ENROLLED
Senate Bill No. 773
(By Senators Kessler, Dempsey, Fanning, Hunter, Minard, White, Barnes,
Caruth, Deem, Lanham, McKenzie and Weeks)
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[Passed March 11, 2006; in effect from passage.]
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AN ACT to amend and reenact §16-2D-1, §16-2D-5, §16-2D-6 and §16-
2D-9 of the Code of West Virginia, 1931, as amended, all
relating to certificate of need standards; establishing
standards for and guidance to the Health Care Authority in
making amendments and modifications to certificate of need
standards; setting forth factors for consideration in amending
or modifying certificate of need standards and rules;
identifying sources for consideration in amending or modifying
certificate of need standards and methodologies; providing
that applications for a certificate of need may be made
subject to criteria contained in certificate of need
standards; providing that decisions may be made by the Health
Care Authority on applications for certificate of need
standards based upon a review conducted in accordance with
certificate of need standards; and clarifying the certificate of need standards are not subject to legislative rulemaking.
Be it enacted by the Legislature of West Virginia:
That §16-2D-1, §16-2D-5, §16-2D-6 and §16-2D-9 of the Code of
West Virginia, 1931, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 2D. CERTIFICATE OF NEED.
§16-2D-1. Legislative findings.
It is declared to be the public policy of this state:
(1) That the offering or development of all new institutional
health services shall be accomplished in a manner which is orderly,
economical and consistent with the effective development of
necessary and adequate means of providing for the institutional
health services of the people of this state and to avoid
unnecessary duplication of institutional health services, and to
contain or reduce increases in the cost of delivering institutional
health services.
(2) That the general welfare and protection of the lives,
health and property of the people of this state require that the
type, level and quality of care, the feasibility of providing such
care and other criteria as provided for in this article, including
certificate of need standards and criteria developed by the state
agency pursuant to provisions of this article, pertaining to new
institutional health services within this state, be subject to review and evaluation before any new institutional health services
are offered or developed in order that appropriate and needed
institutional health services are made available for persons in the
area to be served.
§16-2D-5. Powers and duties of state agency.
(a) The state agency shall administer the certificate of need
program as provided by this article.
(b) The state agency 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. The state agency shall review the
state health plan, including the certificate of need standards and
make any necessary amendments and modifications. The state agency
shall also review the cost effectiveness of the certificate of need
program. The state agency may form task forces to assist it in
addressing these issues. The task forces shall be composed of
representatives of consumers, business, providers, payers and state
agencies.
(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
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 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 of this article and
subsection (i) of this section 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 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. The state agency shall establish a task
force or utilize an existing task force to study the need for
additional nursing facility beds in this state. The study shall
include a review of the current moratorium on the development of nursing facility beds; the exemption for the conversion of acute
care beds to skilled nursing facility beds; the development of a
methodology to assess the need for additional nursing facility
beds; and certification of new beds both by Medicare and Medicaid.
The task force shall be composed of representatives of consumers,
business, providers, payers and government agencies.
(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) of this
section and, further notwithstanding the provisions of subsection
(b), section three of this article, an existing acute care hospital
may apply to the Health Care 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 shall not bill for
any Medicaid reimbursement for any converted beds. In converting
beds, the hospital shall convert a minimum of one acute care bed into one Medicare-certified only skilled nursing bed. The Health
Care 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 the rural primary care
hospital is located in a county without a certified freestanding
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 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 (b), section three of this article for which purposes 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 (ff), 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 shall demonstrate a need for the project.
(4) The hospital 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 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 negatively affects the rights of inspection and
certification which are otherwise required by federal law or
regulations or by this code or duly adopted 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 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 is not applicable to projects submitted under
this subsection. The Health Care Authority shall adopt rules to
implement this subsection which shall include a requirement that:
(A) The one hundred eighty beds are to be distributed on a
statewide basis;
(B) There be a minimum of twenty beds and a maximum of sixty
beds in each approved unit;
(C) The unit developed by the retirement life care center
meets all federal and state licensing certification and operational
requirements applicable to nursing homes;
(D) The retirement center demonstrates a need for the project;
(E) The retirement center offers personal care, home health
services and other lower levels of care to its residents; and
(F) The retirement center demonstrates both short- and long-
term financial feasibility.
(2) Nothing in this subsection negatively affects the rights
of inspection and certification which are otherwise required by
federal law or regulations or by this code or duly adopted rules of
an authorized state entity.
