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SB469 SUB1 Senate Bill 469 History

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Key: Green = existing Code. Red = new code to be enacted
COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 469

(By Senators Tomblin, Mr. President, and Boley,

By Request of the Executive)

____________

[Originating in the Committee on Health and Human Resources;

reported February 28, 1995.]

____________

A BILL to repeal articles four-b and four-c, chapter nine of
the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact section two, article one of said chapter; to amend and reenact section nine, article two of said chapter; to further amend said article by adding thereto a new section, designated section nine-a; to amend and reenact section two, article four of said chapter; to amend and reenact section two-b, article four-a of said chapter; to amend and reenact section twenty-a, article thirteen-a, chapter eleven of said code; to amend and reenact sections one and three, article twenty-six of said chapter; to amend and reenact section thirty-two, article twenty-seven of said chapter; to amend and reenact sections two, three, five and six, article two- d, chapter sixteen of said code; and to further amend said article by adding thereto a new section, designated section three-a, all relating generally to the state's medicaid program; repealing the physician/medical practitioner provider medicaid enhancement board and health care provider medicaid enhancement board; defining certain terms relating to the human services programs, including the medicaid program; directing the secretary to expand the aged and disabled waiver program and to decrease or eliminate other optional programs if additional funding is needed for that expansion; authorizing the secretary to execute contracts for professional health care, managed care and actuarial services; Designating health care providers as qualified providers of service; prohibiting exclusion of licensed health care providers; prohibiting offers of gifts of value as marketing techniques directed toward medicaid managed care enrollees; requiring the consideration of essential community providers as participating providers; providing for the transfer of deposits into the medical services fund of the taxes collected under the West Virginia health care provider tax act of 1993 and the taxes collected from providers of health care items or services under the severance and business privilege tax act of 1993; requiring the medical services fund to be used to make expenditures for personal services, employee benefits, current expenses, repairs and alterations and health care provider payments of the division of human services for the payment of medical services to recipients of specified classes of welfare assistance; revising the expansion of medicaid coverage to children; permitting licensure of behavioral health facilities developing services for child and adolescent medicaid recipients currently placed out-of-state; prohibiting out-of-state placement of children or
adolescents for mental and behavioral health services, if those services are available in-state; changing legislative findings; defining certain terms for purposes of certificate of need; imposing moratoriums on the approval of certificates of need for new home health, hospice, mental and behavioral health programs and sites, and on the implementation of services pursuant to an existing certificate of need; providing for certain exceptions to moratorium; authorizing the health care cost review authority to impose a moratorium on certificate of need applications when the applicable standards are obsolete or non-existent; authorizing the health care cost review authority to amend the certificate of need standards when necessary; requiring a notice and public comment period; requiring submission to and approval by the governor on any proposed amendments or modifications to those standards; and establishing minimum criteria for certificate of need reviews for personal care services.
Be it enacted by the Legislature of West Virginia:
That articles four-b and four-c, chapter nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; that section two, article one of said chapter be amended and reenacted; that section nine, article two of said chapter be amended and reenacted; that said article be further amended by adding thereto a new section, designated section nine- a; that section two, article four of said chapter be amended and reenacted; that section two-b, article four-a of said chapter be amended and reenacted; that section twenty-a, article thirteen-a, chapter eleven of said code be amended and reenacted; that sections one and three, article twenty-six of said chapter be amended and reenacted; that section thirty-two, article twenty- seven of said chapter be amended and reenacted; that sections two, three, five and six, article two-d, chapter sixteen of said code be amended and reenacted; and that said article be further amended by adding thereto a new section, designated section three-a, all to read as follows:
CHAPTER 9. HUMAN SERVICES.

ARTICLE 1. LEGISLATIVE PURPOSE AND DEFINITIONS.
§9-1-2. Definitions.

