H. B. 2251
(By Mr. Speaker (Mr. Chambers) and Delegate Ashley)
(By Request of the Executive)
[Introduced January 26, 1995; referred to the
Committee on Government Organization then Finance.]
A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article one-b, relating to
the preservation and enhancement of rural health
infrastructure through the authorization and regulation of
rural health care networks; the creation of a rural health
care network board; the assignment of staff resources from
the department of health and human resources; the employment
of an executive director for purposes of supervising rural
health care networks; the creation of powers for the rural
health care network board; the designation of the board's
membership; the authorization of preliminary discussions by
health care providers of rural health care network
formation; the requirements for certification by the rural
health care network board of rural health care network
coordination agreements and rural health care networks; the
procedural requirements for certification of rural health care coordination agreements and rural health care networks;
the standard and criteria for approval of rural health care
network coordination agreements and rural health care
networks; the continuing nature of certificate of need
requirements; the supervision of rural health care networks
and the use of rural health care network monitors; the
standards and procedures for modification or termination of
approval of rural health care networks; the time limitation
on accepting or granting applications related to the
formation of rural health care networks; and the designation
of a termination date for the rural health care network
program.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article one-b, to read
as follows:
ARTICLE 1B. RURAL HEALTH INFRASTRUCTURE PRESERVATION AND
ENHANCEMENT ACT.
§16-1B-1. Statement of legislative intent.
The Legislature finds that the following are true: (1) That
the increasingly centralized control of health care resources
threatens the continued provision of essential and primary health
care services in rural areas of West Virginia; (2) that loss of
such services would force residents in rural areas of West
Virginia to travel long distances for primary and essential health care services, thereby placing the physical health and
safety of such residents at risk; (3) that health care providers
and consumers in certain threatened areas may desire to work
voluntarily together to form integrated health care networks to
plan, organize, and preserve their essential and primary health
care services; (4) that federal law prohibits competing rural
providers and consumers from voluntarily working together unless
the state becomes actively involved in initially approving and
regulating proposed voluntary networks; and (5) that any
voluntary rural health care network formed pursuant to this
article shall be of limited duration.
Nothing contained within this article is intended to require
any existing or future managed care provider, or other health
care provider, to comply with the terms of this article in order
to operate within any market, including any rural health care
market affected by the authorization of a rural health care
network pursuant to the terms of this article.
§16-1B-2. Definitions.
For purposes of this article, the following terms shall have
the meanings set forth in this section:
(a) "Agreement" means a rural health network care
coordination agreement as that term is defined in this section;
(b) "Board" means the rural health care network board created
by this article;
(c) "Department" means the department of health and human
resources;
(d) "Network" means a rural health care network as that term
is defined in this section;
(e) "Rural health care market" means a geographic area
defined by the rural health care network board by rule within
which the board finds that the continued existence of one or more
health care services, provided by local health care providers
within that geographic area, may be threatened, unless a rural
health care network is formed;
(f) "Rural health care network" means a nonprofit corporation
established by two or more health care providers in a rural
health care market which exists for the purpose of implementing
a rural health care network coordination agreement, as defined in
this article, and which has been approved by the rural health
care network board pursuant to the provisions of this article,
including section nine of this article;
(g) "Rural health care network coordination agreement" means
a non-exclusive agreement among two or more health care
facilities or other health care providers for the sharing,
allocation, or referral of patients, personnel, instructional
programs, equipment, support services and facilities, or medical,
diagnostic, or laboratory facilities or procedures or other
services traditionally offered or purchased by health care
facilities or other health care providers;
(h) "Rural primary health care provider" means an individual
or entity that has traditionally served as a provider of primary
health care services within a rural health care market; and
(i) "Secretary" means the secretary of the department of
health and human resources.
§16-1B-3. Rural health care network board.
