PRIOR PRINTER'S NOS. 2451, 3857, 4007         PRINTER'S NO. 4124

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1982 Session of 1991


        INTRODUCED BY PISTELLA, RICHARDSON, FLEAGLE, TRICH, BELFANTI,
           SCRIMENTI, LESCOVITZ, KUKOVICH, HARPER, OLASZ, DALEY, TRELLO,
           GIGLIOTTI, MELIO, JOSEPHS, McNALLY, JAMES AND ARNOLD,
           AUGUST 4, 1991

        AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
           NOVEMBER 16, 1992

                                     AN ACT

     1  Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An
     2     act relating to health care; prescribing the powers and
     3     duties of the Department of Health; establishing and
     4     providing the powers and duties of the State Health
     5     Coordinating Council, health systems agencies and Health Care
     6     Policy Board in the Department of Health, and State Health
     7     Facility Hearing Board in the Department of Justice;
     8     providing for certification of need of health care providers
     9     and prescribing penalties," abolishing the State Health
    10     Coordinating Council and the Health Care Policy Board;
    11     further providing for health planning; establishing the
    12     Health Policy Board; and making repeals.

    13     The General Assembly of the Commonwealth of Pennsylvania
    14  hereby enacts as follows:
    15     Section 1.  Sections 103, 201 and 202 of the act of July 19,
    16  1979 (P.L.130, No.48), known as the Health Care Facilities Act,
    17  amended or added July 12, 1980 (P.L.655, No.136), are amended to
    18  read:
    19  Section 103.  Definitions.
    20     The following words and phrases when used in this act shall
    21  have, unless the context clearly indicates otherwise, the


     1  meanings given to them in this section:
     2     "Act."  The comprehensive Health Care Facilities Act.
     3     ["Affected person."  A person whose proposal is being
     4  reviewed for purposes of certificate of need, the health systems
     5  agency for the health service area in which the proposed new
     6  institutional health service is to be offered or developed,
     7  health systems agencies serving contiguous health service areas,
     8  health care facilities and health maintenance organizations
     9  located in the health service area which provide institutional
    10  health services, and those members of the public who are to be
    11  served by the proposed new institutional health services and
    12  those agencies, if any, which establish rates for health care
    13  facilities and health maintenance organizations located in the
    14  health systems area in which the proposed new institutional
    15  health service is to be offered or developed.
    16     "Annual implementation plan."  The latest health systems
    17  agency's annual statement of objectives to achieve the goals of
    18  the health systems plan, including the priorities established
    19  among the objectives.]
    20     "Board."  The Health Policy Board established under section
    21  401.1 of this act.
    22     "Certificate of need."  A [certificate] notice of approval
    23  issued by the department under the provisions of this act,
    24  including those NOTICES OF APPROVAL issued as an amendment to an  <--
    25  existing certificate of need.
    26     "Clinically related health service."  A CERTAIN diagnostic,    <--
    27  treatment or rehabilitative service, which may include            <--
    28  freestanding facilities or offices providing diagnostic,
    29  treatment or rehabilitative service. SERVICES AS DETERMINED IN    <--
    30  SECTION 701.
    19910H1982B4124                  - 2 -

     1     "Community-based health services planning committee."  A
     2  committee established in accordance with procedures approved by
     3  the Department of Health which includes representatives of local
     4  or regional groups of consumers, business, labor, health care
     5  providers, payors or other affected interests.
     6     "Conflict of interest."  For the purpose of section 501, the
     7  interest of any person, whether financial, by association with,
     8  or as a contributor of money or time to, any nonprofit
     9  corporation or other corporation, partnership, association, or
    10  other organization, and whenever a person is a director, officer
    11  or employee of such organization, but shall not exist whenever
    12  the organization in which such person is interested is being
    13  considered as part of a class or group for whom regulations are
    14  being considered, if the material facts as to the relationship
    15  or interest are disclosed or are known to the board.
    16     "Consumer."  A natural person [who is not a "provider of
    17  health care" as defined in Title XV of the Federal Public Health
    18  Service Act] who is not involved in the provision of health
    19  services or health insurance. For the purpose of [section 301]
    20  this act, any person who holds a fiduciary position in any
    21  health care facility [or], health maintenance organization or
    22  third party payor shall not be considered a consumer.
    23     "Department."  The Department of Health.
    24     "Develop."  When used in connection with health services or
    25  facilities, means to undertake those activities which on their
    26  completion will result in the offer of a new health service or
    27  the incurring of a financial obligation in relation to the
    28  offering of such a service.
    29     ["Health care facility."  A general or special hospital
    30  including tuberculosis and psychiatric hospitals, rehabilitation
    19910H1982B4124                  - 3 -