The following words and terms when used in this chapter shall have the meaning hereafter ascribed to them unless the context clearly indicates a different meaning, and any amendment of this section shall apply to any verdict, settlement, compromise or judgment entered after the effective date of the amendment.
(a) The term "department" means the state division of human services.
(b) The term "commissioner" means the commissioner of human services.
(c) The term "federal-state assistance" means and includes (1) all forms of aid, care, assistance and services to or on behalf of persons, which are authorized by, and who are authorized to receive the same under and by virtue of, subchapters one, four, five, ten, fourteen, sixteen, eighteen and nineteen, chapter seven, Title 42, United States Code, as those subchapters have heretofore been and may hereafter be amended, supplemented and revised by acts of Congress, and as those subchapters so amended, supplemented and revised have heretofore been and may hereafter be supplemented by valid rules and regulations promulgated by authorized federal agents and agencies, and as those subchapters so amended, supplemented and revised have heretofore been and may hereafter be supplemented by rules and regulations promulgated by the state division of human services, which division rules and regulations shall be consistent with federal laws, rules and regulations, but not inconsistent with state law, and (2) all forms of aid, care, assistance and services to persons, which are authorized by, and who are authorized to receive the same under and by virtue of, any act of Congress, other than the federal Social Security Act, as amended, for distribution through the state division of human services to recipients of any form of aid, care, assistance and services to persons designated or referred to in (1) of this definition and to recipients of state assistance, including by way of illustration, surplus food and food stamps, which Congress has authorized the secretary of agriculture of the United States to distribute to needy persons.
(d) The term "federal assistance" means and includes all forms of aid, care, assistance and services to or on behalf of persons, which are authorized by, and who are authorized to receive the same under and by virtue of, any act of Congress for distribution through the state division of human services, the cost of which is paid entirely out of federal appropriations.
(e) The term "state assistance" means and includes all forms of aid, care, assistance, services and general relief made possible solely out-of-state, county and private appropriations to or on behalf of indigent persons, which are authorized by, and who are authorized to receive the same under and by virtue of, state division of human services' rules and regulations.
(f) The term "welfare assistance" means the three classes of assistance administered by the state division of human services, namely: Federal-state assistance, federal assistance and state assistance.
(g) The term "indigent person" means any person who is domiciled in this state and who is actually in need as defined by department rules and regulations and has not sufficient income or other resources to provide for such need as determined by the state division of human services.
(h) The term "domiciled in this state" means being physically present in West Virginia accompanied by an intention to remain in West Virginia for an indefinite period of time, and to make West Virginia his or her permanent home. The state division of human services may by rules and regulations supplement the foregoing definition of the term "domiciled in this state," but not in such a manner as would be inconsistent with federal laws, rules, and regulations applicable to and governing federal-state assistance.
(i) The term "medical services" means medical, surgical, dental and nursing services, and other remedial services recognized by law, in the home, office, hospital, clinic and any other suitable place, provided or prescribed by persons permitted or authorized by law to give such services; such services to include drugs and medical supplies, appliances, laboratory, diagnostic and therapeutic services, nursing home and convalescent care and such other medical services and supplies as may be prescribed by such persons.
(j) The term "general relief" means cash or its equivalent in services or commodities expended for care and assistance to an indigent person other than for care in a county infirmary, child shelter or similar institution.
(k) The term "physician provider" means an allopathic or osteopathic physician, rendering services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(l) The term "nurse practitioner" means a registered nurse qualified by virtue of his or her education and credentials and approved by the West Virginia board of examiners for registered professional nurses to practice as an advanced practice nurse independently or in a collaborative relationship with a physician.
(m) The term "nurse-midwife" means a qualified professional nurse registered with the West Virginia board of examiners for registered professional nurses who by virtue of additional training is specifically qualified to practice nurse-midwifery according to the statement of standards for the practice of nurse-midwifery as set forth by the American college of nurse-midwives.
(n) The term "physician assistant" means an assistant to a physician who is a graduate of an approved program of instruction in primary health care or surgery, has attained a baccalaureate or master's degree, has passed the national certification examination and is qualified to perform direct patient care services under the supervision of a physician.
(o) The term "secretary" means the secretary of the department of health and human resources.
(p) The term "single state agency" means the single state agency for medicaid in this state.
(q) The term "ambulance service provider" means a person rendering ambulance services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(r) The term "general health care provider" means an audiologist, a behavioral health center, a chiropractor, a community care center, an independent laboratory, an independent X-ray service, an occupational therapist, an optician, an optometrist, a physical therapist, a podiatrist, a private duty nurse, a psychologist, a rehabilitative specialist, a respiratory therapist and a speech therapist rendering services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(s) The term "inpatient hospital services provider" means a provider of inpatient hospital services for purposes of Section 1903(w) of the Social Security Act.
(t) The term "intermediate care facility for the mentally retarded services provider" means a provider of intermediate care facility services for the mentally retarded for purposes of Section 1903(w) of the Social Security Act.
(u) The term "nursing facility services provider" means a provider of nursing facility services for purposes of Section 1903(w) of the Social Security Act.
(v) The term "outpatient hospital service provider" means a hospital providing preventative, diagnostic, therapeutic, rehabilitative or palliative services that are furnished to outpatients.
(w) The term "subrogation" means a statutory right of reimbursement in which the principles precedent for recovery at equity or common law do not apply, so that reimbursement is given first priority regardless of whether the injured party is made whole or whether other creditors are paid.
(x) The term "full reimbursement" means the department of health and human resources' right of recovery of all amounts of medical assistance paid by medicaid on behalf of the recipient regardless of whether the recipient is made whole.
(y) The term "estate" means all real and personal property and other assets included within the individual's estate as defined in this state's probate law.
(z) The term "services" means nursing facility services, home and community-based services, and related hospital and prescription drug services for which an individual received medicaid medical assistance.
(aa) The term "essential community provider means, facilities, entities or individual practitioners which provide a full range of primary/acute care services to the population of a medically underserved area or population. These providers are the infrastructure of care to the uninsured, underinsured, elderly and high risk populations and ensure access to preventive and acute care for these individuals. These entities include: county aging programs offering personal care services, primary care centers designated by the department of health and human resources, and small and rural hospitals.
ARTICLE 2. DEPARTMENT OF HEALTH AND HUMAN RESOURCES, AND OFFICE OF COMMISSIONER OF HUMAN SERVICES; POWERS, DUTIES AND RESPONSIBILITIES GENERALLY.

§9-2-9. Secretary to develop medicaid monitoring and case
management.

