Report Title:

State Health Planning; Certificate of Need Program

Description:

Repeals the certificate of need program operated by the state health planning and development agency.

THE SENATE

S.B. NO.

1063

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO STATE HEALTH PLANNING.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 323D-2, Hawaii Revised Statutes, is amended to read as follows:

"323D-2 Definitions. As used in this chapter:

["Applicant" means any person who applies for a certificate of need under part V.

"Assisted living facility" means a combination of housing, health care services, and personalized support services designed to respond to individual needs, and to promote choice, responsibility, independence, privacy, dignity, and individuality. In this context, "health care services" means the provision of services in an assisted living facility that assists the resident in achieving and maintaining the highest state of positive well-being (i.e., psychological, social, physical, and spiritual) and functional status. This may include nursing assessment and monitoring, and the delegation of nursing tasks by registered nurses pursuant to chapter 457, care management, monitoring, records management, arranging for, and/or coordinating health and social services.

"Capital expenditure" means any purchase or transfer of money or anything of value or enforceable promise or agreement to purchase or transfer money or anything of value incurred by or in behalf of any person for construction, expansion, alteration, conversion, development, initiation, or modification as defined in this section. The term includes the:

(1) Cost of studies, surveys, designs, plans, working drawings, specifications, and other preliminaries necessary for construction, expansion, alteration, conversion, development, initiation, or modification;

(2) Fair market values of facilities and equipment obtained by donation or lease or comparable arrangements as though the items had been acquired by purchase; and

(3) Fair market values of facilities and equipment transferred for less than fair market value, if a transfer of the facilities or equipment at fair market value would be subject to review under section 323D-43.

"Certificate of need" means an authorization, when required pursuant to section 323D-43, to construct, expand, alter, or convert a health care facility or to initiate, expand, develop, or modify a health care service.

"Construct", "expand", "alter", "convert", "develop", "initiate", or "modify" includes the erection, building, reconstruction, modernization, improvement, purchase, acquisition, or establishment of a health care facility or health care service; the purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision therefor; the arrangement or commitment for financing the offering or development of a health care facility or health care service; any obligation for a capital expenditure by a health care facility; and studies, surveys, designs, plans, working drawings, specifications, procedures, and other actions necessary for any such undertaking, which will:

(1) Result in a total capital expenditure in excess of the expenditure minimum,

(2) Substantially modify, decrease, or increase the scope or type of health service rendered, or

(3) Increase, decrease, or change the class of usage of the bed complement of a health care facility.

"Expenditure minimum" means $4,000,000 for capital expenditures, $1,000,000 for new or replacement medical equipment and $400,000 for used medical equipment.

"Extended care adult residential care home" means an adult residential care home providing twenty-four-hour living accommodation for a fee, for adults unrelated to the licensee. The primary caregiver shall be qualified to provide care to nursing facility level individuals who have been admitted to a medicaid waiver program, or persons who pay for care from private funds and have been certified for this type of facility. There shall be two categories of extended care adult residential care homes, which shall be licensed in accordance with rules adopted by the department of health:

(1) Type I home shall consist of five or less unrelated persons with no more than two extended care adult residential care home residents; and

(2) Type II home shall consist of six or more unrelated persons and one or more persons may be extended care adult residential care home residents.]

"Health" includes physical and mental health.

"Health care facility" and "health care service" include any program, institution, place, building, or agency, or portion thereof, private or public, other than federal facilities or services, whether organized for profit or not, used, operated, or designed to provide medical diagnosis, treatment, nursing, rehabilitative, or preventive care to any person or persons. The terms include, but are not limited to, health care facilities and health care services commonly referred to as hospitals, extended care and rehabilitation centers, nursing homes, skilled nursing facilities, intermediate care facilities, hospices for the terminally ill that require licensure or certification by the department of health, kidney disease treatment centers including freestanding hemodialysis units, outpatient clinics, [organized ambulatory health care facilities,] emergency care facilities and centers, home health agencies, health maintenance organizations, and others providing similarly organized services regardless of nomenclature.

"Health care provider" means a health care facility, physician, dentist licensed under chapter 448, chiropractor licensed under chapter 442, optometrist licensed under chapter 459, podiatrist licensed under chapter 463E, psychologist licensed under chapter 465, occupational therapist subject to chapter 457G, and physical therapist licensed under chapter 461J.