(k) The state agency may order a moratorium upon the offering
or development of a new institutional health service, when criteria and guidelines for evaluating the need for the new institutional
health service have not yet been adopted or are obsolete. The
state agency may also order a moratorium on the offering or
development of a health service, notwithstanding the provisions of
subdivision (5), subsection (b), section three of this article,
when it determines that the proliferation of the service may cause
an adverse impact on the cost of health care or the health status
of the public. A 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
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 applications for
certificates of need are processed pursuant to section six of this
article.
(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, 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) When amending and modifying the certificate of need
standards, the state agency shall identify relevant criteria
contained in section six of this article or rules adopted pursuant
to section eight of this article, and apply those relevant criteria
to the proposed new institutional health service in a manner that
promotes the public policy goals and legislative findings contained
in section one of this article. In doing so, the state agency may
consult with or rely upon learned treatises in health planning,
recommendations and practices of other health planning agencies and
organizations, recommendations from consumers, recommendations from
health care providers, recommendations from third-party payors,
materials reflecting the standard of care, the state agency's own
developed expertise in health planning, data accumulated by the
state agency or other local, state or federal agency or
organization, and any other source deemed relevant to the
certificate of need standards proposed for amendment or
modification.
(3) 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 the proposed amendments or modifications, the
Governor shall either approve or disapprove all or part of 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.
(4) The certificate of need standards adopted pursuant to this
section which are applicable to the provisions of this article are
not subject to article three, chapter twenty-nine-a of this code.
The state agency shall follow the provisions set forth in this
subsection for giving notice to the public of its actions, holding
hearings or receiving comments on the certificate of need
standards. The certificate of need standards in effect on the
twenty-ninth day of November, two thousand five, and all prior
versions promulgated and adopted in accordance with the provisions
of this section, are and have been in full force and effect from
each of their respective dates of approval by the Governor.
(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.
§16-2D-6. Minimum criteria for certificate of need reviews.
(a) Except as provided in subsection (f), section nine of this
article, in making its determination as to whether a certificate of
need shall be issued, the state agency shall, at a minimum,
consider all of the following criteria that are applicable:
Provided, That the criteria set forth in subsection (f) of this
section apply to all hospitals, nursing homes and health care
facilities when ventilator services are to be provided for any
nursing facility bed:
(1) The relationship of the health services being reviewed to
the state health plan;
(2) The relationship of services reviewed to the long-range
development plan of the person providing or proposing the services;
(3) The need that the population served or to be served by the
services has for the services proposed to be offered or expanded,
and the extent to which all residents of the area, and in
particular low income persons, racial and ethnic minorities, women,
handicapped persons, other medically underserved population and the
elderly, are likely to have access to those services;
(4) The availability of less costly or more effective
alternative methods of providing the services to be offered, expanded, reduced, relocated or eliminated;
(5) The immediate and long-term financial feasibility of the
proposal as well as the probable impact of the proposal on the
costs of and charges for providing health services by the person
proposing the new institutional health service;
(6) The relationship of the services proposed to the existing
health care system of the area in which the services are proposed
to be provided;
(7) In the case of health services proposed to be provided,
the availability of resources, including health care providers,
management personnel, and funds for capital and operating needs,
for the provision of the services proposed to be provided and the
need for alternative uses of these resources as identified by the
state health plan and other applicable plans;
(8) The appropriate and nondiscriminatory utilization of
existing and available health care providers;
(9) The relationship, including the organizational
relationship, of the health services proposed to be provided to
ancillary or support services;
(10) Special needs and circumstances of those entities which
provide a substantial portion of their services or resources, or
both, to individuals not residing in the health service areas in
which the entities are located or in adjacent health service areas. The entities may include medical and other health professional
schools, multidisciplinary clinics and specialty centers;
(11) In the case of a reduction or elimination of a service,
including the relocation of a facility or a service, the need that
the population presently served has for the service, the extent to
which that need will be met adequately by the proposed relocation
or by alternative arrangements, and the effect of the reduction,
elimination or relocation of the service on the ability of low
income persons, racial and ethnic minorities, women, handicapped
persons, other medically underserved population and the elderly, to
obtain needed health care;
(12) In the case of a construction project: (A) The cost and
methods of the proposed construction, including the costs and
methods of energy provision; and (B) the probable impact of the
construction project reviewed on the costs of providing health
services by the person proposing the construction project and on
the costs and charges to the public of providing health services by
other persons;
(13) In the case of health services proposed to be provided,
the effect of the means proposed for the delivery of proposed
health services on the clinical needs of health professional
training programs in the area in which the services are to be
provided;
(14) In the case of health services proposed to be provided,
if the services are to be available in a limited number of
