H. B. 2653
(By Delegates Warner and Coleman)
[Introduced February 4, 1999; referred to the
Committee on Health and Human Resources then
Government Organization.]
A BILL to amend and reenact section two, article two-d, chapter
sixteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to public health;
certificate of need; and providing a definition of
"exclusivity".
Be it enacted by the Legislature of West Virginia:
That section two, article two-d, chapter sixteen of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 2D. CERTIFICATE OF NEED.
§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 that 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 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 this
exemption from review shall not be construed to include practices
where major medical equipment otherwise subject to review under
the provisions of this article is acquired, offered or developed:
Provided, however, That this exemption from review 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 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 this exemption from
review shall not be construed to include practices where major
medical equipment otherwise subject to review under the
provisions of this article is acquired, offered or developed:
Provided, however, That this exemption from review shall not be
construed to include 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 the 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 licensed to a
health care facility, or 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.
(g) "Exclusivity" means a contractual requirement that
conditions a provider's or a payor's participation in one
agreement or arrangement with a corollary restriction that
prohibits the provider or payor from entering into other
competing provider or payor arrangements, the effect of which
limits a patient's choice of provider.
(g) (h) "Capital expenditure" means:
(1) An expenditure made by or on behalf of a health care
facility, 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)(i) Exceeds the
expenditure minimum; or (ii) is a substantial change to the bed
capacity of the facility with respect to which the expenditure is
made; or (iii) is a substantial change to the services of such
facility; or
(2) The donation of equipment or facilities to a health care
facility, which if acquired directly by that facility would be
subject to review; or
(3) The transfer of equipment or facilities for less than
fair market value if the transfer of the equipment or facilities
at fair market value would be subject to review; or
(4) A series of expenditures, 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 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 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.
(h) (i) "Expenditure minimum" means one million dollars 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.
(i) (j) "Health", used as a term, includes physical and
mental health.
(j) (k) "Health care facility" 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; health maintenance organizations; and
community mental health and mental retardation facilities. 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 or consultation
and education for individuals with mental illness, mental
retardation or drug or alcohol addiction.
(k) (l) "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.
(l) (m) "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 U.S.C. §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 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: (i) Directly through
physicians who are either employees or partners of 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.
(m) (n) "Health services" means clinically related
preventive, diagnostic, treatment or rehabilitative services,
including alcohol, drug abuse and mental health services.
(n) (o) "Home health agency" 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.
(o) (p) "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
the persons' temporary or permanent residences by using an
interdisciplinary team, including, at a minimum, persons
qualified to perform nursing services; social work services; the
general practice of medicine or osteopathy; and pastoral or
spiritual counseling.
(p) (q) "Hospital" means a facility licensed as such
pursuant to the provisions of article five-b of this chapter, and
any acute care facility operated by the state government, that
primarily provides inpatient diagnostic, treatment or
rehabilitative services to injured, disabled or sick persons under the supervision of physicians and includes psychiatric and
tuberculosis hospitals.
(q) (r) "Intermediate care facility" means an institution
that provides health-related services to individuals with mental
or physical conditions that require services above the level of
room and board, but do not require the degree of services
provided in a hospital or skilled-nursing facility.
(r) (s) "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, which contains the information required by the state
agency in rules adopted pursuant to section eight of this
article.
(s) (t) "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 costs in excess of seven hundred fifty
thousand dollars. 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 U.S.C. §1395x (10) and (11). In
determining whether medical equipment 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.
(t) (u) "Medically underserved population" means the
population of an area designated by the state agency as having a
shortage of personal health services. The state agency may
consider unusual local conditions that are a barrier to
accessibility or availability of health services. The
designation shall be in rules 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 U.S.C. §254(b)(3).
(u) (v) "New institutional health service" means any service
as described in section three of this article.
(v) (w) "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 to provide specified health
services.
(w) (x) "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.
(x) (y) "Physician" means a doctor of medicine or osteopathy
legally authorized to practice by the state.
(y) (z) "Proposed new institutional health service" means
any service as described in section three of this article.
(z) (aa) "Psychiatric hospital" means an institution that
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.
(aa) (bb) "Rehabilitation facility" means an inpatient
facility 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.
(bb) (cc) "Review agency" means an agency of the state,
designated by the governor as the agency for the review of state
agency decisions.
(cc) (dd) "Skilled nursing facility" means an institution,
or a distinct part of an institution, that primarily provides
inpatient skilled nursing care and related services, or
rehabilitation services, to injured, disabled or sick persons.
(dd) (ee) "State agency" means the health care cost review
authority created, established and continued pursuant to article
twenty-nine-b of this chapter.
(ee) (ff) "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 the state agency.
(ff) (gg) "Substantial change to the bed capacity" of a
health care facility means any change, associated with a capital
expenditure, 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.
(gg) (hh) "Substantial change to the health services" of a
health care facility means: (1) The addition of a health service
offered by or on behalf of the health care facility, 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; (2) or the termination of a health service 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.
(hh) (ii) "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.
NOTE: The purpose of this bill is to provide a definition
of "exclusivity" under the article relating to certificate of
need.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.