Bill Text: HI SB939 | 2010 | Regular Session | Introduced
Bill Title: Health Care; Certificate of Need
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [SB939 Detail]
Download: Hawaii-2010-SB939-Introduced.html
Report Title:
Health Care; Certificate of Need
Description:
Amends the current certificate of need requirement under chapter 323D, Hawaii Revised Statutes, to promote increased access to quality health care.
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THE SENATE |
S.B. NO. |
939 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ACCESS TO HEALTH CARE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to improve the quality of Hawaii's health care system. In implementing chapter 323D, Hawaii Revised Statutes, the state health planning and development agency in the past has focused on its "gatekeeper" role by devoting substantial time and resources to adjudications of requests for a certificate of need. The certificate of need process (1) acts as an impediment to Hawaii health care providers who desire to expand their health care services; and (2) serves as a barrier to new medical providers starting up business in this State. This Act amends chapter 323D, Hawaii Revised Statutes, to clarify the "development" responsibility of the state health planning and development agency and to encourage the state health planning and development agency to focus greater time and resources on enhancing access to quality health care within this State.
Currently, chapter 323D mandates that health care providers seek a certificate of need from the state health planning and development agency if they wish (1) to begin offering most types of health care services; (2) to end rendering most types of health care services; (3) to provide such health care services at a different location; or (4) to construct virtually any type of health care facility.
To encourage the development and expansion of the medical industry and to welcome improvements in medical technology, this Act broadens the list of facilities and services that are exempt from the certificate of need requirement under chapter 323D.
For those health care providers who remain subject to the certificate of need requirement, this Act further revises the certificate of need administrative process in chapter 323D to: (1) reverse the order in which the statewide health coordinating council ("statewide council") and the subarea health planning councils ("county councils") hear a certificate of need application so that the state health planning and development agency administrator and the county council are the last to consider the certificate of need request; (2) require the state health planning and development agency administrator to give greater weight to the county council's decision when the state council's and county council's recommendations conflict; (3) increase the expenditure minimums for capital expenditures and for new or replacement medical equipment; and (4) require that a hearing on an applicant's request for reconsideration be held on the island where the new facility or activity will be based.
With these amendments to chapter 323D, the legislature anticipates that the State's health care services and health care facilities will be improved for the residents of Hawaii and will make Hawaii a destination location for patients in the Asia-Pacific region who are seeking quality health care services.
SECTION 2. Chapter 323D, Hawaii Revised Statutes, is amended by adding to part V a new section to be appropriately designated and to read as follows:
"§323D- State agency review of subarea council and statewide council recommendations for issuance or denial of certificate of need. In reviewing the recommendations of the respective subarea council and the statewide council regarding a certificate of need application, the state agency shall give greater weight to the recommendation of the respective subarea council if it conflicts with the recommendation of the statewide council, unless the state agency finds good cause exists to reject such recommendation."
SECTION 3. Section 323D-1, Hawaii Revised Statutes, is amended to read as follows:
"§323D-1 [Purpose.] General
purpose and objectives. The
purpose of this chapter is to establish a health planning and resources
development program to promote accessibility for all the people of the State to
quality health care services at reasonable cost.
The objectives of this health planning and resources development program are:
(1) To make broad policy determinations with respect to development of the health care industry, and to stimulate through research and demonstration projects those industrial and economic development efforts that offer the most immediate promise of expanding the health care industry, and the types of health care services available in this State, and of further diversifying this State's economy;
(2) To determine through technical and research studies the profit potential of new or expanded undertakings in the health care industry and high technology medical research;
(3) To disseminate information to assist current health care providers and high technology medical researchers in this State; to attract new health care providers and high technology medical researchers to this State; and to encourage capital investment in existing and new areas of health care services and high technology medical research;
(4) To encourage innovation of research into new medical technologies to improve the lives of this State's citizens as well as encourage others from within this country and from the world to seek medical treatment from health care providers and high technology medical researchers in Hawaii;
(5) To enter into contracts as may be necessary or advisable to accomplish the foregoing purpose and objectives;
(6) To work collaboratively with other state departments and agencies and with other governmental entities operating both within and outside this State to accomplish the foregoing purpose and objectives; and
(7) To disseminate information developed for or by the program pertaining to the development of this State's health care providers and high technology medical researchers to assist the present health care and medical research industry in this State; to attract new industry and investment in this State in highly advanced medical technologies; and to lead this State into becoming America's vanguard of cutting edge medical technology, particularly in the Asia-Pacific region."
SECTION 4. Section 323D-2, Hawaii Revised Statutes, is amended to read as follows:
"§323D-2 Definitions. [As used in
this chapter:] Whenever used in this chapter, and unless the context
requires otherwise:
"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 objection 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] $8,000,000 for capital
expenditures[, $1,000,000] and $2,000,000 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 5. 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;
(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) Assist the statewide council in the performance of its functions.