(a) There is hereby created the rural health care network
board which shall be an agency within the department. The board
shall consist of thirteen members, one of whom shall be the
secretary, or his or her designee, who shall also serve as
chairperson of the board. The other twelve members of the board
shall be chosen by the governor with the advice and consent of
the Senate and shall consist of the following:
(1) One member who is a licensed primary care physician,
practicing and residing within the state;
(2) One member who is either a nurse practitioner or a
physician's assistant, practicing and residing within the state;
(3) Two members who are health insurance payor
administrators, employed and residing within the state;
(4) One member, residing within the state, who is a hospital
administrator of a hospital within the state with fewer than one
hundred patient beds;
(5) One member, residing within the state, who is a hospital
administrator of a hospital within the state with one hundred
patient beds or more;
(6) One member who represents the health sciences programs
of the state university system;
(7) One member who represents the interests of primary care
centers operating in the state;
(8) One member who represents the interests of public health
providers operating in the state;
(9) One member who represents the interests of emergency
medical services providers operating in the state; and
(10) Two members who are not employed in the health care
field, residing within the state;
(b) The twelve members of the board other than the secretary,
or his or her designee, shall each serve terms that commence on
the first day of May, one thousand nine hundred ninety-five. Of
the initial appointments to the board, four shall serve for one-
year terms, four shall serve for two-year terms, and four shall
serve for three-year terms. Thereafter, each appointment shall
be for a three-year term commencing upon the expiration of the
term of his or her previous term or of his or her predecessor's
terms. 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.
(c) The presence of seven members of the board shall
constitute a quorum for purposes of conducting the business of
the board: Provided, That the concurrent judgment of seven board
members when in session as the board shall be required to take
any action.
§16-1B-4. Staff.
The secretary shall provide, on an as-needed basis, such staff members necessary to effectuate the provisions of this
article from the existing personnel resources of the department:
Provided, That the board may employ a full-time executive
director.
§16-1B-5. Powers generally; budget expenses of the board.
(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, 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
creation and administration of rural health care networks 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, grants,
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
any entity or individual subject to the provisions of this article), and enter into agreements with respect thereto,
including the undertaking of studies, plans, demonstrations or
projects: Provided, That any such gifts, payments or other funds
shall be placed by the treasurer in a special revenue account,
which funds shall be subject to reappropriation by the
Legislature to such account at the end of each fiscal year;
(4) With the approval of the secretary, 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 the 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 secretary, the governor and the
Legislature which shall include all sums necessary to support the
activities of the board.
(c) Each member of the board shall receive no compensation for his or her services as a member, but subject to any other
applicable law regulating travel and other expenses for a state
officer, he or she shall receive his or her actual and necessary
travel and other expenses incurred in the performance of his or
her official duties.
§16-1B-6. Board authorization of preliminary discussions by
health care providers of rural health care network
formation.
(a) Health care providers that are considering the creation
of a rural health care network may apply to the board, on an
application form prescribed by the board, for authorization to
engage in negotiations aimed at the execution of a rural health
care network coordination agreement. Such applications, if
granted by the board, shall be for specific and limited periods
of time and for the limited purpose of drafting and executing a
rural health care network coordination agreement: Provided, That
no such authorization shall exceed ninety days: Provided,
however, That such authorizations by the board shall not be
subject to the procedural requirements set forth in section eight
of this article.
(b) The board shall promulgate procedural rules, on or
before the first day of July, one thousand nine hundred
ninety-five, governing the process to be utilized by health care
providers and the board in granting such authorizations. These
rules shall include provisions requiring the active supervision
and participation by the board or its staff in any discussions by health care providers pursuant to the terms of this section.
§16-1B-7. Application requirements for board certification of
rural health care network coordination agreements and
rural health care networks.
The parties to a rural health care network coordination
agreement may apply to the board for approval of that agreement
and for approval of the rural health care network proposed by
that agreement. The application shall be on a form prescribed by
the board and shall include the following:
(a) A copy of the proposed rural health care network
coordination agreement, and a listing of all legal and natural
persons that are parties to the agreement or that are proposed
participants in the rural health care network called for by the
agreement;
(b) A detailed description of the nature and scope of the
cooperation and joint activities contemplated by the proposed
rural health care network coordination agreement;
(c) A detailed description of the assets, stock, money or
other consideration passing to and among the parties to the rural
health care network coordination agreement and passing to and
among the parties to the proposed rural health care network;
(d) An explanation of how the standards for approval, set
forth in section nine of this article, apply to the particular
rural health care network proposal under consideration;
(e) An analysis of whether the health care market served by
the proposed rural health care network meets the definition of rural health care market as set forth pursuant to this article;
(f) A description of how the participants in the proposed
network will continue the traditional health care provider
training programs that exist, at the time of the filing of the
rural health care network application, within the facilities
maintained by participants in the proposed rural health care
network; and
(g) Any other material that the board may require, pursuant
to the regulations promulgated by the board and that is
reasonably related to the approval of a rural health care
network coordination agreement or a rural health care network.
