COMMITTEE SUBSTITUTE

FOR

COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 137
(By Senators Tomblin, Mr. President, and Boley,
By Request of the Executive)
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[Originating in the Committee on Finance;
reported March 1, 1995.]
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A BILL to amend and reenact section three, article two-d, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to further amend said article by adding thereto a new section, designated section five-a; and to further amend said chapter by adding thereto a new article, designated article thirty-five, all relating to certificate of need requirements for new hospice services; authorizing the health care cost review authority to amend the certificate of need standards and the state health plan; authorizing the health care cost review authority to declare a limited moratorium for purposes of amending or modifying obsolete or nonexistent standards; creating the office of health information and analysis as a distinct unit of the state agency; setting forth the purpose of the office; creating an advisory council and designating membership; authorizing the access of health data from state agencies; creating a special revenue fund; requiring the transfer of funds from other state agencies; authorizing purchases of health information and management services; and providing for a termination date.

Be it enacted by the Legislature of West Virginia:
That section three, article two-d, chapter sixteen of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that said article be further amended by adding thereto a new section, designated section five- a; and that said chapter be further amended by adding thereto a new article, designated article thirty-five, all to read as follows:
ARTICLE 2D. CERTIFICATE OF NEED.

§16-2D-3. Certificate of need.

Except as provided in section four of this article, any new institutional health service may not be acquired, offered or developed within this state except upon application for and receipt of a certificate of need as provided by this article. Whenever a new institutional health service for which a certificate of need is required by this article is proposed for a health care facility for which, pursuant to section four of this article, no certificate of need is or was required, a certificate of need shall be issued before the new institutional health service is offered or developed. No person may knowingly charge or bill for any health services associated with any new institutional health service that is knowingly acquired, offered or developed in violation of this article and any bill made in violation of this section is legally unenforceable. For purposes of this article, a proposed "new institutional health service" includes:
(a) The construction, development, acquisition or other establishment of a new health care facility or health maintenance organization;
(b) The partial or total closure of a health care facility or health maintenance organization with which a capital expenditure is associated;
(c) Any obligation for a capital expenditure incurred by or on behalf of a health care facility, except as exempted in section four of this article, or health maintenance organization in excess of the expenditure minimum or any obligation for a capital expenditure incurred by any person to acquire a health care facility. An obligation for a capital expenditure is considered to be incurred by or on behalf of a health care facility:
(1) When a contract, enforceable under state law, is entered into by or on behalf of the health care facility for the construction, acquisition, lease or financing of a capital asset;
(2) When the governing board of the health care facility takes formal action to commit its own funds for a construction project undertaken by the health care facility as its own contractor; or
(3) In the case of donated property, on the date on which the gift is completed under state law;
(d) A substantial change to the bed capacity of a health care facility with which a capital expenditure is associated;
(e) (1) The addition of health services which are offered by or on behalf of a health care facility or health maintenance organization and which were not offered on a regular basis by or on behalf of the health care facility or health maintenance organization within the twelve-month period prior to the time the services would be offered; and
(2) The addition of ventilator services for any nursing facility bed by any health care facility or health maintenance organization;
(f) The deletion of one or more health services, previously offered on a regular basis by or on behalf of a health care facility or health maintenance organization which is associated with a capital expenditure;
(g) A substantial change to the bed capacity or health services offered by or on behalf of a health care facility, whether or not the change is associated with a proposed capital expenditure, if the change is associated with a previous capital expenditure for which a certificate of need was issued and if the change will occur within two years after the date the activity which was associated with the previously approved capital expenditure was undertaken;
(h) The acquisition of major medical equipment;
(i) A substantial change in an approved new institutional health service for which a certificate of need is in effect. For purposes of this subdivision, "substantial change" shall be defined by the state agency in regulations adopted pursuant to section eight of this article;
(j) An expansion of the service area of any entity which provides hospice or home health services, regardless of the time period in which the expansion is proposed or made.

§ 16-2D-5a. State health plan; moratorium.

(a) The state agency shall be 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.
(b) When the state agency proposes amendments or modifications to the state health plan, 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.
All proposed amendments and modifications to the state health plan, 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 proposed amendments or modifications, the governor shall either approve or disapprove all or part of said 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.
(c) The state agency is hereby empowered to order a moratorium upon the processing of an application or applications for the development of a new institutional health service filed pursuant to this article, when criteria and guidelines for evaluating the need for such new institutional health service have not yet been adopted or are obsolete. Such 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 this article.
ARTICLE 35. OFFICE OF HEALTH INFORMATION AND ANALYSIS.

§16-35-1. Findings.