     1  facilities skilled nursing facilities, kidney disease treatment
     2  centers including free-standing hemodialysis units, intermediate
     3  care facilities and ambulatory surgical facilities, both profit
     4  and nonprofit and including those operated by an agency of State
     5  or local government, but shall not include an office used
     6  exclusively for their private or group practice by physicians or
     7  dentists, nor a program which renders treatment or care for drug
     8  or alcohol abuse or dependence, unless located within, by or
     9  through a health care facility, a facility providing treatment
    10  solely on the basis of prayer or spiritual means in accordance
    11  with the tenets of any church or religious denomination, nor a
    12  facility conducted by a religious organization for the purpose
    13  of providing health care services exclusively to clergymen or
    14  other persons in a religious profession who are members of the
    15  religious denominations conducting the facility.
    16     This definition shall exclude all health care facilities as
    17  hereinabove defined that do not accept, directly or indirectly,
    18  any Federal or State Governmental funds for capitalization,
    19  depreciation, interest, research or reimbursement, unless the
    20  Secretary of Health, Education and Welfare, pursuant to Federal
    21  Public Law 93-641, section 1523(a)(4)(B), concludes that this
    22  exclusionary provision is unsatisfactory to the Departments of
    23  Health, Education and Welfare.
    24     "Health maintenance organization."  An organization defined
    25  as a health maintenance organization by section 1531(8) of the
    26  Federal Public Health Service Act or an organization regulated
    27  by the act of December 29, 1972 (P.L.1701, No.364), known as the
    28  "Voluntary Nonprofit Health Service Act of 1972."]
    29     "Health care facility."  For purposes of Chapter 7 of this
    30  act, any health care facility providing clinically related
    19910H1982B4124                  - 4 -

     1  health services, including, but not limited to, a general or
     2  special hospital including psychiatric hospitals, rehabilitation
     3  hospitals, ambulatory surgical facilities, long-term care
     4  nursing facilities, cancer treatment centers using radiation
     5  therapy on an ambulatory basis, and inpatient drug and alcohol
     6  treatment facilities, both profit and nonprofit and including
     7  those operated by an agency or State or local government. The
     8  term shall not include an office used primarily for the private
     9  or group practice by health care practitioners where no
    10  reviewable clinically related health service is offered, a
    11  facility providing treatment solely on the basis of prayer or
    12  spiritual means in accordance with the tenets of any church or
    13  religious denomination, or a facility conducted by a religious
    14  organization for the purpose of providing health care services
    15  exclusively to clergy or other persons in a religious profession
    16  who are members of the religious denominations conducting the
    17  facility.
    18     "Health care practitioner."  An individual who is authorized
    19  to practice some component of the healing arts by a license,
    20  permit, certificate or registration issued by a Commonwealth
    21  licensing agency or board.
    22     "Health care provider" or "provider."  An individual, a trust
    23  or estate, a partnership, a corporation (including associations,
    24  joint stock companies and insurance companies), the
    25  Commonwealth, or a political subdivision or instrumentality
    26  (including a municipal corporation or authority) thereof, that
    27  operates a health care facility.
    28     "Health [service] planning area."  [The area served by a
    29  health systems agency as designated in accordance with Title XV
    30  of the Federal Public Health Service Act.] A geographic area
    19910H1982B4124                  - 5 -

