1. Michigan’s Certificate of Need Program Michigan Department of Community Health

2. 2 Federal Certificate of Need Background  Dist. of Columbia and New York developed CON in 1964.  Federally mandated CON programs were established as a national health care cost containment strategy. The 1974 National Health Planning and Resources Development Act mandated that states have CON programs to be eligible for certain public health funds.  In 1986, the federal mandate for CON was not renewed.  CON regulations are structured, in principle, to improve access to quality health care services while containing costs. Health care organizations are required to demonstrate need before investing in a regulated facility, service or equipment.  Since the repeal of the federal mandate, 37 states have retained some form of a CON program.

3. 3 Certificate of Need Programs Range of Services Reviewed Under State CON Programs Source: 2002 National Directory of Health Planning, Policy and Regulatory Agencies, American Health Planning Association. Non-CON StatesLess than 10 weighted services10-19 weighted servicesMore than 20 weighted services StateRank/StateServicesRank/StateServicesRank/StateServices Arizona24 Arkansas7 9 North Carolina251 Maine24 California25 Oklahoma610 Mississippi182 Connecticut26 Colorado26 Iowa911 D.C.233 Georgia25 Idaho27 Virginia2012 Tennessee204 Alaska27 Indiana28 Florida1113 Alabama205 West Virginia26 Kansas29 Montana714 Maryland176 Vermont25 Minnesota30 Massachusetts1615 Rhode Island197 Missouri21 N. Mexico31 Delaware816 New York258 South Carolina19 N. Dakota32 Wisconsin417 Hawaii25 Pennsylvania33 Nevada718 Michigan18 S. Dakota34 Nebraska219 Kentucky18 Texas35 Oregon220 Washington15 Utah36 Ohio121 Illinois19 Wyoming37 Louisiana222 New Jersey12 Note: Ranking/groupings based on weighted services.23 New Hampshire14

4. 4 Michigan CON Legislation  Public Act 368 of 1978 mandated the Michigan CON program.  The CON Reform Act of 1988 was passed to create a systematic way to develop standards and reduce the number of services requiring a CON. The act also created the CON Commission. The commission, whose membership is appointed by the Governor, is responsible for developing and approving CON review standards.  Public Act 619 of 2002 modified several sections the Public Health Code pertaining to CON including, but not limited to,: No CON required for non-clinical capital expenditure projects Redefined “rural county” Expanded exceptions to CON under MCL 333.22209 Expanded the CON Commission Requires review of standards every three years and changes method for developing standards

5. 5 The following projects must obtain a CON [M.C.L. 333.22209(1)]:  Acquire an existing health facility or begin operation of a health facility at a site that is not currently licensed for that type  Make a change in the bed capacity of a health facility  Initiate, replace, or expand a covered clinical service  Make a covered capital expenditure Capital expenditure projects (i.e., construction, renovation) must obtain a CON if the projects exceeds [M.C.L. 333.22203]:  $2,622,500 for clinical service areas, as of January 2004 Note: Thresholds are indexed annually by the department based on the Consumer Price Index. Michigan CON Program Requirements and Standards

6. 6 Michigan CON Program Requirements and Standards continued…  Air ambulances (helicopters)  Cardiac catheterization, including diagnostic, therapeutic, angioplasty, PCI, and electrophysiology  Computed tomography (CT) scanners  Hospital beds – general acute care  Magnetic resonance imaging (MRI)  Megavoltage radiation therapy (MRT)  Neonatal intensive care units (NICU)  Nursing home/hospital long-term care beds  Open heart surgery  Positron emission tomography (PET)  Psychiatric beds – acute inpatient  Surgical services – hospital and free-standing  Transplantation services – bone marrow, including peripheral stem cell, heart, heart-lung, lung, liver, and pancreas  Urinary lithotripters Covered Items, Clinical Services and Equipment:

7. 7 Michigan CON Program Application Review Process Contact from Applicant (phone, meeting, letter) CON Review Section (CRS) Application to CRS Request for additional information Additional information review Application deemed complete Request info. to CRS & local rev. agency Application forms sent to applicant within 15 days CRS receives LOI LOI pkg. sent to applicant 30 days No Application to local review agency Recommendations to CRS in advance of decision date 30 days (non-substantive) 90 days (substantive/comparative) continued

8. 8 Michigan CON Program Application Review Process continued…

9. 9

10. 10 Michigan CON Program Application Review Process continued…

11. 11 Designated Application Dates Non-substantive review – any workday Substantive review – 1 st workday of month Comparative review – 1 st workday of Feb., June, or Oct. Non-substantive Review Proposed decision Final decision 45 days 5 days Denial Proposed decision Substantive Individual Review Final decision Approval 5 days 120 days 15 days Comparative grouping Single proposed decision Potential Comparative Not comparativeComparative 30 days 120 days Final decision Hearing Request for hearing Waive mandatory hearing date Reconsideration Approval Final decision 90 days Request for hearing 15 days 90 days unless waived Continued Michigan CON Program Application Review Process continued…

12. 12 MDCH and the Office of the Attorney General provide input (administrative feasibility and legality) regarding any proposed standards. Commission approves, disapproves, or revises proposed standards. Commission, standard advisory committee, MDCH or private consultant develops draft standards. MDCH also provides staff assistance. Proposed standards are disapproved by Commission. Commission meets to approve, disapprove, or revise proposed FINAL review standards. Sent to joint legislative committee for 30-day comment period. Commission holds public hearing. Standards may be returned for further work. Review standards become effective and sent to the Office of Regulatory Reform to be published. Standards are disapproved by Commission.Standards are approved by Commission. Approved standards sent to joint legislative committee and Governor for 45-day review period. Standards are approved by the joint legislative committee and the Governor. Standards are disapproved by the joint legislative committee and the Governor. Standards do not become effective or returned to the Commission for further work. Proposed standards may be returned to MDCH, standard advisory committee, or private consultant for further work. Proposed standards are approved by Commission. Michigan CON Commission Standards Development Process

13. 13 Michigan CON Program Surveillance Tools Tools:  Annual Hospital Statistical Questionnaire  Hospitals, freestanding surgical facilities, freestanding MRT facilities, and freestanding CT facilities  Annual PET scanner survey  MRI electronic database  Michigan Inpatient Data Base (MIDB) General Measures:Measures for Select Services:  Infrastructure (i.e., equipment)  Wait times  Procedures  Staffing  Weighted volumes  Certifications Michigan CON Authority: Act 368, P.A. 1978 – “ A health facility or agency shall provide the department with data and statistics required to enable the department to carry out functions required by federal and state law, including rules and regulations.”

14. 14 Michigan CON Program Web Site: www.michigan.gov/conwww.michigan.gov/con Highlights Listserv Standards Laws Rules Forms Notices FQA Contact Info Updates

15. 15 Question & Answers Contact Information: Certificate of Need Program Lewis Cass Building 320 S. Walnut Street, 3 rd Floor Lansing, Michigan 48913 Phone: 517/241-3344 Web Site: www.michigan.gov/conwww.michigan.gov/con