(a) On or before the first day of January, one thousand nine hundred ninety-four, the secretary of the department of health and human resources shall:
(1) Develop a managed care system to monitor the services provided by the medicaid program to individual clients;
(2) Develop an independent referral service, including the review of individual cases for abuses of the program; and
(3) Develop a schedule for implementation of the managed care and independent referral system. The managed care system shall focus on, but not be limited to, the behavioral health and mental health services.
(b) In addition thereto, and in accordance with applicable federal medicaid laws, the secretary shall prepare recommendations, to be submitted to the joint committee on government and finance on or before the first day of January, one thousand nine hundred ninety-four. In developing recommendations the secretary shall consider as options the following:
(1) Review of medicaid services which are optional under federal medicaid law and identification of services to be retained, reduced or eliminated;
(2) The elimination, reduction or phase-out of: (i) Services which are not generally available to West Virginia citizens not covered under the state's medicaid program; or (ii) services which are not generally covered under group policies of insurance made available to employees of employers within the state;
(3) The elimination or reduction of services, or reduction of provider reimbursement rates, for identified services of marginal utility;
(4) Higher reimbursement rates for primary and preventive care;
(5) Changes in fee structure, which may include a system of prospective payments, and may include establishment of global fees for identified services or diagnoses including maternity care;
(6) Utilization caps for certain health care procedures;
(7) Restriction of coverage for cosmetic procedures;
(8) Identification of excessive use of certain health care procedures by individuals and a policy to restrict excessive use;
(9) Identification of services which reduce the need for more costly options for necessary care and retention or expansion of those programs;
(10) Identification of services for which preauthorization should be requirement for medicaid reimbursement;
(11) Recommendations relating to the development of a demonstration project on long-term care, which demonstration project may be limited to patients with alzheimer's disease;
(12) A policy concerning the department's procedures for compliance, monitoring and inspection; and
(13) Such other options as may be developed. (c) Beginning in fiscal year one thousand nine hundred ninety-six, the secretary is directed to increase the number of individuals served in the aged and disabled waiver program to no less than five thousand. The secretary shall complete all federal requirements necessary to implement this section, including the submission of any amendment to the state medicaid plan, immediately following the effective date of this section. Additional moneys for the medicaid program may not be appropriated for this program and the secretary is directed to decrease or eliminate existing optional programs to the extent necessary to implement the provisions of this section.
(d) The secretary shall utilize in-state health care facilities for inpatient treatment when such facilities are available. Prior authorization, consistent with applicable federal law, shall be required for out-of-state inpatient treatment.
(e) The secretary shall report to the joint committee on government and finance on the development and implementation of medicaid programs that provide incentives to working persons. The secretary shall consider: Subsidies for low income working persons; individual or small employer buy-ins to the state medicaid fund; prospective payment systems for primary care physicians in undeserved areas; and a system to improve monitoring of collections, expenditures, service delivery and utilization.
(f) The secretary shall report quarterly to the joint committee on government and finance regarding provider and facility compliance with federal and state medicaid laws, including, but not limited to, the following: The number of inspections conducted during the previous quarter; description of programs, services and facilities reviewed; findings; and recommendations for corrections.
§9-2-9a. Authorization to execute contracts for professional
health care, managed care and actuarial services.

(a) The secretary is hereby given exclusive authorization to execute such contract or contracts as are necessary to implement professional health care, managed care, actuarial and independent referral systems for the medicaid program.
(b) The provisions of article three, chapter five-a of this code, relating to the division of purchasing of the department of administration, shall not apply to any contract or contracts for professional health care, managed care, actuarial and independent referral services for the medicaid program. Before entering into any contracts for any professional health care, managed care, actuarial and independent referral systems for the medicaid program, as herein authorized, the secretary shall invite competent sealed bids from all qualified providers of said services. A health care provider is hereby deemed a qualified provider of services for purposes of this section. The secretary shall develop specifications and receive proposals and quotations for bid purposes and may employ, without the requirement of bidding, a consultant for developing the specifications, and any consultant so employed shall be disqualified from subsequent bidding. Bids shall be obtained by public notice and by soliciting sealed bids by sending requests to prospective providers. The secretary shall award such contract or contracts on a competitive bid basis. In awarding the contract or contracts, the secretary shall take into consideration the experience of the offering provider. In awarding contracts to implement professional health care and managed care, the secretary may not exclude from participation any health provider licensed to provide health services directly to the public.
(c) The provisions of chapter thirty-three of this code, relating to the licensing and regulation of insurance companies, shall apply to any entity contracting with the secretary to serve as the department of health and human resources' managed care organization for the medicaid managed behavioral health care program. Health care providers shall not be excluded from the selection as a managed care organization.
(d) Any contract or contracts executed by the secretary for the provision of managed care for recipients in the medical assistance program of the Social Security Act shall contain a prohibition on marketing and recruiting techniques which involve an offer of gifts of value to the prospective managed care enrollee. Such offers shall be considered bribery and if it comes to the attention of the secretary that an officer, employee or agent of a health maintenance organization, managed care organization or other managed care entity may be violating the provisions of this subsection, the matter shall be referred to the medicaid fraud control unit for investigation and referral for prosecution pursuant to the provisions of article seven of this chapter.
(e) The secretary may at the end of any contract period discontinue any contract or contracts executed pursuant to this article.
(f) No essential community provider shall be denied the opportunity to become a participating provider in any medicaid physical health managed care plan. If an essential community provider requests the opportunity to become a participating provider in any medicaid managed care plan for physical health the secretary shall conduct reasonable and good faith negotiations with essential community providers. If the essential community provider meets the qualifications and standards established by the secretary then the secretary shall approve such provider as a participating provider: Provided, That any essential community provider shall meet indigent/charity care guidelines established by the department and submit audited financial reports to the secretary detailing their indigent/charity care load.
ARTICLE 4. STATE ADVISORY BOARD; MEDICAL SERVICES FUND; ADVISORY COUNCIL; GENERAL RELIEF FUND.