     1  within the Commonwealth designated by the Department of Health
     2  for purposes of health planning.
     3     ["Health services."  Clinically related (i.e., diagnostic,
     4  treatment or rehabilitative) services, including alcohol, drug
     5  abuse and mental health services.
     6     "Health systems agency" or "HSA."  An entity which has been
     7  conditionally or fully designated pursuant to Title XV of the
     8  Federal Public Health Service Act.]
     9     "Hearing board."  The State Health Facility Hearing Board
    10  created in the [Department of Justice] Office of General Counsel
    11  under the provisions of this act.
    12     ["Home health care."  The provision of nursing and other
    13  therapeutic services to disabled, injured or sick persons in
    14  their place of residence and other health related services
    15  provided to protect and maintain persons in their own home.
    16     "Major medical equipment."  Medical equipment which is used
    17  for the provision of medical and other health services and which
    18  costs in excess of $150,000, except major medical equipment
    19  acquired by or on behalf of a clinical laboratory to provide
    20  clinical laboratory services if the clinical laboratory is
    21  independent of a physician's office and a hospital and it has
    22  been determined under the Medicare program to meet the
    23  applicable requirements of section 1861(s) of the Federal Social
    24  Security Act. In determining whether medical equipment has a
    25  value in excess of $150,000, the value of studies, surveys,
    26  designs, plans, working drawings, specifications, and other
    27  activities essential to the acquisition of such equipment shall
    28  be included.]
    29     "Interested person" or "person expressing an interest." For
    30  the purposes of Chapter 7 of this act, a member of the public
    19910H1982B4124                  - 6 -

     1  who is to be served by the proposed new health service IN THE     <--
     2  AREA TO BE SERVED BY THE APPLICANT, a health care facility or
     3  health maintenance organization or any health care provider
     4  providing similar services IN THE AREA TO BE SERVED BY THE        <--
     5  APPLICANT, or who has received a certificate of need to provide
     6  services IN THE AREA TO BE SERVED BY THE APPLICANT or who has     <--
     7  formally filed a letter of intent with the Department of Health   <--
     8  WITH THE DEPARTMENT A LETTER OF INTENT TO PROVIDE SIMILAR         <--
     9  SERVICES in the area in which the proposed service is to be
    10  offered or developed, and any third party payor of health
    11  services provided in that area who provides written notice to
    12  the department that the person is interested in a specific
    13  certificate of need application before the department.
    14     "Offer."  Make provision for providing in a regular manner
    15  and on an organized basis [specified] clinically related health
    16  services.
    17     "Patient."  A natural person receiving health care in or from
    18  a health care provider.
    19     "Person."  A natural person, corporation (including
    20  associations, joint stock companies and insurance companies),
    21  partnership, trust, estate, association, the Commonwealth, and
    22  any local governmental unit, authority and agency thereof. [The
    23  term shall include all entities owning or operating a health
    24  care facility or health maintenance organization.
    25     "Persons directly affected."  A person whose proposal for
    26  certificate of need is being reviewed, members of the public who
    27  are to be served by the proposed new institutional health
    28  services, health care facilities and health maintenance
    29  organizations located in the health service area in which the
    30  service is proposed to be offered or developed which provide
    19910H1982B4124                  - 7 -

     1  services similar to the proposed services under review, and
     2  health care facilities and health maintenance organizations
     3  which prior to receipt by the agency of the proposal being
     4  reviewed have formally indicated an intention to provide such
     5  similar service in the future and those agencies, if any, which
     6  establish rates for health care facilities and health
     7  maintenance organizations located in the health systems area in
     8  which the proposed new institutional health service is to be
     9  offered or developed.]
    10     "Policy board."  The [Health Care Policy Board] Health Policy
    11  Board created in the Department of Health under the provisions
    12  of this act.
    13     ["Predevelopment costs."  Expenditures for preparation of
    14  architectural designs, working drawings, plans and
    15  specifications.]
    16     "Public [hearing] meeting."  A meeting open to the public
    17  where any person has an opportunity to [present testimony held
    18  without imposition of a fee] comment on a certificate of need
    19  application or proposed State health services plan amendment.
    20     ["Rehabilitation facility."  An inpatient facility which is
    21  operated for the primary purpose of assisting in the
    22  rehabilitation of disabled persons through an integrated program
    23  of medical and other services which are provided under competent
    24  professional supervision.]
    25     "Secretary."  The Secretary of the Department of Health of
    26  the Commonwealth of Pennsylvania.
    27     ["Statewide Health Coordinating Council" or "SHCC", or
    28  "council."  The council established in compliance with Title XV
    29  of the Federal Public Health Service Act.]
    30     "State health services plan."  A document developed by the
    19910H1982B4124                  - 8 -

