AN ACT CONCERNING CERTIFICATES OF NEED.

This bill changes several aspects of the Office of Health Care Access's (OHCA) Certificate of Need (CON) program. It:

1. defines transfers of ownership and control for purposes of determining when a CON is needed and eliminates two circumstances under which a health care institution must ask OHCA to review governance changes;

2. exempts the introduction of certain outpatient services and the purchase of cineangiography equipment from CON review and permits OHCA to waive CON review for certain outpatient facilities seeking to replace imaging equipment; and

3. requires CON review for psychiatric residential treatment facilities.

By law, a health care institution or facility must submit a letter of intent to OHCA before transferring all or part of its ownership or control. OHCA then determines whether a CON review is needed. The law applies to hospitals, outpatient surgical facilities, imaging centers, and mental health facilities, among other institutions, and their parents, subsidiaries, affiliates, and joint ventures.

The bill defines such a transfer to mean an action that affects or changes the governance or controlling body of the institution or facility. It includes mergers, affiliations, or any sale or transfer of a facility's or institution's net assets. The bill eliminates the requirement that a health care institution must ask OHCA for permission before (1) changing the governing powers of its parent's or an affiliate's board or (2) transferring the powers or control of an affiliate's governing or controlling body.

The bill exempts from CON review a facility's or institution's plan to provide services at an alternative location in its “primary service area” (The bill does not define “primary service area”; in practice, the CON applicant determines its primary service area if it was providing these services on July 1, 2009). The exemption applies when (1) service is transferred completely from the original to the new location and (2) service is provided at both locations. It applies to services like physical, speech, and occupational therapy; occupational injury and disease management; and “company-contracted services,” (i. e. , services the institution or facility obtains through contracting with a third party).

The bill exempts the acquisition of new cineangiography equipment from CON review. Cineangiography equipment is used to diagnose heart and vascular conditions by filming the passage of a contrast medium through blood vessels.

The bill permits OHCA to waive CON review for certain institutions, facilities, and providers that want to replace imaging equipment. It applies to entities that received a CON exemption for the acquisition of the original equipment under a 2005 act (PA 05-93, as amended by PA 06-28). To obtain the initial exemption, that act required an entity to (1) prove that it had acquired the equipment before July 1, 2005 for less than $ 400,000 and had put it into operation before July 1, 2006 or (2) obtain a CON or a determination that one was not needed by July 1, 2005.

The bill requires OHCA to review all proposals to establish a psychiatric residential treatment facility, change its ownership or control, or make $ 3 million or more in capital expenditures for such a facility. The review is required even for proposals from nonprofit facilities, institutions, and providers that contract with the state, which, under current law, OHCA can exempt from CON review under certain conditions. Under federal law, a psychiatric residential treatment facility is a facility, other than a hospital, that provides inpatient psychiatric services to people under age 21.

Yea

Nay

(03/23/2009)