§9-4-2. Medical services fund.

The special fund known as the state of West Virginia public assistance medical services fund established by chapter one hundred forty-three, acts of the Legislature, regular session, one thousand nine hundred fifty-three, as amended by chapter two, acts of the Legislature, first extraordinary session, one thousand nine hundred sixty, and chapter forty-nine, acts of the Legislature, regular session, one thousand nine hundred sixty-six, shall be continued in accordance with the provisions of this section so long as the same may be required by federal laws, rules and regulations applicable to federal-state assistance and thereafter so long as the commissioner shall deem such fund to be otherwise necessary or desirable, and henceforth such special fund shall be known as the division of human services medical services fund, hereinafter referred to as the fund.
The fund shall consist of payments made into the fund out- of-state appropriations for medical services to recipients of specified classes of welfare assistance, taxes deposited under subsection (a), section twenty-a, article thirteen-a, chapter eleven of this code, commonly known as the Severance and Business Privilege Tax Act of 1993, and under section thirty-two, article twenty-seven of such chapter, commonly known as the West Virginia Health Care Provider Tax Act of 1993, and such federal grants-in-aid as are made available for specified classes of welfare assistance. Any balance in the fund at the end of any fiscal year shall remain in the fund and shall not expire or revert. Payments shall be made out of the fund upon requisition of the commissioner by means of a warrant signed by the auditor and treasurer.
Recipients of those classes of welfare assistance as are specified by the division of human services, consistent with applicable federal laws, rules and regulations, shall be entitled to have costs of necessary medical services paid out of the fund, in the manner and amounts, to the extent, and for the period determined from time to time to be feasible by the commissioner pursuant to rules, regulations and standards established by him. Such rules, regulations and standards shall comply with requirements of applicable federal laws, rules and regulations and shall be established on the basis of money available for the purpose, the number of recipients, the experience with respect to the incidence of illness, disease, accidents, and other causes among such recipients causing them to require medical services and the costs thereof, the amounts which recipients require otherwise in order to maintain a subsistence compatible with decency and health, and any other factor considered relevant and proper by the commissioner: Provided, That such rules and regulations respecting qualifications shall permit the expenditure of state funds to pay for care rendered in any birthing center licensed under the provisions of article two-e, chapter sixteen of this code, by a licensed nurse midwife or midwife as this occupation is defined in section one, article fifteen, chapter thirty of this code, and which care is within the scope of duties for such licensed nurse midwife or midwife as permitted by the provisions of section seven, article fifteen of said chapter thirty.
Expenditures of the types heretofore made by the division of human services to support the payment of medical services to recipients of specified classes of welfare assistance, including expenditures for personal services, employee benefits, current expense, repairs and alterations and health care provider payments, may be made from the fund. The identification of the general purpose and amount of all expenditures from the fund, to the extent permitted by federal law, shall be available for public inspection, and an annual report totaling such expenditures by type shall be available for such inspection. This section shall be effective from date of passage.
ARTICLE 4A. MEDICAID UNCOMPENSATED CARE FUND.
§9-4A-2b. Expansion of coverage to children and terminally ill.
(a) It is the intent of the Legislature that steps be taken to expand coverage to children and the terminally ill and to pay for this coverage by fully utilizing federal funds. To achieve this intention, the department of health and human resources shall undertake the following:
(1) Effective the first day of July, one thousand nine hundred ninety-four, the department shall initiate a streamlined application form, which shall be no longer than two pages, for all families applying only for medicaid coverage for children.
(2) Effective the first day of July, one thousand nine hundred ninety-four, the department shall initiate the option of hospice care to terminally ill West Virginians who otherwise qualify for medicaid. On or before the first day of January, one thousand nine hundred ninety-five, and periodically thereafter, the department shall report to the legislative task force on uncompensated health care and medicaid expenditures created pursuant to section four, article twenty-nine-c, chapter sixteen of this code regarding the program initiation provided for in this subdivision. The report shall include, but not be limited to, the total number, by age, of newly eligible clients served as a result of the initiation of the program pursuant to this subdivision, the average annual cost of coverage per client, and the total cost, by provider type, to serve all clients.
(3) Effective the first day of July, one thousand nine hundred ninety-four, the department shall accelerate the medicaid option for coverage of medicaid to all West Virginia children whose family income is below one hundred percent of the federal poverty level. On or before the first day of January, one thousand nine hundred ninety-five, and periodically thereafter, the department shall report to the legislative task force on uncompensated health care and medicaid expenditures regarding the program acceleration provided for in this subdivision. The report shall include, but not be limited to, the number of newly eligible clients, by age, served as a result of the acceleration, the average annual cost of coverage per client and the total cost of all clients served by provider type.