facilities, the extent to which the schools in the area for health
professions will have access to the services for training purposes;
(15) In the case of health services proposed to be provided,
the extent to which the proposed services will be accessible to all
the residents of the area to be served by the services;
(16) In accordance with section five of this article, the
factors influencing the effect of competition on the supply of the
health services being reviewed;
(17) Improvements or innovations in the financing and delivery
of health services which foster competition, in accordance with
section five of this article, and serve to promote quality
assurance and cost effectiveness;
(18) In the case of health services or facilities proposed to
be provided, the efficiency and appropriateness of the use of
existing services and facilities similar to those proposed;
(19) In the case of existing services or facilities, the
quality of care provided by the services or facilities in the past;
(20) In the case where an application is made by an
osteopathic or allopathic facility for a certificate of need to
construct, expand or modernize a health care facility, acquire
major medical equipment or add services, the need for that construction, expansion, modernization, acquisition of equipment or
addition of services shall be considered on the basis of the need
for and the availability in the community of services and
facilities for osteopathic and allopathic physicians and their
patients. The state agency shall consider the application in terms
of its impact on existing and proposed institutional training
programs for doctors of osteopathy and medicine at the student,
internship and residency training levels;
(21) The special circumstances of health care facilities with
respect to the need for conserving energy;
(22) The contribution of the proposed service in meeting the
health-related needs of members of medically underserved
populations which have traditionally experienced difficulties in
obtaining equal access to health services, particularly those needs
identified in the state health plan as deserving of priority. For
the purpose of determining the extent to which the proposed service
will be accessible, the state agency shall consider:
(A) The extent to which medically underserved populations
currently use the applicant's services in comparison to the
percentage of the population in the applicant's service area which
is medically underserved, and the extent to which medically
underserved populations are expected to use the proposed services
if approved;
(B) The performance of the applicant in meeting its
obligation, if any, under any applicable federal regulations
requiring provision of uncompensated care, community service or
access by minorities and handicapped persons to programs receiving
federal financial assistance, including the existence of any civil
rights access complaints against the applicant;
(C) The extent to which Medicare, Medicaid and medically
indigent patients are served by the applicant; and
(D) The extent to which the applicant offers a range of means
by which a person will have access to its services, including, but
not limited to, outpatient services, admission by a house staff and
admission by personal physician;
(23) The existence of a mechanism for soliciting consumer
input into the health care facility's decision-making process.
(b) The state agency may include additional criteria which it
prescribes by rules adopted pursuant to section eight of this
article.
(c) Criteria for reviews may vary according to the purpose for
which a particular review is being conducted or the types of health
services being reviewed.
(d) An application for a certificate of need may not be made
subject to any criterion not contained in this article, in rules
adopted pursuant to section eight of this article or in the certificate of need standards approved pursuant to section five of
this article.
(e) In the case of any proposed new institutional health
service, the state agency may not grant a certificate of need under
its certificate of need program unless, after consideration of the
appropriateness of the use of existing facilities providing
services similar to those being proposed, the state agency makes,
in addition to findings required in section nine of this article,
each of the following findings in writing: (1) That superior
alternatives to the services in terms of cost, efficiency and
appropriateness do not exist and the development of alternatives is
not practicable; (2) that existing facilities providing services
similar to those proposed are being used in an appropriate and
efficient manner; (3) that in the case of new construction,
alternatives to new construction, such as modernization or sharing
arrangements, have been considered and have been implemented to the
maximum extent practicable; (4) that patients will experience
serious problems in obtaining care of the type proposed in the
absence of the proposed new service; and (5) that in the case of a
proposal for the addition of beds for the provision of skilled
nursing or intermediate care services, the addition will be
consistent with the plans of other agencies of the state
responsible for the provision and financing of long-term care facilities or services including home health services.
(f) In the case where an application is made by a hospital,
nursing home or other health care facility to provide ventilator
services which have not previously been provided for a nursing
facility bed, the state agency shall consider the application in
terms of the need for the service and whether the cost exceeds the
level of current Medicaid services. No facility may, by providing
ventilator services, provide a higher level of service for a
nursing facility bed without demonstrating that the change in level
of service by provision of the additional ventilator services will
result in no additional fiscal burden to the state.
(g) In the case where application is made by any person or
entity to provide personal care services which are to be billed for
Medicaid reimbursement, the state agency shall consider the
application in terms of the need for the service and whether the
cost exceeds the level of the cost of current Medicaid services. No
person or entity may provide personal care services to be billed
for Medicaid reimbursement without demonstrating that the provision
of the personal care service will result in no additional fiscal
burden to the state: Provided, That a certificate of need is not
required for a person providing specialized foster care personal
care services to one individual and those services are delivered in
the provider's home. The state agency shall also consider the total fiscal liability to the state for all applications which have
been submitted.