(5) Determine the need for new health services proposed to be offered within the State.
(6) 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) Provide technical assistance to persons, public or private, in obtaining and filling out the necessary forms for the development of projects and programs.
(8) 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.
(9) Conduct such other activities as are necessary to meet the purposes of this chapter."
SECTION 6. Section 323D-14, Hawaii Revised Statutes, is amended to read as follows:
"§323D-14 Functions; statewide health coordinating council. The statewide 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;
(3) Appoint the review panel pursuant to section 323D-42; and
[(4) 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 findings as to the
appropriateness of those institutional and noninstitutional health services
offered in the State.]
(4) Perform the initial review of certificate of need applications including making recommendations to the state agency and the respective subarea council and commenting upon the certificate of need application."
SECTION 7. 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 and services related to that
equipment, that are primarily intended for research purposes as opposed to
usual and customary diagnostic and therapeutic care.]"
SECTION 8. Section 323D-22, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Each subarea health planning council shall review, seek public input, and make recommendations relating to health planning for the geographical subarea it serves. In addition, the subarea health planning councils shall:
(1) Identify and recommend to the state agency and the 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 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 council].
(4) Advise the state agency in the administration of
the certificate of need program for their respective subareas[.],
including reviewing comments of the statewide council and the review panel, and
making a final recommendation to the state agency.
(5) 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) Advise the state agency in the performance of its specific functions.
(7) Perform other such functions as agreed upon by the state agency and the respective subarea 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."
SECTION 9. Section 323D-44.5, Hawaii Revised Statutes, is amended to read as follows:
"§323D-44.5
Administrative review of certain applications for certificate of need. The
state agency shall adopt rules in conformity with chapter 91 providing for
administrative review and decision on certain applications for certificate of
need. Each application reviewed under this section may be subject to a public
information meeting before the state agency makes its decision. The agency, in
the State and in the county affected, shall give public notice of applications
for administrative review received by the agency. Interested persons may
request in writing a public meeting before the agency renders a decision on the
administrative application. If a request for a public meeting is received, the
administrator will preside over the meeting. If no request is received by the
agency within seven days of the public notice date, no public meeting need be
scheduled. [Applications subject to administrative review and decision
under this section shall include but are not limited to applications that are:
(1) Inconsistent with or contrary to the
state health services and facilities plan under section 323D-15;
(2) Determined not to have a significant
impact on the health care system; or
(3) Involve capital or annual operating
expenses below a significant level.]"
SECTION 10. Section 323D-44.6, Hawaii Revised Statutes, is amended to read as follows:
"[[]§323D-44.6[]]
Review of certain applications for certificate of need; waiver. The subarea
council, the review panel, and the statewide council may, at their discretion,
choose to waive their respective prerogatives of review of any certificate of
need application."
SECTION 11. Section 323D-45, Hawaii Revised Statutes, is amended to read as follows:
"§323D-45
Subarea council, review panel, and statewide council recommendations for
issuance or denial of certificates of need. (a) Except for an
administrative review as provided in section 323D-44.5, or in an emergency
situation or other unusual circumstances as provided in section 323D-44(c), the
state agency shall refer every application for a certificate of need to [the
appropriate subarea council or councils, the review panel, and] the
statewide council[.], the review panel, and the appropriate subarea
council. The [subarea] statewide council and the review
panel shall consider all relevant data and information submitted by the state
agency, [subarea councils,] other areawide or local bodies, and the
applicant, and may request from them additional data and information. The
review panel shall consider each application at a public meeting and shall
submit its recommendations with findings to the statewide council. The [statewide]
subarea council shall consider the recommendation of the review panel and
the statewide council at a public meeting and shall submit its
recommendations to the state agency within such time as the state agency
prescribes. The statewide council [and], the review panel,
and the subarea council may join together to hear or consider
simultaneously information related to an application for a certificate of need.
(b) At a public
meeting in which [a subarea council or the review panel] the
statewide council, review panel, or subarea council considers an
application for a certificate of need, any person shall have the right to be
represented by counsel and to present oral or written arguments and evidence
relevant to the application; any person directly affected by the application
may conduct reasonable questioning of persons who make factual allegations
relevant to the application; any staff member of the state agency may conduct
reasonable questioning of persons who make factual allegations relevant to the
application; and a record of the meeting shall be kept."
SECTION 12. Section 323D-47, Hawaii Revised Statutes, is amended to read as follows:
"§323D-47
Request for reconsideration. (a) 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[,] and the review panel, [the plan development
committee of the statewide council,] and the chairs and vice chairs of
the appropriate subarea health planning council. The administrator 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] subarea council.