["Organized ambulatory health care facility" means a facility not part of a hospital, which is organized and operated to provide health services to outpatients. The state agency may adopt rules to establish further criteria for differentiating between the private practice of medicine and organized ambulatory health care facilities.]

"Person" means an individual or a natural person, a trust or estate, a society, a firm, an assembly, a partnership, a corporation, a professional corporation, an association, the State, [any political subdivision of the State,] a county, a state agency or any instrumentality of the State, a county agency or any instrumentality of a county.

"Physician" means a doctor of medicine or osteopathy who is legally authorized to practice medicine and surgery by the State.

["Primary care clinic" means a clinic for outpatient services providing all preventive and routine health care services, management of chronic diseases, consultation with specialists when necessary, and coordination of care across health care settings or multiple providers or both. Primary care clinic providers include:

(1) General or family practice physicians;

(2) General internal medicine physicians;

(3) Pediatricians;

(4) Obstetricians and gynecologists;

(5) Physician assistants; and

(6) Advanced practice registered nurses.

"Review panel" means the panel established pursuant to section 323D-42.]

"State agency" means the state health planning and development agency established in section 323D-11.

"State health services and facilities plan" means the comprehensive plan for the economical delivery of health services in the State prepared by the statewide council.

"Statewide council" means the statewide health coordinating council established in section 323D-13.

"Subarea" means one of the geographic subareas designated by the state agency pursuant to section 323D-21.

"Subarea council" means a subarea health planning council established pursuant to section 323D-21.

["Substantially modify, decrease, or increase the scope or type of health service" refers to the establishment of a new health care facility or health care service or the addition of a clinically related (i.e., diagnostic, curative, or rehabilitative) service not previously provided or the termination of such a service which had previously been provided.]"

SECTION 2. Section 323D-12, Hawaii Revised Statutes, is amended to read as follows:

"323D-12 Health planning and development functions; state agency. (a) The state agency shall:

(1) Have as a principal function the responsibility for promoting accessibility for all the people of the State to quality health care services at reasonable cost. The state agency shall conduct such studies and investigations as may be necessary as to the causes of health care costs including inflation. The state agency may contract for services to implement this paragraph. [The certificate of need program mandated under part V shall serve this function.] The state agency shall promote the sharing of facilities or services by health care providers whenever possible to achieve economies and shall restrict unusual or unusually costly services to individual facilities or providers where appropriate;

(2) Serve as staff to and provide technical assistance and advice to the statewide council and the subarea councils in the preparation, review, and revision of the state health services and facilities plan; and

(3) Conduct the health planning activities of the State in coordination with the subarea councils, implement the state health services and facilities plan, and determine the statewide health needs of the State after consulting with the statewide council[; and

(4) Administer the state certificate of need program pursuant to part V.].

(b) The state agency may:

(1) Prepare [such] reports and recommendations on Hawaii's health care costs and public or private efforts to reduce or control costs and health care quality as it deems necessary. The report may include, but not be limited to, a review of health insurance plans, the availability of various kinds of health insurance and malpractice insurance to consumers, and strategies for increasing competition in the health insurance field[.];

(2) Prepare and revise as necessary the state health services and facilities plan[.];

[(3) Prepare, review, and revise the annual implementation plan.

(4)] (3) Assist the statewide council in the performance of its functions[.];

[(5)] (4) Determine the need for new health services proposed to be offered within the State[.];

[(6)] (5) Assess existing health care services and facilities to determine whether there are redundant, excessive, or inappropriate services or facilities and make public findings of any that are found to be so. The state agency shall weigh the costs of the health care services or facilities against the benefits the services or facilities provide and there shall be a negative presumption against marginal services[.];

[(7)] (6) Provide technical assistance to persons, public or private, in obtaining and filling out the necessary forms for the development of projects and programs[.];

[(8)] (7) Prepare reports, studies, and recommendations on emerging health issues, such as medical ethics, health care rationing, involuntary care, care for the indigent, and standards for research and development of biotechnology and genetic engineering[.]; and

[(9)] (8) Conduct such other activities as are necessary to meet the purposes of this chapter."

SECTION 3. Section 323D-13, Hawaii Revised Statutes, is amended to read as follows:

"323D-13 Statewide health coordinating council. (a) There is established a statewide health coordinating council which shall be advisory to the state agency and the membership of which as appointed by the governor shall not exceed twenty members.