     1  Department of Health, after consultation with the policy board
     2  AND APPROVED BY THE GOVERNOR, that is consistent with section     <--
     3  401.3, and that describes in qualitative and quantitative terms   <--
     4  the department's assessment of how the Commonwealth's health
     5  service delivery system is to be organized Statewide and
     6  regionally to meet THAT MEETS the current and projected needs of  <--
     7  its citizens for affordable health care THE COMMONWEALTH'S        <--
     8  CITIZENS. The State health services plan shall contain, in part,
     9  the STANDARDS AND criteria against which certificate of need      <--
    10  applications are reviewed and upon which decisions are based.
    11     "Third party payor."  A person who makes payments on behalf
    12  of patients under compulsion of law or contract who does not
    13  supply care or services as a health care provider or who is
    14  engaged in issuing any policy or contract of individual or group
    15  health insurance or hospital or medical service benefits[, but].
    16  The term shall not include the Federal, State, or any local
    17  government unit, authority, or agency thereof or a health
    18  maintenance organization.
    19  Section 201.  Powers and duties of the department.
    20     The Department of Health shall have the power and its duties
    21  shall be:
    22         [(1)  To act as a single State agency through its staff
    23     and the policy board in serving as the designated sole State
    24     health planning and development agency in accordance with
    25     Titles XV and XVI of the Federal Public Health Service Act.
    26         (2)] (1)  To exercise exclusive jurisdiction over health
    27     care providers[, and jurisdiction over health maintenance
    28     organizations] in accordance with the provisions of this act.
    29         (2)  To issue determinations of reviewability or
    30     nonreviewability of certificate of need proposals.
    19910H1982B4124                  - 9 -

     1         (3)  To issue certificates of need and amended
     2     certificates of need in accordance with the provisions of
     3     this act.
     4         (4)  [With respect to health care facilities, to
     5     investigate, and report to the Auditor General, upon every
     6     application to the Auditor General made by any institution,
     7     corporation or unincorporated association, desiring to give a
     8     mortgage under the provisions of the act of April 29, 1915
     9     (P.L.201, No.112), entitled "An act making mortgages, given
    10     by benevolent, charitable, philanthropic, educational and
    11     eleemosynary institutions, corporations, or unincorporated
    12     associations, for permanent improvements and refunding
    13     purposes, prior liens to the liens of the Commonwealth for
    14     the appropriation of moneys; providing a method for the
    15     giving of such mortgages and fixing the duties of the Auditor
    16     General and Board of Public Charities in connection
    17     therewith."] To withdraw expired certificates of need.
    18         [(5)  To evaluate at least annually its functions and
    19     performance and their economic effectiveness.
    20         (6)  To prepare, in accordance with applicable Federal
    21     law, an inventory of the health care facilities located in
    22     the Commonwealth and evaluate on an on-going basis the
    23     physical condition of such facilities. The inventory and
    24     evaluation shall be periodically reported to every HSA.
    25         (7)] (5)  To require, pursuant to regulation, submission
    26     of periodic reports by providers of health services and other
    27     persons subject to review respecting the development of
    28     proposals subject to review.
    29         [(8)  To research, prepare and after approval by the SHCC
    30     and the Governor publish triennially a State health plan for
    19910H1982B4124                 - 10 -

     1     the Commonwealth based on the various health systems plans.
     2         (9)  To provide coordination with the National Center for
     3     Health Statistics of the activities of the department for the
     4     collection, retrieval, analysis, reporting and publication of
     5     statistical and other information relating to health and
     6     health care and to require health care providers doing
     7     business in the Commonwealth to make statistical and other
     8     reports of information required by Federal law to be
     9     submitted to the National Center for Health Care Statistics;
    10     and to collect such other information as may be appropriate
    11     to determine the appropriate level of facilities and services
    12     for the effective implementation of certification of need
    13     under this act.
    14         (10)  To furnish such staff support and expertise to the
    15     department's policy board as may be needed by them to perform
    16     their responsibilities provided that any refusal of a
    17     substantial request from such board be subject to final
    18     determination by the Governor.]
    19         (6)  Upon consultation with the policy board, to
    20     research, prepare and, after approval by the Governor,
    21     publish, no later than 18 months after the effective date of
    22     this act and annually thereafter, a revised State health
    23     services plan for the Commonwealth as defined under this act.
    24     Until the State health services plan as defined in section
    25     401.4 is adopted, the department shall apply the State health
    26     plan in existence on the effective date of this act, along
    27     with any subsequent updates to that plan.
    28         (7)  To collect AND DISSEMINATE such other information as  <--
    29     may be appropriate to determine the appropriate level of
    30     facilities and services for the effective implementation of
    19910H1982B4124                 - 11 -