(b) To
be effective a request for such a hearing shall be received within [ten
working] thirty calendar days of the state agency decision. A
decision of the reconsideration committee following a public hearing under this
section shall be considered a decision of the state agency for purposes of
section 323D-44.
(c) The public hearing on a request for reconsideration shall be held on the island where the facility is to be built or the service is to be rendered."
SECTION 13. Section 323D-49, Hawaii Revised Statutes, is amended to read as follows:
"§323D-49
Certificates of need; licenses and permits. (a) [No] When a
certificate of need is required, no permit or license shall be issued by
any county or state officer for the development, construction, expansion,
alteration, conversion, initiation, or modification of a health care facility
or health care service, other than an existing hospital, or for the operation
of a new health care facility or health care service unless there is submitted
in connection with the application for such permit or license a current certificate
of need issued by the state agency or a statement issued by the state agency
that the health care facility or health care service is not required to hold a
certificate of need under this part.
(b) [No]
When a certificate of need is required, no building permit shall be
issued by any county or state officer for the development, construction,
expansion, alteration, conversion, initiation, or modification of an existing
hospital unless there is submitted in connection with the application for such
building permit a current certificate of need issued by the state agency or a
statement issued by the state agency that the existing hospital is not required
to hold a certificate of need under this part."
SECTION 14. Section 323D-50, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Any
license to operate a health facility may be revoked or suspended by the
department of health at any time in a proceeding before the department for any
person proceeding with an action covered under section 323D-43 without a
certificate of need. If any such license is revoked or suspended by the
department, the holder of the license shall be notified in writing by the
department of the revocation or suspension. [Any license to operate a
health facility that has been revoked under this section shall not be restored
except by action of the department.]"
SECTION 15. Section 323D-54, Hawaii Revised Statutes, is amended to read as follows:
"§323D-54 Exemptions from certificate of need requirements. Nothing in this part or rules with respect to the requirement for certificates of need applies to:
(1) Offices of physicians, dentists, or other practitioners of the healing arts in private practice as distinguished from organized ambulatory health care facilities, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any private office or clinic involving a total expenditure in excess of the expenditure minimum;
(2) Laboratories, as defined in section 321-11(12), except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any laboratory involving a total expenditure in excess of the expenditure minimum;
(3) Dispensaries and first aid stations located within business or industrial establishments and maintained solely for the use of employees; provided such facilities do not regularly provide inpatient or resident beds for patients or employees on a daily twenty-four-hour basis;
(4) Dispensaries or infirmaries in correctional or educational facilities;
(5) Dwelling establishments, such as hotels, motels, and rooming or boarding houses that do not regularly provide health care facilities or health care services;
(6) Any home or institution conducted only for those who, pursuant to the teachings, faith, or belief of any group, depend for healing upon prayer or other spiritual means;
(7) Dental clinics;
(8) Nonpatient areas of care facilities such as parking garages and administrative offices;
(9) Bed changes that involve ten per cent or ten beds of existing licensed bed types, whichever is less, of a facility's total existing licensed beds within a two-year period;
(10) Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, that have already determined that need for the projects exists;
(11) Replacement of existing equipment with its modern-day equivalent;
(12) Primary care clinics under the expenditure thresholds referenced in section 323D-2;
(13) Equipment and services related to that equipment, that are primarily invented and used for research purposes as opposed to usual and customary diagnostic and therapeutic care;
(14) Capital expenditures that are required:
(A) To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations;
(B) To comply with state licensure standards;
(C) To comply with accreditation standards, compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of such Act;
(15) Extended care adult residential care homes and
assisted living facilities; [or]
(16) Acute psychiatric beds and acute or long-term swing beds as defined in administrative rules;
(17) Long-term psychiatric beds, long-term tuberculosis beds, long-term mental retardation beds, long-term hansen's disease beds, long-term children's orthopedics beds, long-term rehabilitation beds, skilled nursing facilities, intermediate care facilities, mental retardation facilities, special treatment facilities, and care homes, as defined in administrative rules;
(18) Outpatient clinics, ultrasound services, clinical laboratories, pharmacies, social services, home health agencies, drug rehabilitation centers, alcohol rehabilitation centers, recompression centers, mental health centers, family planning clinics, prenatal clinics, abortion clinics, fixed-wing ambulances, helicopter ambulances, comprehensive outpatient rehabilitative facilities, chronic renal dialysis centers, and hospices, as defined in administrative rules; or
[16)] (19) Other facilities or services
that the agency through the statewide council chooses to exempt, by rules
pursuant to section 323D-62."
SECTION 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 17. This Act shall take effect upon its approval.
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