Recommended Changes to the Commonwealth’s COPN Laws Submitted to the HWI Special Subcommittee on COPN October 18, 2018

House Bill 193 (2016) (O’Bannon) – As Introduced. Three-phase sunset of COPN for (i) the establishment of a new imaging service or addition of new equipment for imaging services, eliminated beginning July 1, 2019; (ii) ambulatory and outpatient surgery centers, eliminated beginning July 1, 2020; and (iii) hospitals and all other categories of projects other than nursing homes and facilities and equipment for open heart surgery and organ or tissue transplant services, eliminated beginning July 1, 2021. New permitting process for categories of facilities and projects exempted from the certificate of public need. Commissioner may condition issuance of a permit on (i) agreement of the applicant to provide a specified level of care at a reduced rate to indigents, accept patients requiring specialized care, or facilitate the development and operation of primary medical care services in designated medically underserved areas of the applicant's service area or (ii) compliance of the applicant with quality of care standards. Commissioner may refuse to issue a permit if he determines that the project for which the permit is sought would be detrimental to the provision of health services in underserved areas of the Commonwealth.

House Bill 193 (2016) (O’Bannon) - As introduced with additional amendments Proposed amendments to HB 193 (2016) (O’Bannon), as introduced: Add to the criteria the Commissioner must consider in determining whether a public need for a project exists the extent to which a proposed project would foster competition by providing an alternative to institutionally owned services or facilities that would benefit the area to be served while improving access to essential health care services for all persons in the area to be served; and Add to conditions the Commissioner must impose on the issuance of a permit to undertake a project for which a permit, rather than a certificate, is required the provision of services to a certain number of Medicaid and Medicare beneficiaries.

HB 193 (2016) ( O’Bannon) – Committee Substitute Two-phase sunset of COPN requirements for (i) ambulatory and outpatient surgery centers other than rural ambulatory and outpatient surgery centers and for capital expenditures at medical care facilities other than rural medical care facilities, eliminated effective July 1, 2019, and (ii) all medical care facilities other than nursing homes, rehabilitation hospitals and beds, organ or tissue transplant services, certain open heart surgery services, and rural medical care facilities, eliminated effective January 1, 2020. Creates a new permitting process for categories of facilities and projects exempted from the certificate of public need process. Requires the Commissioner of Health to issue a permit but requires the Commissioner to condition a permit on (i) the agreement of the applicant to provide a specified level of care at a reduced rate to indigents, accept patients requiring specialized care, or facilitate the development and operation of primary medical care services in designated medically underserved areas of the applicant's service area and (ii) compliance of the applicant with quality of care standards. Eliminates regional health planning agencies. Makes numerous changes to the COPN process for facilities and projects that will still be subject to the requirement of a certificate.

HB 1420 (2017) (Farrell) Repeals the requirement for a certificate of public need for certain projects involving mental hospitals or psychiatric hospitals and intermediate care facilities established primarily for the medical, psychiatric, or psychological treatment and rehabilitation of individuals with substance abuse. Creates a new permitting process for such projects, exempted from the certificate of public need process, that requires the Commissioner of Health to issue a permit upon the agreement of the applicant to certain charity care conditions and quality of care standards.

HB 918 (2018) (Landes) Exempts projects converting into an outpatient or ambulatory surgical center (i) that portion of a physician's office developed for the provision of outpatient or ambulatory surgery for which the applicant has a certificate of public need or (ii) a surgical suite within a physician's office that does not require a certificate of public need and that has been operating for at least two continuous years. Creates a new permitting process for such projects Requires the Commissioner of Health to issue a permit upon the agreement of the applicant to certain charity care conditions and quality of care standards.