(4) Effective the first day of July, one thousand nine hundred ninety-six, the department may initiate the medicaid option to expand coverage of medicaid to all West Virginia children whose family income is below one hundred thirty-three percent of the federal poverty level. Prior to any such program expansion, but no earlier than the first day of January, one thousand nine hundred ninety-six, the department shall submit a report to the governor and the Legislature regarding the feasibility of the expansion. The report is to include, but not be limited to, the number of newly eligible clients participating in the programs specified in this section, the average annual cost of coverage per client, the percentage of expected participation for the expansion, the projected cost of the expansion, the medical services trust fund balance and the future disproportionate share moneys expected to be deposited in the medical services trust fund pursuant to section two-a of this article. The department shall continually update the additional information required to be provided to the governor and the Legislature regarding this expansion and periodically report the information to the legislative task force on uncompensated health care and medicaid expenditures created pursuant to section four, article twenty-nine-c, chapter sixteen of this code.
(5) Effective the first day of July, one thousand nine hundred ninety-seven, the department may initiate the medicaid option to expand coverage of medicaid to all West Virginia children whose family income is below one hundred fifty percent of the federal poverty level. Prior to any such program expansion, but no earlier than the first day of January, one thousand nine hundred ninety-seven, the department shall submit a report to the governor and the Legislature, regarding the feasibility of the expansion. Additionally, the report is to include, but not be limited to, the number of clients who would be newly eligible to participate in the program, the average annual cost of coverage per client, by age, the percentage of expected participation for the expansion and the projected cost of the expansion, the balance of the medical services trust fund and the future disproportionate share moneys expected to be deposited in the medical services trust fund pursuant to section two-a of this article. The department shall periodically update and report to the legislative task force on uncompensated health care and medicaid expenditures created pursuant to section four, article twenty-nine-c, chapter sixteen of this code regarding the additional information required to be submitted to the governor and the Legislature.
(6) The provisions of this section shall not be construed as requiring the department to expand medicaid coverage to children after the first day of July, one thousand nine hundred ninety-four.
(b) Notwithstanding the provisions of section two-a of this article, the accruing interest in the medical services trust fund may be utilized to pay for the programs specified in subsection (a) of this section: Provided, That to the extent the accrued interest is not sufficient to fully fund the specified programs, the disproportionate share hospital funds paid into the medical services trust fund after the thirtieth day of June, one thousand nine hundred ninety-four, may be applied to cover the cost of the specified programs: Provided, however, That in fiscal year one thousand nine hundred ninety-five, the amount of funds applied from the disproportionate share funds, not including accrued interest, shall not exceed ten million dollars: Provided further, That in the interest of fiscal responsibility, the department shall terminate the program specified in subdivisions (4) and (5) of subsection (a) of this section, if the future moneys deposited from disproportionate share payments in the medical services trust fund are insufficient to cover the cost of the expanded program.
(c) On the first day of January, one thousand nine hundred ninety-five and annually thereafter, the department shall report to the governor and to the Legislature information regarding the number of children and elderly covered by the program, the cost of services by type of service provided, a cost-benefit analysis of the acceleration and expansion on other insurers and the reduction of uncompensated care in hospitals as a result of the programs.
(d) The health care cost review authority established by section five, article twenty-nine-b of this chapter shall consider in its rate review that uncompensated care and charity care are reduced by the programs specified in subsection (a) of this section and shall take the reduction into account when determining rates. This determination shall be undertaken in each hospital's next rate review and shall be determined prospectively.
(e) On the first day of January, one thousand nine hundred ninety-five, and annually thereafter, the health care cost review authority shall present to the governor and to the Legislature a report concerning the reduction in cost shift created by the operation of the provisions of this article.
(f) The department shall review the additional utilization by behavioral health centers as a result of the acceleration and expansion for a period of eighteen months from the enactment of this article: Provided, That during the eighteen-month study period the department shall not issue additional behavioral health licenses: Provided, however, That this license provision does not apply to facilities filing for renewal applications or to any health care facility which has a certificate of need in effect or an application pending on the first day of March, one thousand nine hundred ninety-four: Provided further, That this licensure prohibition shall not apply to behavioral health services provided pursuant to any agreement for state owned psychiatric hospitals which are approved by the federal health care finance administration: And Provided further, That this licensure prohibition shall not apply to facilities developing mental and behavioral health services not readily available in the state and which West Virginia child and adolescent medicaid recipients are receiving out-of-state.
(g) By the first day of June, one thousand nine hundred ninety-five, the department shall not place children and adolescents who are medicaid recipients and in need of mental or behavioral health services in facilities located outside the state: Provided, That such facilities or services are readily available in the state.
CHAPTER 11. TAXATION.