§16-1B-8. Procedural requirements for board certification of
rural health care coordination agreements and rural
health care networks.
(a) The board shall review all submitted applications and
conduct such hearings as it deems necessary for the proper
approval or disapproval of a rural health care network and shall
hold hearings when required by provisions of this chapter or upon
the written demand therefor by a person aggrieved by any act or
failure to act by the board, or when required by any rule,
regulation or order of the board. All hearings of the board
shall be noticed and conducted in the manner set forth in section
one, article five, chapter twenty-nine-a of this code. All
hearings of the board shall be announced in the manner set forth
in article nine-a, chapter six of this code, and such hearings
shall be open to the public except as otherwise provided by said 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. The board or
the hearing examiner may issue subpoenas and subpoenas duces
tecum which shall be issued and served pursuant to the time, fee
and enforcement specifications set forth in section one, article
five, chapter twenty-nine-a of this code.
(d) Following any hearing, and due deliberation thereof, and
in consideration of the total record made, the board shall either
grant or deny the application in writing. The written grant or
denial may be accompanied by whatever findings and conclusions
the board deems necessary, but the decision need not comply with
the provisions of section three, article five, chapter
twenty-nine-a of this code. A copy of the board's decision shall
be served by first class mail on the party demanding the hearing,
or upon that party's designated agent, if any.
(e) In no case shall the procedure set forth in this section
take longer than one hundred twenty days to complete, such period
to commence upon the date of the filing of an application.
§16-1B-9. Standard for approval by the board of rural health
care network coordination agreements and rural health care networks; criteria.
(a) The board shall approve a rural health care network
coordination agreement and proposed rural health care network if
it determines that such agreement and network are likely to
maintain and improve the cost effectiveness, availability,
quality or delivery of hospital or other health care services in
the affected rural health care market and that such agreement and
network are consistent with other state statutory health care
policies and programs. The board shall also take into
consideration, before approving a rural health care network
coordination agreement and proposed rural health care network,
the benefits of any reduction or elimination of competition in
the affected rural health care market, and whether such benefits
equal or exceed the disadvantages of any such reduction or
elimination of competition. The board may impose such reasonable
and related conditions and restrictions on the parties to the
coordination agreement as it deems necessary to assure compliance
with the standard set forth in this subsection.
(b) In determining whether a rural health care network
coordination agreement and a proposed rural health care network
meet the standard set forth in subsection (a) of this section,
the board shall consider whether such agreement and proposed
network meet the following criteria:
(1) The agreement and network serve a rural health care
market, as that term is defined pursuant to this article;
(2) The agreement and network provide for a nonexclusive relationship among the health care providers participating in the
agreement and network such that each provider can contract with
other health care entities that are not parties to the agreement
or members of the network;
(3) The agreement and network provide for the inclusion of
each rural primary health care provider in the applicable rural
health care market to the extent that each primary health care
provider seeks to participate on reasonable terms in the
agreement and network;
(4) The agreement and network seek to foster the
redistribution and rearrangement of existing health care
resources within an existing rural health care market, rather
than the creation or construction of new programs or facilities;
(5) The agreement and network enhance the availability or
quality of hospital or other health care services provided to
consumers in rural health care markets in West Virginia;
(6) The agreement and network preserve hospitals or other
health care facilities or providers within geographic proximity
to the communities traditionally served by such hospitals,
facilities or providers;
(7) The agreement and network reduce the cost of services
provided by the health care providers involved;
(8) The agreement and network increase the efficiency with
which services are provided by the health care providers
involved;
(9) The agreement and network improve the utilization of existing health care resources and existing capital equipment in
the rural health care market involved;
(10) The agreement and network reduce or eliminate
unnecessary duplication of health care resources;
(11) The agreement and network provide for the exploration
and utilization of technology aimed at improving the
administration and delivery of health care services in the
affected markets;
(12) The agreement and network are supported by health care
consumers in the affected rural health care market;
(13) The agreement and network assure the maintenance of
adequate and appropriate acute care services, of adequate and
appropriate primary care services, of adequate and appropriate
emergency medical services, and of adequate and appropriate
public health services;
(14) The agreement and network expire on or before the
thirtieth day of June, two thousand;
(15) The agreement and network provide for a transition of
the network from state protection under the terms of this article
to unprotected status on or before the thirtieth day of June, two
thousand; and
(16) The agreement and network meet such other criteria as
the board, by rule, shall deem appropriate or necessary.