HB 1102 (2018 ) (Stolle) with additional amendments The original bill (i) removes from the list of reviewable medical care facilities specialized centers or clinics or that portion of a physician's office developed for the provision of lithotripsy, magnetic source imaging (MSI), or nuclear medicine imaging; (ii) provides that establishment of a medical care facility to replace an existing medical care facility with the same primary service area does not constitute a project; (iii) removes from the definition of “project” the introduction into an existing medical care facility of any new lithotripsy, magnetic source imaging, or obstetrical service that the facility has never provided or has not provided in the previous 12 months and addition by an existing medical care facility of any medical equipment for the provision of lithotripsy and magnetic source imaging (MSI); (iv) creates a new process for registration of projects exempted from the definition of “project” by the bill; (v) establishes an expedited 45-day review process for applicants for projects determined to be uncontested or to present limited health planning impacts; (vi) renames the State Medical Facilities Plan as the State Health Services Plan and establishes a State Health Services Plan Advisory Council to provide recommendations related to the content of the State Health Services Plan; (vii) clarifies the content of the application for a certificate; and (viii) reduces the timeline for a person to be made party to the case for good cause from 80 calendar days to four days following completion of the review and submission of recommendations related to an application. The original bill also (a) directs the Department to develop recommendations to reduce the duration of the average review cycle for applications for certificates of public need to not more than 120 days and to report on its recommendations to the Governor and the General Assembly no later than December 1, 2018; (b) directs the Secretary of Health and Human Resources to review charity care services delivered throughout the Commonwealth and recommend changes to the definition of charity and to the types of charity care requirements imposed on various health care services and report to the Governor and the General Assembly by December 1, 2018; (c) directs the Secretary of Health and Human Resources to convene a group of stakeholders to study and make recommendations related to the appropriate authority of the State Health Commissioner to impose additional conditions on certificates; (d) directs the Secretary of Health and Human Resources to implement a system to ensure that data needed to evaluate whether an application for a certificate is consistent with the State Health Services Plan is timely and reliable, to make all public records pertaining to applications for certificates and the review process available in real-time in a searchable, digital format online, to make an inventory of capacity authorized by certificates of public need, both operational and not yet operational, available in a digital format online, and to make charity care conditions, charity care compliance reporting status, and details on the exact amount of charity care provided or contributed and to whom it was provided or contributed available in a digital format online; (e) directs the Commissioner of Health to develop an analytical framework to guide the work of the State Health Services Plan Advisory Council; and (f) directs the Joint Commission on Health Care to develop specific recommendations for eliminating differences in the certificate of public need review process from one region to another and report on the recommendations to the Chairmen of the House Committee on Health, Welfare and Institutions and the Senate Committee on Education and Health by December 1, 2018.

HB 1102 (2018 ) (Stolle) with additional amendments, cont. Proposed amendments: Incorporate payment of funds into the Health Care Coverage Assessment Fund as a means of satisfying charity care requirements; Replace the registration process with a new permit process; Update timelines and dates; Add a new section enjoining a project undertaken without a certificate or permit; and Add a new section related to additional enforcement authority.

HB 1402 (2018) (Leftwich) Adds to the list of medical care facilities for which a certificate of public need is required any facility that has common ownership with an affiliated licensed hospital located within 35 miles of the facility and that includes, as part of the facility, a dedicated emergency department as defined in 42 C.F.R. § 489.24(b) that is subject to the requirements of the federal Emergency Medical Treatment and Labor Act.

Amend COPN statutes to: Exempt the following from the requirement to obtain a certificate: (i) addition of operating rooms at existing hospitals, (ii) addition of beds at existing general or psychiatric hospitals, and (iii) conversion of non-psychiatric beds to beds in which inpatient psychiatric services are provided; Require registration of (i) addition of operating rooms at existing hospitals, (ii) addition of beds at existing general or psychiatric hospitals, and (iii) conversion of non-psychiatric beds to beds in which inpatient psychiatric services are provided; Add charity care requirements for (i) addition of operating rooms at existing hospitals and (ii) addition of beds at existing general or psychiatric hospitals, for which a certificate is not required but for which registration is required; Eliminate the role of regional health planning agencies; and Exempt the introduction of certain new neonatal special care services and certain new open heart surgery services from the requirement of obtaining a certificate.

Amend COPN statutes to: Provide for greater consumer perspective in the COPN approval process by including the Secretary of Commerce and Trade and the Commissioner of Insurance in the decision-making process and granting the Secretary and Commissioner equal authority with regard to decisions about whether to grant a certificate; and Require an independent economic analysis of the proposed project as part of each application for a certificate. Such analysis should include (i) evidence of how the proposed project would lower the cost of health care for individuals and make health care services more accessible to patients and (ii) data on the savings to Medicaid and Medicare resulting from approval of the project.

Amend COPN statutes to: Allow independent physician practices to offer imaging services or to operate ambulatory surgery centers without a certificate if at least 51 percent of the practice is owned by a physician; and Eliminate the requirement for a certificate for operating rooms solely for services lines for which the average number of procedures performed in hospitals in the state during the previous three years was 0.09 percent or less than the total number of surgeries performed.

Amend COPN statutes to: Add language to the section governing criteria for determining public need, making clear that the Commissioner should consider the utilization and efficiency of existing facilities or services used by individuals who reside within the service area and those who reside outside the service area who use the service or facility; and Add language providing that in cases in which a hearing on an application for a certificate is conducted, the applicant may elect to have a hearing officer appointed in accordance with the Administrative Process Act.

Amend COPN statutes to: Completely eliminate the COPN program and requirements.