ARTICLE 13A. SEVERANCE TAXES.
§11-13A-20a. Dedication of tax.
(a) The amount of taxes collected under this article from providers of health care items or services, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be deposited into the division of human services medical services fund created in section two, article four, chapter nine of this code. Any funds remaining on the last day of June, one thousand nine hundred ninety-five, in the special revenue fund created in the state treasurer's office and known as the medicaid state share fund shall be transferred to the division of human services medical services fund, and any subsequent deposits in the medicaid state share fund shall also be so transferred. Said fund shall have separate accounting for those health care providers defined in section two, article one, chapter nine of this code.
(b) Notwithstanding the provisions of subsection (a) of this section, for the remainder of fiscal year one thousand nine hundred ninety-three and for each succeeding fiscal year, no expenditures from taxes collected from providers of health care items or services are authorized except in accordance with appropriations by the Legislature.
(c) The amount of taxes on the privilege of severing timber collected under section three-b of this article, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be paid into a special revenue account in the state treasury to be appropriated by the Legislature for purposes of the division of forestry.
(d) The amount of taxes collected under this article from all other persons, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be deposited into the general revenue fund.
ARTICLE 26. HEALTH CARE PROVIDER MEDICAID TAX.
§11-26-1. Legislative findings.
The Legislature finds and declares that:
(a) Medicaid provides access to basic medical care for our citizens who are not physically, mentally or economically able to provide for their own care;
(b) Inadequate compensation for health care providers rendering medicaid services is a barrier to indigent persons seeking access to health care services;
(c) Health care providers in this state are providing care, without compensation, to many citizens who are not medicaid eligible;
(d) Many health care providers are leaving this state due to economic conditions;
(e) Without adequate compensation this state cannot attract or retain a sufficient number of health care providers necessary to serve our indigent population;
(f) Without additional medicaid funding this state cannot adequately compensate health care providers for the health care services rendered to indigent patients;
(g) The Tenth Amendment of the United States Constitution guarantees to the states the power to tax;
(h) The Congress of the United States has enacted Section 4701 of the Omnibus Budget Reconciliation Act of 1990, P.L. 101-508, amending Section 1902 of the Social Security Act and authorizing state medicaid agencies to attribute taxes imposed on medicaid providers as part of the state share;
(i) Moneys generated in accordance with this article are supplementary only and shall not be used to reduce the general financial obligations of the state's medical assistance program as appropriated by the Legislature; and
(j) These funds shall not be used for any purpose other than those purposes stated in this article.
§11-26-3. Definitions.
The following words when used in this article have the meaning ascribed to them in this section, except in those instances where a different meaning is distinctly expressed or the context in which the word is used clearly indicates a different meaning is intended:
(a) "Cost-based service" means any service delivered by a health care provider reimbursed under the medical assistance program of this state solely on the basis of costs reported to the single state agency, whether or not the provider is operating on a profit or not-for-profit basis.
(b) "Department" means the West Virginia department of health and human resources. The term "secretary" means the secretary of the West Virginia department of health and human resources, or his or her designee.
(c) "Gross receipts" or "gross proceeds" means all payments received by a health care provider enrolled in this state's medical assistance program for services delivered pursuant to Title XIX of the United States Social Security Act, as amended, and means any and all medicaid reimbursement payments made by the West Virginia department of health and human resources, or a division thereof, within the limitations set forth in this subsection, to such health care provider: Provided, That this definition does not include payments received for medicare coinsurance and deductibles as defined in Title XVIII of the Social Security Act, and does not include reimbursements made for cost-based services.
(d) "Health care provider" or "provider" includes physician providers, ambulance service providers, dentist providers, general health care providers, and outpatient hospital service providers as defined in section two, article one, chapter nine of this code, and any other person directly receiving enhanced medicaid reimbursement payments.
(e) "Single state agency" means the single state agency for medicaid in this state.
(f) "Taxpayer" means a health care provider required to pay the medicaid enhancement tax imposed by this article.
ARTICLE 27. HEALTH CARE PROVIDER TAXES.
§11-27-32. Dedication of tax.
(a) The amount of taxes collected under this article, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds, the amount of any interest payable with respect to such refunds, and costs of administration and collection, shall be deposited into the division of human services medical services fund named in section two, article four, chapter nine of this code. Any funds remaining on the last day of June, one thousand nine hundred ninety-five, in the special revenue fund created in the state treasurer's office and known as the medicaid state share fund shall be transferred to the division of human services medical services fund, and any subsequent deposits in the medicaid state share fund shall also be so transferred. The tax commissioner shall have separate accounting for those health care providers defined in section two, article one, chapter nine of this code, except that taxes paid by hospitals may be combined and reported as a single item. The tax commissioner shall retain from the taxes collected during each fiscal year the amount of two hundred thousand dollars to be used for administration and collection of these taxes.
(b) Notwithstanding the provisions of subsection (a) of this section, for the remainder of fiscal year one thousand nine hundred ninety-three and for each succeeding fiscal year, no expenditures from any of the several health care provider funds are authorized except in accordance with appropriations by the Legislature.
CHAPTER 16. PUBLIC HEALTH.

