H. B. 2403
(By Delegates Warner, Pulliam and Coleman)
[Introduced March 4, 1997; 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.
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 which establishes rates for health care
facilities similar to those proposed; or
(9) Organizations representing health care providers.
(b) "Ambulatory health care facility" means a facility which
is free-standing and not physically attached to a health care
facility and which provides health care to noninstitutionalized
and nonhomebound persons on an outpatient basis. 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
such exemption from review of private office practice shall may
not be construed to include such practices where major medical
equipment otherwise subject to review under the provisions of
this article is acquired, offered or developed: Provided,
however, That such exemption from review of private office
practice shall may 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 facility which is
free-standing and not physically attached to a health care
facility and which provides surgical treatment to patients not
requiring hospitalization. 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 such
exemption from review of private office practice shall may not be
construed to include such practices where major medical equipment
otherwise subject to review under the provisions of this article
is acquired, offered or developed: Provided, however, That such
exemption from review of private office practice shall may 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.
(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 such 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 for which a
license is issued to a health care facility, or, if a facility is
unlicensed, the number of adult and pediatric beds permanently
staffed and maintained for immediate use by inpatients in patient
rooms or wards.
(f) "Capital expenditure" means an expenditure:
(1) Made by or on behalf of a health care facility; and
(2) (A) Which (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) which (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
the facility. For purposes of subparagraph (i), paragraph (B),
subdivision (2) of this definition, 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 with respect to which an
expenditure described in paragraph (B), subdivision (2) of this
definition is made shall be included in determining if such
expenditure exceeds the expenditure minimum. Donations of
equipment or facilities to a health care facility which if
acquired directly by such facility would be subject to review
shall be considered capital expenditures, and a transfer of
equipment or facilities for less than fair market value shall be
considered a capital expenditure for purposes of such
subdivisions if a transfer of the equipment or facilities at fair
market value would be subject to review. A series of
expenditures, each less than the expenditure minimum, which when
taken together are in excess of the expenditure minimum, may be
determined by the state agency to be a single capital expenditure subject to review. In making its 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.
(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) "Expenditure minimum" means seven hundred fifty
thousand dollars per fiscal year.
(h) (i) "Health," used as a term, includes physical and
mental health.
(i) (j) "Health care facility" is defined as including
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 and health maintenance organizations;
community mental health and mental retardation facilities,
whether under public or private ownership, or as a profit or
nonprofit organization and whether or not licensed or required to
be licensed in whole or in part by the state. 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 and consultation
and education for individuals with mental illness, mental
retardation or drug or alcohol addiction.
(j) (k) "Health care provider" means a person, partnership,
corporation, facility 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
care, treatment or confinement.
(k) (l) "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 United States Code Section 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),
subdivision (2), subsection (k) of this definition 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 primarily (i) directly
through physicians who are either employees or partners of such
organization, or (ii) through arrangements with individual
physicians or one or more groups of physicians organized on a
group practice or individual practice basis.
(l) (m) "Health services" means clinically related
preventive, diagnostic, treatment or rehabilitative services,
including alcohol, drug abuse and mental health services.
(m) (n) "Home health agency" is 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.
(n) (o) "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
such the persons' temporary or permanent residences by using an
interdisciplinary team, including, at a minimum, persons
qualified to perform nursing, social work services, the general
practice of medicine or osteopathy and pastoral or spiritual
counseling.
(o) (p) "Hospital" means an institution 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, or rehabilitation services for the rehabilitation of
injured, disabled or sick persons. This term also includes
psychiatric and tuberculosis hospitals.
(p) (q) "Intermediate care facility" means an institution
which provides, on a regular basis, health-related care and
services to individuals who do not require the degree of care and
treatment which a hospital or skilled nursing facility is designed to provide, but who, because of their mental or physical
condition, require health-related care and services above the
level of room and board.
(q) (r) "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. Each long-range plan shall consist of the information
required by the state agency in regulations adopted pursuant to
section eight of this article.
(r) (s) "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 which costs in excess of three hundred
thousand dollars, except that such 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 United States Code Sections 1395x
(10) and (11). In determining whether medical equipment costs
more than three hundred thousand dollars, 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.
(s) (t) "Medically underserved population" means the
population of an urban or rural area designated by the state
agency as an area with a shortage of personal health services or
a population having a shortage of such services, after taking
into account unusual local conditions which are a barrier to
accessibility or availability of such services. Such designation
shall be in regulations 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 United States Code Section 254(b)(3).
(t) (u) "New institutional health service" means such
service as described in section three of this article.
(u) (v) "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 for the provision of, specified
health services.
(v) (w) "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.
(w) (x) "Physician" means a doctor of medicine or osteopathy
legally authorized to practice by the state.
(x) (y) "Proposed new institutional health service" means
such service as described in section three of this article.
(y) (z) "Psychiatric hospital" means an institution which
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.
(z) (aa) "Rehabilitation facility" means an inpatient
facility which is 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.
(aa) (bb) "Review agency" means an agency of the state,
designated by the governor as the agency for the review of state
agency decisions.
(bb) (cc) "Skilled nursing facility" means an institution or a distinct part of an institution which is primarily engaged in
providing to inpatients skilled nursing care and related services
for patients who require medical or nursing care, or
rehabilitation services for the rehabilitation of injured,
disabled or sick persons.
(cc) (dd) "State agency" means the health care cost review
authority created, established and continued pursuant to article
twenty-nine-b of this chapter.
(dd) (ee) "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 health care planning council or
its successor agency.
(ee) (ff) "Health care planning council" means the body
established by section five-a of this article to participate in
the preparation and amendment of the state health plan and to
advise the state agency.
(ff) (gg) "Substantial change to the bed capacity" of a
health care facility means any change, with which a capital
expenditure is associated, 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 the addition of a health service which
is offered by or on behalf of the health care facility and 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, or the termination of a health service which was
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.