H. B. 4471
(By Mr. Speaker, Mr. Kiss, and Delegates Ashley
and Michael)
[Introduced February 18, 1998; referred to the
Committee on Finance.]
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; 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 administer the
certificate of need program as provided by this article.
(b) 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.
(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 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 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
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 for any medicaid reimbursement for any beds so converted.
In converting beds, the hospital must 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 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 demonstrate a need for the project.
(4) The hospital must 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 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 the
rights of inspection and certification which are otherwise
required by federal law or regulations or by this code of duly
adopted regulations of an authorized state entity.
(j) 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 applicable to projects submitted under this subsection. The health care
cost review authority shall adopt rules to implement this
subsection which shall include:
(1) A requirement that the one hundred eighty beds are to be
distributed on a statewide basis;
(2) There shall be a minimum of twenty beds and a maximum of
sixty beds in each approved unit;
(3) 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) The retirement center must demonstrate a need for the
project;
(5) The retirement center must offer personal care, home
health services and other lower levels of care to its residents;
and
(6) The retirement center must demonstrate both short and
long-term financial feasibility.
Nothing in this subsection shall negatively affect the
rights of inspection and certification which are otherwise
required by federal law or regulations or by this code of duly
adopted regulations 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) 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 section three of 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 section
six of this article.
(m) 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 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 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 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.
(n) 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.
(o) 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 acute care beds converted 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
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 as found in
subsection (e), section two of this article;
(3) Prior to such 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
such 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 such 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.
Note: The purpose of this bill is to permit an acute care
hospital, located in a rural county, to convert acute care beds
to skilled nursing beds provided certain conditions are met.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language
that would be added.