The Legislature finds that:
(1) Successful efforts to control the state's rapidly escalating health care costs depend on the state's policymakers having access to accurate and timely information about the full range of health care services and programs offered by the state;
(2) Gathering and analyzing health information in a manner that is useful to policymakers is a complicated and potentially costly task requiring specialized knowledge of health care policy and computerized information systems;
(3) Various state health programs independently collect state health information from at least eighty-five different health-related data bases with nominal interagency coordination;
(4) The large number of persons insured by state health programs requires that state government participate effectively in the development of private and public sector electronic and community health information systems;
(5) The public and the state's policymakers find it extremely difficult to obtain comprehensive health information and analysis because of the numerous sources of such information and other barriers;
(6) No place exists in state government that has the expertise, technical resources and authority to coordinate the collection and dissemination of all health care information needed by policymakers, the private sector and the public; and
(7) State health programs, policymakers, the private sector and the public can benefit by pooling expertise, resources and authority from various state health programs into a single office to meet the state's health information and analysis needs.
§16-35-2. Office of health information and analysis.

There is hereby created the office of health information and analysis, to be a distinct unit in the health care cost review authority. The purpose of the office is to gather and analyze health care related data. The office shall have a director appointed by the health care cost review authority and adequate staff to be employed pursuant to section seven, article twenty- nine-b of this chapter. The office shall:
(a) Coordinate the collection and analysis of health care information by state health programs;
(b) Make accurate, timely and useful health care information available to policymakers and to the public for health planning and policy purposes;
(c) Work specifically with the secretary of health and human resources to improve the medicaid program's ability to provide policymakers with timely, accurate and useful information;
(d) Work specifically with the commissioner of employment programs to improve the workers' compensation program's ability to provide policymakers with timely, accurate and useful information;
(e) Facilitate and support the development of statewide health information systems that will allow for the electronic transmittal of all health information and claims processing activities within the state and that will coordinate the development and use of electronic health information systems within state government;
(f) Establish minimum requirements and complementary reports for the information systems of all state health programs, including simplifying and standardizing forms, establishing information standards and reports for capitated managed care programs to be managed by the insurance commission and defining and recommending a comprehensive system to collect ambulatory health care data to be managed by the health care cost review authority; and
(g) Coordinate the collection of information needed to allow the health care cost review authority to develop recommended modifications to certificate of need standards as required in article two-d of this chapter.

§16-35-3. Advisory council.

To assist the office of health information and analysis in the performance of its duties, an advisory council is hereby created consisting of one representative each from the public employees insurance agency, the health care cost review authority commissioners, the workers' compensation commission, the insurance commission, the state medicaid program, the bureau of public health, the office of community and rural health services, the office of the vice-chancellor for health sciences and such other state health programs as necessary, plus six citizen members who shall be chosen by the governor and shall consist of the following: Two persons representing private sector health care providers, two persons representing private sector purchasers and two persons representing consumers. The terms of each member shall be for three years, except that of those initially appointed, two shall be appointed for one year, two shall be appointed for two years and two shall be appointed for three years. The governor shall make the initial appointments to the board no later than the first day of September, one thousand nine hundred ninety-five. Citizen members may be reimbursed by the office for reasonable travel expenses incurred in the exercise of his or her official duties.
§16-35-4. Access to state health program data bases.

The office of health information and analysis is authorized to gain access to any health-related database in state government for the purposes of fulfilling its duties: Provided, That, for any database to which the office gains access, the office of health information and analysis shall be required to abide by all the confidentiality provisions applicable to the state health program managing that database.

§16-35-5. Office of health information and analysis fund.

In order to fund the office of health information and analysis, there is hereby created in the state treasury a special revolving fund to be known and designated as the "office of health information and analysis fund". This fund shall consist of appropriations made by the Legislature, funds received from other state agencies and funds received from grants, contracts or donations from other sources for services or other activities undertaken by the office of health information and analysis in order to comply with the purposes of this section. The fund shall initially receive two hundred thousand dollars from the health care cost review authority account, fund 5375-513, and one hundred thousand dollars from the insurance commission account, fund 7152-099. Each state agency managing a health-related database is hereby authorized and directed to transmit to the office of health information and analysis for deposit in said special fund the charges made by the office of health information and analysis for services rendered to that agency relating to the coordination and analysis of health care information. For fiscal years one thousand nine hundred ninety-six and thereafter, such charges shall be fixed in a schedule or schedules approved by the secretary of the department of health and human resources and may be paid in advance of such services being rendered.

§16-35-6. Purchasing of health information and services.

The office of health information and analysis is hereby authorized to purchase health information and management services on behalf of any state health program, or combination of state health programs, upon approval of the secretary of each department in which such state health program or programs are located. Said purchases of health information and management services shall not be subject to the purchasing provisions of article three, chapter five-a of this code: Provided, That before entering into any such contract for a sum greater than ten thousand dollars, the office of health information and analysis shall invite bids from all vendors qualified to provide the requested services, deal directly with such vendors in presenting specifications and receiving quotations for bid purposes, and evaluate bids on a competitive basis, taking into account the experience of the offering vendor, the quality of the vendor's services, and the costs of the vendor's proposal.

§16-35-7. Termination.

The office of health information and planning shall terminate on the first day of July, one thousand nine hundred ninety-eight, unless extended by legislation prior to that date.