COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 640
(By Senators Walker, Craigo and Dittmar)
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[Originating in the Committee on Finance;
reported March 3, 1998.]
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A BILL to amend and reenact section five, article two-d, chapter
sixteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to the conversion
of rural hospital acute care beds to skilled nursing beds
certified by both medicare and medicaid; and exception to
agency rules and certain statutory requirements.
Be it enacted by the Legislature of West Virginia:
That section five, 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-5. Powers and duties of state agency.
(a) The state agency is hereby empowered to may administer
the certificate of need program as provided by this article.
(b) The state agency shall be is 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.
(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 competition appropriately
allocates 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 the services.
(e) For health services for which 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 the 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 care 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, 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
shall 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 shall not bill for any medicaid reimbursement for any
converted beds so converted. In converting beds, the hospital
must shall 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 the
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 shall demonstrate a need for the
project.
(4) The hospital must shall use existing space for the
medicare certified only skilled nursing beds. Under no
circumstances shall the hospital construct, lease or acquire
additional space for purposes of this section.
(5) The hospital must shall 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 affects
the rights of inspection and certification which are otherwise
required by federal law or regulations or by this code of or duly
adopted regulations rules of an authorized state entity.
(j) (1) 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 is not
applicable to projects submitted under this subsection. The
health care cost review authority shall adopt rules to implement this subsection which shall include a requirement that:
(1) (A) A requirement that the one hundred eighty beds are
to be distributed on a statewide basis;
(2) (B) There shall be a minimum of twenty beds and a
maximum of sixty beds in each approved unit;
(3) (C) 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) (D) The retirement center must demonstrate a need for
the project;
(5) (E) The retirement center must offer personal care, home
health services and other lower levels of care to its residents;
and
(6) (F) The retirement center must demonstrate both short
and long-term financial feasibility.
(2) Nothing in this subsection shall negatively affect
negatively affects the rights of inspection and certification
which are otherwise required by federal law or regulations or by
this code of or duly adopted regulations 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) (k) The state agency is hereby empowered to may 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 the new institutional
health service have not yet been adopted or are obsolete. Such
The 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) (
l
) (1) 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. When the state agency proposes
amendments or modifications to the certificate of need standards,
they it 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.
(2) 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 the proposed amendments or
modifications, the governor shall either approve or disapprove
all or part of said the 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) (m) The state agency may exempt from or expedite rate
review, certificate of need, and annual assessment requirements
and issue grants and loans 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.
(n) Notwithstanding any provision contained in this article
or section and any rule issued by the state agency, including
compliance with certificate of need requirements, any rural hospital with less than eighty licensed acute care beds as of the
first day of January, one thousand nine hundred ninety-eight, may
convert up to forty-four percent of existing licensed acute care
beds to skilled nursing beds for certification by both medicare
and medicaid for reimbursement purposes provided that the
following conditions are met:
(1) There is no overall increase in the bed capacity of the
hospital; one acute care bed is converted to one dually certified
medicare and medicaid skilled nursing bed.
(2) All converted acute care beds shall be permanently
deleted from the acute care bed compliment of the hospital, which
may not thereafter add, by conversion or otherwise, acute care
beds to its bed compliment without satisfying the requirements of
subdivision (4), subsection (b), section three of this article,
for which purposes the 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 as found in subsection (e), section two of this article.
(3) Prior to the conversion, the occupancy rate for licensed
acute care beds cannot exceed forty percent for twenty-four
consecutive months prior to the first month in which this section
is effective.
(4) The hospital shall meet all federal and state licensing
requirements for the provision of skilled nursing services. Additionally, all skilled nursing beds created under this
exemption shall be located in distinct long-term care units in a
previously constructed part of the hospital that can be used for
that purpose.
(5) The hospital is located in a nonmetropolitan statistical
area as defined by the bureau of the census of the federal
government and is located in the same city in which a hospital
providing mental health inpatient services owned and operated by
the state of West Virginia ceased offering the inpatient services
not later than one thousand nine hundred ninety.
(6) Nothing in this section negatively affects the rights of
inspection and certification which are elsewhere required by
federal law or regulations.