     1     certification of need under this act. WHERE SUCH INFORMATION   <--
     2     IS COLLECTED BY ANY OTHER AGENCY OF STATE GOVERNMENT,
     3     DUPLICATION SHALL BE AVOIDED BY COORDINATION OF DATA
     4     COLLECTION ACTIVITIES.
     5         (8)  To furnish such staff support and expertise to the
     6     policy board as may be needed to perform its
     7     responsibilities.
     8         [(11)] (9)  To receive, [docket] log and review all
     9     applications for certificates of need or amendments thereof
    10     and approve or disapprove the same.
    11         [(12)  To determine the Statewide health needs of the
    12     Commonwealth after providing reasonable opportunity for the
    13     submission of written recommendations respecting such needs
    14     by State agencies responsible for planning with regard to
    15     mental health, mental retardation and other developmental
    16     disabilities, and drug and alcohol abuse, as well as other
    17     agencies of State Government designated by the Governor for
    18     the purpose of making such recommendations and after
    19     consulting with SHCC.
    20         (13)] (10)  To minimize the administrative burden on
    21     health care providers by eliminating unnecessary duplication
    22     of financial and operational reports and to the extent
    23     possible coordinating reviews and inspections performed by
    24     Federal, State, local and private agencies.
    25         [(14)] (11)  To adopt and promulgate[, after consultation
    26     with the policy board,] regulations necessary to carry out
    27     the purposes and provisions of this act relating to
    28     certificate of need.
    29         [(15)] (12)  To enforce the rules and regulations
    30     promulgated by the department as provided in this act.
    19910H1982B4124                 - 12 -

     1         [(16)  To consult with the SHCC in the administration of
     2     this act.
     3         (17)] (13)  To provide technical assistance to
     4     individuals and public and private entities in filling out
     5     the necessary forms for the development of projects and
     6     programs.
     7         (14)  To establish and publish in the Pennsylvania
     8     Bulletin a fee schedule for certificate of need applications
     9     and letters of intent in accordance with section 905.2.        <--
    10     902.1.                                                         <--
    11         (15)  To coordinate any data collection activities
    12     necessary for administration of this act so as not to
    13     duplicate unnecessarily the data collection activities of
    14     other Federal and State agencies.
    15         (16)  To determine which clinically related health         <--
    16     services shall remain on, be added to or be deleted from the
    17     list of clinically related health services subject to
    18     certificate of need review.
    19         (16)  TO MODIFY THE LIST OF REVIEWABLE CLINICALLY RELATED  <--
    20     HEALTH SERVICES ESTABLISHED UNDER SECTION 701.
    21  Section 202.  Encouragement of competition and innovation.
    22     The [health systems agencies and the] department shall in
    23  [their] its planning and review activities foster competition
    24  [and] where competition does not have an adverse impact upon      <--
    25  cost, quality or TO PROMOTE COST EFFICIENCY, QUALITY AND access   <--
    26  to care. The department shall encourage cooperative health care
    27  arrangements which focus on the health care needs of a health
    28  planning area and foster the prudent and economical control of
    29  the area's resources. The department shall also encourage
    30  innovations in the financing and delivery systems for clinically
    19910H1982B4124                 - 13 -

     1  related health services that will promote economic behavior by
     2  consumers and providers of clinically related health services
     3  [and] that [lead] leads to appropriate investment in, supply and
     4  use of health services. [To this end, the health systems plan
     5  and the annual implementation plan adopted by the health systems
     6  agencies and State health plan shall include an assessment of
     7  the current and potential scope of competition and market forces
     8  to establish appropriate investment and utilization patterns in
     9  the Commonwealth and shall specify the public and private
    10  actions needed to strengthen these forces. Revisions of the plan
    11  shall assess individual services or types of providers as to
    12  whether the conditions for competition have improved in the
    13  period since the last plan.]
    14     Section 2.  Sections 301, 302, 303, 401, 402, 403, 404 and
    15  405 of the act are repealed.
    16     Section 3.  The act is amended by adding sections to read:
    17  Section 401.1.  Health Policy Board.
    18     (a)  An advisory board is hereby established in the
    19  department, known as the Health Policy Board. The membership of
    20  the board shall consist of:
    21         (1)  The Secretary of Health, or his designee, who shall
    22     act as chairman.
    23         (2)  One representative of hospitals.
    24         (3)  One physician.
    25         (4)  One representative of a long-term care facility.
    26         (5)  Two health care providers not already designated,
    27     one of whom shall be a provider of home health services.
    28         (6)  One representative of Blue Cross or Blue Shield.
    29         (7)  ONE REPRESENTATIVE OF HEALTH MAINTENANCE              <--
    30     ORGANIZATIONS.
    19910H1982B4124                 - 14 -

