hospital rates and budgets taking into consideration the criteria set forth in section twenty of this article: Provided, That the board may not apply penalties held in abeyance to any future rate applications filed with the authority effective May 31, 2015, forward: Provided, however, That the board shall waive all penalties held in abeyance by May 31, 2015.
(b) In the interest of promoting the most efficient and effective use of hospital service, the board may adopt and approve alternative methods of rate determination. The board may also adopt methods of charges and payments of an experimental nature which are in the public interest and consistent with the purpose of this article.
(c) The board shall examine the need for an alternative to the current rate-setting method as a means of controlling hospital costs and submit the findings, recommendations and any proposed drafts of legislation, if necessary, in a report to the Legislative Oversight Commission on Health and Human Resources Accountability and the Governor on or before August 1, 1998.
(a) The Legislature finds and declares that changing market forces require periodic changes in the regulatory structure for health care providers and hereby directs the board to study the following:
(1) The certificate of need program, including the effect of any changes on managed care and access for uninsured and rural consumers; determining which services or capital expenditures should be exempt and why; and the status of similar programs in other states;
(2) The hospital rate-setting methodology, including the need for hospital rate-setting and the development of alternatives to the cost-based reimbursement methodology;
(3) Managed care markets, including the need for regulatory programs in managed care markets; and
(4) Barriers or obstacles, if any, presented by the certificate of need program or standards in the state health plan to health care providers' need to reduce excess capacity, restructure services and integrate the delivery of services.
(b) The board may form task forces to assist it in addressing these issues and it shall prepare a report on its findings and recommendations, which is to be filed with the governor, the president of the Senate and the speaker of the House of Delegates on or before the first day of October, one thousand nine hundredninety-eight, identifying each problem and recommendation with specificity and the effect of each recommendation on cost, access and quality of care. The task forces, if formed, shall be composed of representatives of consumers, businesses, providers, payors and state agencies.
(c) The board shall report quarterly to the legislative oversight commission on health and human resources accountability regarding the appointment, direction and progress of the studies.
(1) The costs of the hospital's services are reasonably related to the services provided and the rates are reasonably related to the costs;
(2) The rates are equitably established among all purchasers or classes of purchasers within a hospital without discrimination unless federal or state statutes or rules and regulations conflict with this requirement. On and after the effective date of this section, a summary of every proposed contract, or amendment to any existing contract, for the payment of patient care services between a purchaser or third-party payor and a hospital shall be filed by the hospital for review by the board, which reviews shall occur no less frequently than each calendar quarter: (A) If the contract establishes a discount to the purchaser or third-party payor, it shall not take effect until approved by the board. For purposes of this article, a risk-bearing contract is reviewable as a discount contract and the amount computed as the discount percentage by the provider on the board shall be the approved amount of the discount. The difference, if any, between the actual discount percentage and amount and the approved amount, shall not be considered forrate-setting purposes; (B) the board may promulgate rules, in accordance with the provisions of section eight of this article, that establish the criteria for review of discount contracts, which shall include that: (i) No discount shall be approved by the board which constitutes an amount below the cost to the hospital; (ii) the cost of any discount contained in the contract will not be shifted to any other purchaser or third-party payor; (iii) the discount will not result in a decrease in the hospital's average number of medicare, medicaid or uncompensated care patients served during the previous three fiscal years; and (iv) the discount is based upon criteria which constitutes a quantifiable economic benefit to the hospital. The board may define by rule what constitutes "cost" in subparagraphs (i) and (ii) of this paragraph; "purchaser" in subparagraph (iii) of this paragraph; and "economic benefit" in subparagraph (iv) of this paragraph. Any rules promulgated pursuant to this subsection may be filed as emergency rules. All information submitted to the board shall be certified by the hospital's chief executive officer and chief financial officer as to its accuracy and truthfulness;
(3) The rates of payment for medicaid are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated hospitals subject to the provisions of this article. The rates shall take into account the situation of hospitals which serve disproportionate numbers of low income patients and assure that individuals eligible for medicaid havereasonable access, taking into account geographic location and reasonable travel time, to inpatient hospital services of adequate quality;
(4) The rates are equitable in comparison to prevailing rates for similar services in similar hospitals as determined by the board; and
(5) In no event shall a hospital's receipt of emergency disaster funds from the federal government be included in the hospital's gross revenues for either rate-setting or assessment purposes.
(b) In the interest of promoting efficient and appropriate utilization of hospital services, the board shall review and make findings on the appropriateness of projected gross revenues for a hospital as the revenues relate to charges for services and anticipated incidence of service.
(c) When applying the criteria set forth in subsections (a) and (b) of this section, the board shall consider all relevant factors, including, but not limited to, the following: The economic factors in the hospital's area; the hospital's efforts to share services; the hospital's efforts to employ less costly alternatives for delivering substantially similar services or producing substantially similar or better results in terms of the health status of those served; the efficiency of the hospital as to cost and delivery of health care; the quality of care; occupancy level; a fair return on invested capital, not otherwise compensatedfor; whether the hospital is operated for profit or not for profit; costs of education; and income from any investments and assets not associated with patient care, including, but not limited to, parking garages, residences, office buildings, and income from related organizations and restricted funds whether or not associated with patient care.