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 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 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 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 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 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) "Expenditure minimum" means seven hundred fifty thousand dollars per fiscal year.
(h) "Health," used as a term, includes physical and mental health.
(i) "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) "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) "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) "Health services" means clinically related preventive, diagnostic, treatment or rehabilitative services, including alcohol, drug abuse and mental health services.
(m) "Home health agency" is an organization primarily engaged in providing directly or through contract arrangements, professional nursing services, home health aide services, and other therapeutic and related services, including, but not limited to, physical, speech and occupational therapy and nutritional and medical social services to persons in their place of residence on a part-time or intermittent basis.
(n) "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 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. Hospice agencies do not include home health or home care service agencies.
(o) "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) "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) "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) "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) "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) "New institutional health service" means such service as described in section three of this article.
(u) "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) "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) "Personal care services" means medically oriented activities or tasks ordered by a physician and which is implemented according to a nursing plan of care which has been completed by, and which is supervised by, a registered nurse and billed to the state. These services include those activities which are intended to enable persons to meet their physical needs and to be treated by a physician in their place of residence. The term shall include, but not be limited to, services related to personal hygiene, dressing, feeding, nutrition, environmental support functions and health related tasks.
(x) "Physician" means a doctor of medicine or osteopathy legally authorized to practice by the state.
(y) "Proposed new institutional health service" means such service as described in section three of this article.
(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.
(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.
(bb) "Review agency" means an agency of the state, designated by the governor as the agency for the review of state agency decisions.
(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.
(dd) "State agency" means the health care cost review authority created, established, and continued pursuant to article twenty-nine-b of this chapter.
(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.
(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.
(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.
(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.
(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.
§16-2D-3. Certificate of need; new institutional health services defined.

(a) Except as provided in section four of this article, any new institutional health service may not be acquired, offered or developed within this state except upon application for and receipt of a certificate of need as provided by this article. Any new personal care service offered by any person, facility, corporation or entity, other than an agency of the state, may not be offered or developed in this state, if the service is to be funded in whole, or in part, by state or federal medicaid funds, except upon application for and receipt of a certificate of need as provided in section six of this article. Whenever a new institutional health service for which a certificate of need is required by this article is proposed for a health care facility for which, pursuant to section four of this article, no certificate of need is or was required, a certificate of need shall be issued before the new institutional health service is offered or developed. No person may knowingly charge or bill for any health services associated with any new institutional health service that is knowingly acquired, offered or developed in violation of this article, and any bill made in violation of this section is legally unenforceable.
(b) For purposes of this article, a proposed "new institutional health service" includes:
(1) The construction, development, acquisition or other establishment of a new health care facility or health maintenance organization;
(2) The partial or total closure of a health care facility or health maintenance organization with which a capital expenditure is associated;
(3) Any obligation for a capital expenditure incurred by or on behalf of a health care facility, except as exempted in section four of this article, or health maintenance organization in excess of the expenditure minimum or any obligation for a capital expenditure incurred by any person to acquire a health care facility. An obligation for a capital expenditure is considered to be incurred by or on behalf of a health care facility:
(A) When a contract, enforceable under state law, is entered into by or on behalf of the health care facility for the construction, acquisition, lease or financing of a capital asset;
(B) When the governing board of the health care facility takes formal action to commit its own funds for a construction project undertaken by the health care facility as its own contractor; or
(C) In the case of donated property, on the date on which the gift is completed under state law;
(4) A substantial change to the bed capacity of a health care facility with which a capital expenditure is associated;
(5) The addition of health services which are offered by or on behalf of a health care facility or health maintenance organization and which were not offered on a regular basis by or on behalf of the health care facility or health maintenance organization within the twelve-month period prior to the time the services would be offered;
(6) The addition of ventilator services for any nursing facility bed by any health care facility or health maintenance organization;
(7) The deletion of one or more health services, previously offered on a regular basis by or on behalf of a health care facility or health maintenance organization which is associated with a capital expenditure;
(8) A substantial change to the bed capacity or health services offered by or on behalf of a health care facility, whether or not the change is associated with a proposed capital expenditure, if the change is associated with a previous capital expenditure for which a certificate of need was issued and if the change will occur within two years after the date the activity which was associated with the previously approved capital expenditure was undertaken;
(9) The acquisition of major medical equipment;
(10) A substantial change in an approved new institutional health service for which a certificate of need is in effect. For purposes of this subsection, "substantial change" shall be defined by the state agency in regulations adopted pursuant to section eight of this article; or
(11) An expansion of the service area of any hospice agency or home health service, regardless of the time period in which the expansion is contemplated or made.
§
16-2D-3a. Moratoriums on letters of intent and applications for

certificates of need for home health, hospice, group residential facilities and mental and behavioral health facilities.

