The Certificate of Public Need Program in Virginia Denial of COPN Applications Case Study Presentation to COPN Workgroup Erik Bodin, Director VDH Office of Licensure and Certification September 28, 2015

The Certificate of Public Need Program in Virginia FY 2000 – FY ,168 Decisions 1,021 Approved 147 Denied 15 year average 12.6% denied 15 year median 10.9% denied Range 5.3% % denied annually

Case Study that involved denial of a COPN Request from within the last four years

2011 COPN Activity

Request to Add a CT Scanner COPN Request No. VA-7846 Inova Health Services d/b/a Inova Mount Vernon Hospital Expand CT Service through the Placement of a CT Scanner at Inova Lorton HealthPlex

Request to Add a CT Scanner Planning District 8 50 operational CT scanners at 32 different sites 27 CTs in 10 hospitals 23 CTs in 22 outpatient centers CT utilization: 106%, increasing 5.4%/yr Hospital: 143%, increasing 5.43%/yr Outpatient center: 62%, increasing 5.5%/yr Population: increasing 1.8%/yr

1. The extent to which the proposed service or facility will provide or increase access to needed services for residents of the area to be served, and the effects that the proposed service or facility will have on access to needed services in areas having distinct and unique geographic, socioeconomic, cultural, transportation, and other barriers to access to care. Based on the number and distribution of CT scanners in the PD, there are no identified issues with geographic access. Many existing CT imaging providers have conditioned COPNs. More than half the CT scanners in the PD are in acute care hospitals with charity obligations.

2. The extent to which the project will meet the needs of the residents of the area to be served, as demonstrated by each of the following: Ample support and opposition voiced for the project Alternatives exist for the project The Regional Health Planning Agency recommended approval of the project Cost / benefit was neutral PD poverty rate is lower than the Virginia average and the applicant has a history and/or commitment to provide charity care

3. The extent to which the application is consistent with the State Medical Facilities Plan. 100% of the population of the PD is already within a 30 minute drive of CT imaging services The average utilization of existing CT scanners in the PD is 7,829 per scanner per year, 105.8% of the standard CT utilization at Inova Mount Vernon Hospital was 92% The proposed site is within 30 minute drive of 2 other Inova facilities with underutilized CTs

4. The extent to which the proposed service or facility fosters institutional competition that benefits the area to be served while improving access to essential health care services for all persons in the area to be served. Based on the number and distribution of CT scanners in PD 8 there already exists ample competition

5. The relationship of the project to the existing health care system of the area to be served, including the utilization and efficiency of existing services or facilities. The project is associated with an existing system that operates 41% of the CTs in the PD CT capacity in the PD would increase by 1 More than half of the CTs in freestanding center are underutilized, 7 are operating at less than 30% of the SMFP standard

6. The feasibility of the project, including the financial benefits of the project to the applicant, the cost of construction, the availability of financial and human resources, and the cost of capital. The pro forma budget presented demonstrated profitability The project is being funded through internal resources, reducing the cost of capital

7. The extent to which the project provides improvements or innovations in the financing and delivery of health services, as demonstrated by: Newer equipment is more efficient Presence of a CT scanner in the ED does improve care delivery The project is for an outpatient service Locations would be more convenient yet retain access to larger systems

8. In the case of a project proposed by or affecting a teaching hospital associated with a public institution of higher education or a medical school in the area to be served. The applicant does not intend to affiliate this project with any clinical training programs

Request to Add a CT Scanner HSANV Recommendations HSANV recommends Approval The project appears consistent with sound regional and community service planning and development, as well as with applicable COPN planning guidelines and standards. An onsite CT scanner is needed to support the emergency care service being developed in Lorton. The project will likely improve emergency and related services to residents of the Route 1 corridor in Fairfax County. There is no indication, or reason to believe, that developing a CT scanning service in Lorton would have appreciable negative effects on other imaging services. Projected capital costs are reasonable for the size and nature of the project.

Request to Add a CT Scanner DCOPN Recommendations DCOPN recommends Denial The addition of a third CT scanner the Hospital is generally inconsistent with SMFP’s criteria, as well as the 8 Required Considerations. The proposed CT service would only minimally improve the distribution of CT services within PD 8. The Hospital’s existing CT service does not qualify for expansion as it is not performing an average of 7,400 procedures per CT scanner. Based on the increased performance capacity of modern CTs, there is the potential to increase the Inova’s CT presence in the PD and thereby negatively impact existing providers of CT services. There is underutilized CT capability within the Inova Health System that could accommodate Inova’s high CT utilization through relocation of existing underutilized CT.

Request to Add a CT Scanner Adjudication Recommendations ALJ recommends Denial The project is inconsistent with the SMFP. While the average CT utilization exceeds the SMFP standard, the functional capacity of new CTs exceeds the 2009 SMFP standard. Approval of the project would likely exert an influence at odds with the statutory consideration that calls for an assessment, in the review of a project, of a project’s ability to foster institutional competition. Adequate capacity for providing CT services in PD 8 is currently distributed such that geographical accessibility to these services exists.

Request to Add a CT Scanner Commissioner’s Decision Commissioner Denied The project is inconsistent with the SMFP. While the average CT utilization exceeds the SMFP standard, the functional capacity of new CTs exceeds the 2009 SMFP standard. Approval of the project would likely exert an influence at odds with the statutory consideration that calls for an assessment, in the review of a project, of a project’s ability to foster institutional competition. Adequate capacity for providing CT services in PD 8 is currently distributed such that geographical accessibility to these services exists.

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