(d) Wages, salaries and benefits paid to or on behalf of nonsupervisory employees of hospitals subject to this article are not subject to review unless the board first determines that the wages, salaries and benefits may be unreasonably or uncustomarily high or low. This exemption does not apply to accounting and reporting requirements contained in this article, nor to any that may be established by the board. The term "nonsupervisory personnel", for the purposes of this section, means, but is not limited to, employees of hospitals subject to the provisions of this article who are paid on an hourly basis.
(e) Reimbursement of capital and operating costs for new services and capital projects subject to article two-d of this chapter shall not be allowed by the board if the costs were incurred subsequent to the eighth day of July, one thousand nine hundred seventy-seven, unless they were exempt from review or approved: (i) By the state health planning and development agency prior to the first day of July, one thousand nine hundred eighty-four; or (ii) thereafter, pursuant to the provisions of article two-d of this chapter.
(f) The board shall consult with relevant licensing agencies and may require them to provide written findings with regard to their statutory functions and information obtained by them in the pursuit of those functions. Any licensing agency empowered to suggest or mandate changes in buildings or operations of hospitals shall give notice to the board together with any findings.
(g) A hospital shall file a complete rate application with the board on an annual basis a minimum of seventy-five days prior to the beginning of its fiscal year. If the application is filed and determined to be complete by the board sixty days prior to the beginning of the hospital's fiscal year, and no hearing is requested on the application, the board shall set the rates in advance of the year during which they apply and shall not adjust the rates for costs actually incurred: Provided, That if the board does not establish rates by the beginning of the hospital's fiscal year, and a hearing has not been requested, the board shall establish rates retroactively to the beginning of the hospital's fiscal year: Provided, however, That if the board does not establish rates by the beginning of the hospital's fiscal year, and a hearing has been requested, the board may establish rates retroactively to the beginning of the fiscal year. This subsection shall not apply to the procedure set forth in subsection (c), section twenty-one of this article.
(h) No hospital may charge for services at rates in excess of those established in accordance with the requirements of andprocedures set forth in this article.
(i) Notwithstanding any other provision of this article, the board shall approve all requests for rate increases by hospitals which are licensed for one hundred beds or less and which are not located in a standard metropolitan statistical area where the rate of increase is equal to or less than the lowest rate of inflation as established by a recognized inflation index for either the national or regional hospital industry. The board may, by rule, impose reporting requirements to ensure that a hospital does not exceed the rate of increases permitted in this section.
(j) Notwithstanding any other provision of this article, the board shall develop an expedited review process applicable to all hospitals licensed for more than one hundred beds or that are located in a standard metropolitan statistical area for rate increase requests which may be based upon a recognized inflation index for the national or regional hospital industry.
(k) The board may require hospitals to file such additional information as it deems necessary to evaluate a market-driven system of rate setting.
(a) No hospital subject to this article may change or amend its schedule of rates except in accordance with the following procedures:
(1) Any request for a change in rate schedules or other changes must be filed in writing to the board with such supporting data as the hospital seeking to change its rates considers appropriate, in the form prescribed by the board. Upon receipt of notice, the board, if it considers necessary, may hold a public hearing on the proposed change. Such hearing shall be held no later than forty-five days after receipt of the notice. The review of the proposed change may not exceed an overall period of one hundred eighty days from the date of filing to the date of the board's order. If the board fails to complete its review of the proposed change within the time period specified for the review, the proposed change shall be deemed to have been approved by the board. Any proposed change shall go into effect upon the date specified in the order. The review period is complete upon the date of the board's final order notwithstanding an appeal of the order to the agency of the state designated by the governor, a circuit court, or the supreme court of appeals by an affected party;
(2) Each hospital shall establish, in a written report which shall be incorporated into each proposed rate application, that it has thoroughly investigated and considered:
(A) The economic and social impact of any proposed rate increase, or service decrease, on hospital cost containment and upon health care purchasers, including classes of purchasers, such as the elderly and low and fixed income persons;
(B) State-of-the-art advances in health care cost containment, hospital management and rate design, as alternatives to or in mitigation of any rate increase, or service decrease, which report shall describe the state-of-the-art advances considered and shall contain specific findings as to each consideration, including the reasons for adoption or rejection of each;
(C) Implementation of cost control systems, including the elimination of unnecessary or duplicative facilities and services, promotion of alternative forms of care, and other cost control mechanisms;
(D) Initiatives to create alternative delivery systems; and
(E) Efforts to encourage third-party payors, including, but not limited to, insurers, health service, care and maintenance organizations, to control costs, including a combination of education, persuasion, financial incentives and disincentives to control costs;
(3) In the event the board modifies the request of a hospital for a change in its rates so that the hospital obtains only a partial increase in its rate schedule, the hospital shall have the right to accept the benefits of the partial increase in rates and charge its purchasers accordingly without in any way adversely affecting or waiving its right to appeal that portion of the decision and order of the board which denied the remainder of the requested rate increase.