(b) The members of the statewide council shall be appointed by the governor in accordance with section 26-34, provided that a nonvoting, ex officio member who is the representative of the [Veterans' Administration] Department of Veterans Affairs shall be designated by the [Veterans' Administration.] Department of Veterans Affairs. The membership of the statewide council shall be broadly representative of the age, sex, ethnic, income, and other groups that make up the population of the State and shall include representation from the subarea councils, business, labor, and health care providers. A majority but not more than eleven of the members shall be consumers of health care who are not also providers of health care.

(c) The statewide council shall select a chairperson from among its members. The members of the statewide council shall not be compensated but shall be reimbursed for necessary expenses incurred in the performance of their duties.

(d) The number of members necessary to constitute a quorum to do business shall consist of a majority of all members who have accepted nomination to the council, and have been confirmed and qualified as members of the council. When a quorum is in attendance, the concurrence of a majority of the members in attendance shall make any action of the council valid.

[(e) No member of the statewide council shall, in the exercise of any function of the statewide council described in section 323D-14(3), vote on any matter before the statewide council respecting any individual or entity with which the member has or, within the twelve months preceding the vote, had any substantial ownership, employment, medical staff, fiduciary, contractual, creditor, or consultative relationship. The statewide council shall require each of its members who has or has had such a relationship with an individual or entity involved in any matter before the statewide council to make a written disclosure of the relationship before any action is taken by the statewide council with respect to the matter in the exercise of any function described in section 323D-14 and to make the relationship public in any meeting in which the action is to be taken.]"

SECTION 4. Section 323D-13.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]323D-13.5[]] Disqualification from position or membership. The chairpersons of the statewide council[,] and the subarea health planning councils [and the review panel,] shall not be employed by or married to health care providers."

SECTION 5. Section 323D-14, Hawaii Revised Statutes, is amended to read as follows:

"323D-14 Functions; statewide health coordinating council. The statewide health coordinating council shall:

(1) Prepare and revise as necessary the state health services and facilities plan;

(2) Advise the state agency on actions under section 323D-12; and

[(3) Appoint the review panel pursuant to section 323D-42; and

(4)] (3) Review and comment upon the [following actions by the state agency before such actions are made final:

(A) The making of findings as to applications for certificate of need; and

(B) The making of] state agency's findings as to the appropriateness of those institutional and noninstitutional health services offered in the State[.] before the findings are made final."

SECTION 6. Section 323D-18, Hawaii Revised Statutes, is amended to read as follows:

"323D-18 Information required of providers. Providers of health care doing business in the State shall submit such statistical and other reports of information related to health and health care as the state agency finds necessary to the performance of its functions. The information deemed necessary includes [but is not limited to:

(1) Information regarding changes in the class of usage of the bed complement of a health care facility under section 323D-54(9);

(2) Implementation of services under section 323D-54;

(3) Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, under section 323D-54(10);

(4) Replacement of existing equipment with an updated equivalent under section 323D-54(11);

(5) Primary care clinics under the expenditure thresholds under section 323D-54(12); and

(6) Equipment] information regarding equipment and services related to that equipment, that are primarily intended for research purposes as opposed to usual and customary diagnostic and therapeutic care."

SECTION 7. Section 323D-22, Hawaii Revised Statutes, is amended to read as follows:

"323D-22 Subarea health planning councils[,]; functions, quorum, and number of members necessary to take valid action. (a) Each subarea health planning council shall review, seek public input, and make recommendations relating to health planning for the geographical subarea it serves. Each subarea health planning council also shall recommend for gubernatorial appointment at least one person from its membership to be on the statewide council. In addition, the subarea health planning councils shall:

(1) Identify and recommend to the state agency and the statewide council the data needs and special concerns of the respective subareas with respect to the preparation of the state plan[.];

(2) Provide specific recommendations to the state agency and the statewide council regarding the highest priorities for health services and resources development[.];

(3) Review the state health services and facilities plan as it relates to the respective subareas and make recommendations to the state agency and the statewide council[.];

[(4) Advise the state agency in the administration of the certificate of need program for their respective subareas.

(5)] (4) Advise the state agency on the cost of reimbursable expenses incurred in the performance of their functions for inclusion in the state agency budget[.];

[(6)] (5) Advise the state agency in the performance of its specific functions[.]; and

[(7)] (6) Perform other such functions as agreed upon by the state agency and the respective subarea health planning councils.