§16-2D-9. Agency to render final decision; issue certificate of
need; write findings; specify capital expenditure
maximum.
(a) Only the state agency, or the appropriate administrative
or judicial review body, may issue, deny or withdraw certificates
of need, grant exemptions from certificate of need reviews or
determine that certificate of need reviews are not required.
(b) A certificate of need may only be issued if the proposed
new institutional health service is:
(1) Found to be needed; and
(2) Except in emergency circumstances that pose a threat to
public health, consistent with the state health plan.
(c) The state agency shall render a final decision on every
application for a certificate of need or application for exemption
in the form of an approval, a denial or an approval with
conditions. Any decision of the state agency with respect to a
certificate of need, or exemption, shall be based solely on:
(1) The review of the state agency conducted in accordance
with procedures and criteria in this article, in rules
adopted
pursuant to section eight of this article and in the certificate of
need standards approved pursuant to section five of this article; and
(2) The record established in administrative proceedings held
with respect to the certificate of need or exemption.
(d) Approval with conditions does not give the state agency
authority to mandate new institutional health services not proposed
by the health care facility or health maintenance organization.
Issuance of a certificate of need or exemption may not be made
subject to any condition unless the condition directly relates to
criteria in this article, in rules adopted pursuant to section
eight of this article or in the certificate of need standards
approved pursuant to section five of this article. Conditions may
be imposed upon the operations of the health care facility or
health maintenance organization for no longer than a three-year
period. Compliance with such conditions may be enforced through the
mechanisms detailed in section thirteen of this article.
(e) (1) For each proposed new institutional health service it
approves, the state agency shall, in addition to the written
findings required in subsection (e), section six of this article,
make a written finding, which shall take into account the current
accessibility of the facility as a whole, on the extent to which
the new institutional health service will meet the criteria in
subdivisions (3), (11) and (22), subsection (a), section six of
this article, regarding the needs of medically underserved
population, except in the following cases:
(A) Where the proposed new institutional health service is one
described in subsection (f) of this section to eliminate or prevent
certain imminent safety hazards or to comply with certain licensure
or accreditation standards; or
(B) Where the new institutional health service is a proposed
capital expenditure not directly related to the provision of health
services or to beds or major medical equipment.
(2) If the state agency disapproves a proposed new
institutional health service for failure to meet the needs of
medically underserved populations, it shall so state in a written
finding.
(f) (1) Notwithstanding review criteria in section six of this
article, an application for a certificate of need shall be
approved, if the state agency finds that the facility or service
with respect to which such capital expenditure is proposed to be
made is needed and that the obligation of such capital expenditure
is consistent with the state health plan, for a capital expenditure
which is required:
(A) To eliminate or prevent imminent safety hazards as defined
by federal, state or local fire, building or life safety codes,
rules or regulations;
(B) To comply with state licensure standards; or
(C) To comply with accreditation or certification standards,
compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under the state
plan for medical assistance approved under Title XIX of such act.
(2) An application for a certificate of need approved under
this subsection shall be approved only to the extent that the
capital expenditure is required to eliminate or prevent the hazards
described in subparagraph (A), subdivision (1), subsection (f) of
this section, or to comply with the standards described in either
subparagraph (B) or (C), subdivision (1), subsection (f) of this
section.
(g) The state agency shall send its decision along with
written findings to the person proposing the new institutional
health service or exemption and shall make it available to others
upon request.
(h) In the case of a final decision to approve or approve with
conditions a proposal for a new institutional health service, the
state agency shall issue a certificate of need to the person
proposing the new institutional health service.
(i) The state agency shall specify in the certificate the
maximum amount of capital expenditures which may be obligated under
such certificate. The state agency shall prescribe the method used
to determine capital expenditure maximums and shall adopt rules
pursuant to section eight of this article for the review of
approved new institutional health services for which the capital
expenditure maximum is exceeded or is expected to be exceeded.
(j) If the state agency fails to make a decision within the
time period specified for the review, the applicant may, within one
year following the expiration of such period, bring an action, at
the election of the applicant, in either the circuit court of
Kanawha County, or with the judge thereof in vacation, or in the
circuit court of the county in which the applicant or any one of
the applicants resides or does business, or with the judge thereof
in vacation to require the state agency to approve or disapprove
the application. An application for a proposed new institutional
health service or exemption may not be approved or denied by the
circuit court solely because the state agency failed to reach a
decision.
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