(b) The board shall allow a temporary change in a hospital's rates which may be effective immediately upon filing and in advance of review procedures when a hospital files a verified claim that such temporary rate changes are in the public interest, and are necessary to prevent insolvency, to maintain accreditation or for emergency repairs or to relieve undue financial hardship. The verified claim shall state the facts supporting the hospital's position, the amount of increase in rates required to alleviate the situation, and shall summarize the overall effect of the rate increase. The claim shall be verified by either the chairman of the hospital's governing body or by the chief executive officer of the hospital.
(c) Following receipt of the verified claim for temporary relief, the board shall review the claim through its usualprocedures and standards; however, this power of review does not affect the hospital's ability to place the temporary rate increase into effect immediately. The review of the hospital's claim shall be for a permanent rate increase and the board may include such other factual information in the review as may be necessary for a permanent rate increase review. As a result of its findings from the permanent review, the board may allow the temporary rate increase to become permanent, to deny any increase at all, to allow a lesser increase, or to allow a greater increase.
(d) When any change affecting an increase in rates goes into effect before a final order is entered in the proceedings, for whatever reasons, where it deems it necessary and practicable, the board may order the hospital to keep a detailed and accurate account of all amounts received by reason of the increase in rates and the purchasers and third-party payors from whom such amounts were received. At the conclusion of any hearing, appeal or other proceeding, the board may order the hospital to refund with interest to each affected purchaser and/or third-party payor any part of the increase in rates that may be held to be excessive or unreasonable. In the event a refund is not practicable, the hospital shall, under appropriate terms and conditions determined by the board, charge over and amortize by means of a temporary decrease in rates whatever income is realized from that portion of the increase in rates which was subsequently held to be excessive or unreasonable.
(e) The board, upon a determination that a hospital has overcharged purchasers or charged purchasers at rates not approved by the board or charged rates which were subsequently held to be excessive or unreasonable, may prescribe rebates to purchasers and third-party payors in effect by the aggregate total of the overcharge.
(f) The board may open a proceeding against any hospital at any time with regard to compliance with rates approved and the efficiency and effectiveness of the care being rendered in the hospital.
Each hospital filing an application or request for a change in rate schedules or other changes with the board pursuant to section twenty-one of this article shall notify the director of the office of consumer advocacy established pursuant to section sixteen, article two, chapter thirty-three of this code of said application by submitting a copy of the same to the office of consumer advocacy. Each request shall include any proposed increase or decrease of the rates and shall be filed on or before the date the rate request or application is filed with the board.
(b) With the assistance of the above-mentioned entities, and after public hearings, the board shall develop a plan for the review, on a sampling basis, of the necessity of admissions, length of stay and quality of care rendered at said hospitals.
(c) The board shall monitor identified problem areas and shall impose such sanctions and provide such incentives as necessary to ensure high quality and appropriate services and utilization in hospitals under the jurisdiction of this article.
(d) To assist the board in its efforts under this section, the board shall create a quality assurance advisory group and appoint one of the board's members as chairman of the group. The group shall be composed of representatives of consumers, providers, payors and regulating agencies.
(1) Be considered for all purposes a directly affected party before the insurance commissioner for purposes of any application, hearing or appeal on insurance matters;
(2) Review requests for, and make comments on, proposed rate increases or coverage decreases submitted to the insurance commissioner with respect to the reasonableness of the request and impact on health care cost containment;
(3) Comment on the advisability, reasonableness and impact on health care cost containment of any other matter coming before the insurance commissioner or any other governmental agency or body.
(b) On or before the date of filing with the insurance commissioner of any rate, including any proposed increase or decrease thereof, and any coverage matter, including any proposed increase or decrease thereof, each company or organization, described in subsection (a) above, shall notify the board of such filing, by copy thereof or notice form, as the board directs.
(c) Each company or organization, described in subsection (a) above, shall establish, in a written report which shall be incorporated into each proposed rate application, that it has thoroughly investigated and considered:
(1) The economic and social impact of any proposed rate increase, or coverage decrease, on health care cost containment and upon health care purchasers, including classes of purchasers, such as the elderly and low and fixed income persons;
(2) State-of-the-art advances in insurance and health care management and rate design as alternatives to or in mitigation of any rate increase, or coverage decrease, which report shall describe the state-of-the-art advances considered and shall contain specific findings as to each consideration, including the reasons for adoption or rejection of each:
(3) Implementation of cost control systems, including a combination of education, persuasion, financial incentives and disincentives to control costs;
(4) Initiatives to create alternative delivery systems; and
(5) Efforts to encourage health care providers to control costs, including the elimination of unnecessary or duplicative facilities and services, promotion of alternative forms of care, and other cost control mechanisms.