[(8) Each subarea health planning council shall recommend for gubernatorial appointment at least one person from its membership to be on the statewide council.]

(b) The number of members necessary to constitute a quorum to do business shall consist of a majority of all the members who have accepted nomination to the subarea health planning council[,] and have been confirmed and qualified as members of the subarea council. When a quorum is in attendance, the concurrence of a majority of the members in attendance shall make any action of the subarea council valid."

SECTION 8. Chapter 323D, part V, Hawaii Revised Statutes, is repealed.

SECTION 9. Section 323D-73, Hawaii Revised Statutes, is amended to read as follows:

"[[]323D-73[]] Notice; procedures. (a) Within five working days after receipt of a complete application under section 323D-72, the agency shall give public notice of the application in the affected county or counties where the hospital is located and shall notify by first-class mail any person who has requested notice of the filing of such applications. The public notice shall state that a completed application has been received, state the names of the parties to the agreement, describe the contents of the application, and state the date by which a person may submit written comments about the application to the agency.

(b) Within ninety days after receiving a complete application, the agency shall review the application in accordance with the standards set forth in this part and approve or disapprove the acquisition.

Within twenty days after receiving a complete application, the attorney general shall determine whether a review of the application in accordance with section 323D-76 is appropriate and notify the applicant if a review is warranted. If the attorney general determines that a review is unnecessary or not appropriate, then none of the other provisions of this part applicable to review by the attorney general shall apply.

[(c) For acquisitions which require approval from the agency under this part and a certificate of need, the applicant shall submit a single application for both purposes and the application shall be reviewed under a single unified review process by the agency. Following the single unified review process, the agency shall simultaneously issue its decision regarding the certificate of need and its decision for purposes of the sale of a hospital under this part.]"

SECTION 10. Section 323D-74, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The agency, after consultation with the attorney general, [shall,] if appropriate, shall hold a public hearing during the course of review, which hearing may be held jointly with [the certificate of need review panel or] the statewide health coordinating council, and in which any person may file written comments and exhibits or appear and make a statement. The agency or the attorney general may subpoena additional information or witnesses, require and administer oaths, require sworn statements, take depositions, and use related discovery procedures for purposes of the hearing and at any time prior to making a decision on the application."

SECTION 11. Section 323D-75, Hawaii Revised Statutes, is amended by amending subsections (d) and (e) to read as follows:

"(d) Any affected person may appeal a final decision by the agency to [the] a reconsideration committee [created under section 323D-47 under procedures substantially similar to those for appeals of health care certificate of need decisions. The reconsideration committee shall have the same powers and duties with respect to appeals under this part as exist for appeals to the reconsideration committee regarding issuance of certificates of need]. The state agency may provide by rules adopted in conformity with chapter 91 for a procedure by which any person may, for good cause shown, request in writing a public hearing before a reconsideration committee for purposes of reconsideration of the agency's decision. The reconsideration committee shall consist of the administrator of the state agency and the chairpersons of the statewide council, the plan development committee of the statewide council, and the appropriate subarea health planning council. The administrator of the state agency shall be the chairperson of the reconsideration committee. A request for a public hearing shall be deemed by the reconsideration committee to have shown good cause, if:

(1) It presents significant, relevant information not previously considered by the state agency;

(2) It demonstrates that there have been significant changes in factors or circumstances relied upon by the state agency in reaching its decision;

(3) It demonstrates that the state agency has materially failed to follow its adopted procedures in reaching its decision;

(4) It provides such other bases for a public hearing as the state agency determines constitutes good causes; or

(5) The decision of the administrator differs from the recommendation of the statewide council.

To be effective, a request for such a hearing shall be received within ten working days of the state agency decision. The findings, conclusions, and decisions of the reconsideration committee shall constitute the determination of the agency. The agency, the applicant, or any affected person who has intervened in the matter before the reconsideration committee may seek judicial review of any agency determination.

(e) If both the agency and the attorney general review the application, [it] the application shall not be granted unless it is approved by both."

SECTION 12. Section 323D-81, Hawaii Revised Statutes, is amended to read as follows:

"[[]323D-81[]] Prior acquisitions. Any acquisition of a hospital before July 20, 1998 [and any acquisition in which an application for a certificate of need has been granted by the agency before July 20, 1998] is not subject to this part."

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect upon its approval.

INTRODUCED BY:

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