(a) There shall be a moratorium on the filing of letters of intent and applications for all certificates of need for new services within agencies and facilities which provide or propose to provide home health services, as defined in section two of this article, and upon new sites by any facility, agency or service which offers or seeks to offer such services. This moratorium shall end on the first day of August, one thousand nine hundred ninety-six. No agency, facility or service shall tender a letter of intent or application for a certificate of need for such services prior to that date.
(b) There shall be a moratorium on the filing of letters of intent and applications for all certificates of need for new services within those agencies or facilities which provide or propose to provide hospices and bereavement services, as described in article five-i of this chapter, and upon new sites by any facility, agency or service which offers or seeks to offer such services. This moratorium shall end on the first day of August, one thousand nine hundred ninety-six. No agency, facility or service shall tender a letter of intent or application for a certificate of need for such services prior to that date.
(c) There shall be a moratorium on the filing of letters of intent and applications for all certificates of need for new services within those agencies or facilities which provide or propose to provide group residential facility services, mental and behavioral health services, and any other services governed by chapter twenty-seven of this code, as amended, and upon new sites by any facility, agency or service which offers or seeks to offer such services, except that this moratorium shall not apply to agencies or facilities which seek a certificate of need: For the sole purpose of creating placements, services, programs or sites for individuals who were residents of the Colin Anderson Center on or after the first day of January, one thousand nine hundred ninety-five, or for individuals displaced by residents of Colin Anderson Center moving into community-based settings; for the purpose of creating placements, services, programs or sites necessary to prevent individuals from being institutionalized; or for the purpose of creating placements, services, programs or sites for specialized foster care; or for the development of mental or behavioral health services, programs or facilities which are not readily available in the state and which West Virginia child and adolescent medicaid recipients are receiving out-of-state. This moratorium shall end on the first day of August, one thousand nine hundred ninety-six or upon the date of implementation of a medicaid managed behavioral health plan, whichever occurs first. No agency, facility or service subject to this moratorium shall tender a letter of intent or pursue application for a certificate of need for such services prior to that date unless the stated purpose: Is to provide placements, services, programs or sites for individuals who were residents of the Colin Anderson Center on or after the first day of January, one thousand nine hundred ninety-five, or for individuals displaced by residents of Colin Anderson Center moving into community-based settings; is to create placements, services, programs or sites necessary to prevent individuals from being institutionalized; or is to create placements, services, programs or sites for specialized foster care; or is to develop mental or behavioral health services, programs or facilities which are not readily available in the state and which West Virginia child and adolescent medicaid recipients are receiving out-of-state.
(d) No extensions beyond the twelve month period from certificate of need approval shall be granted for those facilities, agencies and services described in subsections (a), (b) and (c) of this section. This subsection shall apply only to those certificates approved after the twenty-ninth day of January, one thousand nine hundred ninety-five and prior to the effective date of this section.
(e) A substantial change of a pending or approved certificate of need for those services described in subsections (a), (b) and (c) shall be subject to the moratorium imposed by this section.
§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 cooperate with the health care planning commission in developing rules and regulations for the certificate of need program to the extent appropriate for the achievement of efficiency in their reviews and consistency in criteria for such reviews.
(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. 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.
§16-2D-6. Minimum criteria for certificate of need reviews.

(a) Except as provided in subsections (f) and (g), 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 in the case of a health maintenance organization or an ambulatory care facility or health care facility controlled, directly or indirectly, by a health maintenance organization or combination of health maintenance organizations, the criteria considered shall be only those set forth in subdivision (12) of this subsection: Provided, however, That the criteria set forth in subsection (f) of this section applies to all hospitals, nursing homes and health care facilities when ventilator services are to be provided for any nursing facility bed:
(1) The recommendation of the designated health systems agency for the health service area in which the proposed new institutional health service is to be located;
(2) The relationship of the health services being reviewed to the state health plan and to the applicable health systems plan and annual implementation plan adopted by the designated health systems agency for the health service area in which the proposed new institutional health service is to be located;
(3) The relationship of services reviewed to the long-range development plan of the person providing or proposing the services;
(4) 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;
(5) The availability of less costly or more effective alternative methods of providing the services to be offered, expanded, reduced, relocated or eliminated;
(6) 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;
(7) The relationship of the services proposed to the existing health care system of the area in which the services are proposed to be provided;
(8) 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, applicable health systems plan and annual implementation plan;
(9) The appropriate and nondiscriminatory utilization of existing and available health care providers;
(10) The relationship, including the organizational relationship, of the health services proposed to be provided to ancillary or support services;
(11) 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;
(12) To the extent not precluded by subdivision (1), subsection (f), section nine of this article, the special needs and circumstances of health maintenance organizations. These needs and circumstances are limited to:
(A) The needs of enrolled members and reasonably anticipated new members of the health maintenance organization for the health services proposed to be provided by the organization; and
(B) The availability of the new health services from nonhealth maintenance organization providers or other health maintenance organizations in a reasonable and cost-effective manner which is consistent with the basic method of operation of the health maintenance organization. In assessing the availability of these health services from these providers, the agency shall consider only whether the services from these providers:
(i) Would be available under a contract of at least five years' duration;
(ii) Would be available and conveniently accessible through physicians and other health professionals associated with the health maintenance organization;
(iii) Would cost no more than if the services were provided by the health maintenance organization; and
(iv) Would be available in a manner which is administratively feasible to the health maintenance organization;
(13) The special needs and circumstances of biomedical and behavioral research projects which are designed to meet a national need and for which local conditions offer special advantages;
(14) 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;
(15) 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;
(16) 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;
(17) 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;
(18) 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;
(19) In accordance with section five of this article, the factors influencing the effect of competition on the supply of the health services being reviewed;
(20) 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;
(21) 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;
(22) In the case of existing services or facilities, the quality of care provided by the services or facilities in the past;
(23) 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;
(24) The special circumstances of health care facilities with respect to the need for conserving energy;
(25) 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, applicable health systems plan and annual implementation 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;
(26) 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 regulations 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 or not contained in regulations adopted pursuant to section eight 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. The state agency will also consider the total fiscal liability to the state for all applications which have been submitted.
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