§16-1B-10. Certificate of need requirements applicable; other
licensure requirements.
Nothing contained within this article shall be construed to immunize or exclude any person or entity from the provisions of
article two-d, chapter sixteen of this code, nor shall any
provision of this article be construed to limit the application
of any other statute concerning the licensure of facilities,
services, or professions and any activities, undertaken pursuant
to a rural health care network coordination agreement or through
a rural health care network, shall comply with all applicable
law.
§16-1B-11. Supervision of rural health care networks by the
board; network monitors; reporting.
(a) Once a rural health care network coordination agreement
and a rural health care network have been approved by the board,
the board shall designate a network monitor to regularly review
the activities of that network. A network monitor shall have
full and immediate access, upon request of the monitor or the
board, to any information, materials, or personnel maintained or
employed by his or her assigned rural health care network or by
any participating provider in that network. Each network shall
provide its network monitor with reasonable written notice prior
to all meetings among officers, directors, or key personnel of
the network or of any participating provider in a rural health
care network. A network monitor shall have full and immediate
access to all meetings among officers, directors or key personnel
of the network, or of any participant provider in a rural health
care network.
(b) Each rural health care network shall provide the board with a semiannual report on the thirty-first day of December and
on the thirtieth day of June of each calendar year. These
reports shall contain an evaluation by each network of its
continuing compliance with the criteria set forth in section nine
of this article, as well as any other information which the board
may require by rule. The board may require, at any time, such
additional reports as it deems necessary to its continuing
supervision of rural health care networks approved pursuant to
the provisions of this article.
§16-1B-12. Modification or termination of board approval of
network; standards; procedures.
(a) The board, upon the request of any network monitor or
any participant in a network, or, notwithstanding the
requirements of subsection (c), section three of this article,
upon its own motion approved by at least five members of the
board, may modify or terminate its original approval of a rural
health care network coordination agreement and a rural health
care network if it determines that:
(1) The board's original approval of the agreement and
network was procured by fraud or other material
misrepresentation;
(2) The parties to the agreement or the participants in the
network have failed, in some material respect, to comply with the
terms of this article, to comply with the terms of the agreement
as approved by the board, to maintain the structure of the
network as approved by the board or to abide by the terms of the board's original decision approving the agreement and network;
(3) The parties to the agreement or the participants in the
network have failed or refused to comply with the monitoring or
reporting requirements of section eleven of this article; or
(4) The agreement or network no longer meets the standard or
criteria for approval set forth in section nine of this article.
(b) If the board shall commence, based on its own motion or
otherwise, a proceeding to modify or terminate an agreement or
network that it originally approved, the board shall provide an
opportunity for a hearing in accordance with the provisions of
section eight of this article, and notice of such hearing shall
be given to all parties subject to the agreement, all
participants in the network and any other parties admitted to any
previous proceeding involving the agreement.
(c) The termination of any approval of a rural health care
network coordination agreement or rural health care network
pursuant to the provisions of this section shall be prospective
in application.
§16-1B-13. Time limitation on accepting or granting applications
for negotiations, agreements and networks.
(a) Notwithstanding any other provision of this article to
the contrary, no application for approval of preliminary network
negotiations, pursuant to the provisions of section six of this
article, may be accepted or granted after the thirty-first day of
December, one thousand nine hundred ninety-eight.
(b) Notwithstanding any other provision of this article to the contrary, no application for approval of a rural health care
network coordination agreement and rural health care network,
pursuant to the provisions of section seven of this article, may
be accepted or granted after the thirtieth day of June, one
thousand nine hundred ninety-nine.
§16-1B-14. Termination date.
The board shall terminate on the thirtieth day of June, two
thousand, unless extended by legislation before that date.
NOTE: The purpose of the bill is to establish a board, to
be staffed by existing personnel, to oversee and facilitate the
creation of health care networks in rural areas between existing
providers and facilities. The bill preserves existing providers
and facilities in such areas.
This article is new; therefore, strike-throughs and
underscoring have been omitted.