     1         (7) (8)  One representative of commercial insurance        <--
     2     carriers.
     3         (8) (9)  One representative of business.                   <--
     4         (9) (10)  One representative of organized labor.           <--
     5         (10) (11)  Three consumers.                                <--
     6         (11) (12)  One representative of county or municipal       <--
     7     government.
     8     (b)  ALL MEMBERS SHALL BE APPOINTED TO THE POLICY BOARD BY     <--
     9  THE GOVERNOR AND CONFIRMED BY A MAJORITY VOTE OF THE SENATE. The
    10  Governor shall make all appointments to the policy board within
    11  90 days of the effective date of this act, and the operations of
    12  the policy board shall begin immediately upon its full            <--
    13  appointment. CONFIRMATION OF THE FULL BOARD. THE SECRETARY SHALL  <--
    14  CONVENE THE FIRST MEETING WITHIN 30 DAYS AFTER THE CONFIRMATION
    15  OF THE FULL BOARD.
    16         (1)  Appointments shall be made in a manner that provides
    17     representation of the various geographical regions of this
    18     Commonwealth, INCLUDING THOSE MEDICALLY UNDERSERVED AREAS IN   <--
    19     RURAL AND INNER-CITY LOCATIONS.
    20         (2)  Of the ten 14 members first appointed, three FOUR     <--
    21     shall be appointed for a term of one year, three FIVE for a    <--
    22     term of two years and four FIVE for a term of three years.     <--
    23     Thereafter, appointments shall be made for a term of three
    24     years.
    25         (3)  No appointed member shall serve more than two full
    26     consecutive terms of three years.
    27         (4)  No policy board member, other than the secretary,
    28     may act or attend through a designee or a proxy.
    29     (c)  A simple majority of those members with current
    30  appointments of the policy board shall constitute a quorum for
    19910H1982B4124                 - 15 -

     1  the transaction of any business. The act by the majority of the
     2  members present at any meeting in which there is a quorum shall
     3  be deemed to be an act of the board.
     4     (d)  All meetings of the policy board shall be advertised and
     5  conducted pursuant to the act of July 3, 1986 (P.L.388, No.84),
     6  known as the "Sunshine Act." The board shall meet at least four
     7  times a year and may provide for special meetings as may be
     8  necessary.
     9     (e)  The members of the policy board shall not receive any
    10  compensation for serving as members of the board but shall be
    11  reimbursed at established Commonwealth rates for necessary
    12  expenses incurred in the performance of their duties.
    13  Section 401.2.  Powers and duties of policy board.
    14     The policy board shall exercise all powers necessary and
    15  appropriate to carry out its duties, including the following:
    16         (1)  Advise and assist the department in development and
    17     revision of the State health services plan.
    18         (2)  Annually review a work plan developed by the
    19     department which identifies those provisions of the State
    20     health services plan which must be revised, reconsidered or
    21     developed within the succeeding calendar year.
    22         (3)  Annually review the list of clinically related
    23     health services subject to review developed by the department
    24     pursuant to the provisions of section 701.
    25  Section 401.3.  State health services plan.
    26     The State health services plan shall consist of, at a
    27  minimum:
    28         (1)  An identification of the clinically related health
    29     services necessary to serve the health needs of the
    30     population of this Commonwealth, INCLUDING THOSE MEDICALLY     <--
    19910H1982B4124                 - 16 -

     1     UNDERSERVED AREAS IN RURAL AND INNER-CITY LOCATIONS.
     2         (2)  An analysis of the availability, accessibility and
     3     affordability of the clinically related health services
     4     necessary to meet the health needs of the population of this
     5     Commonwealth.
     6         (3)  Qualitative and quantitative STANDARDS AND criteria   <--
     7     for the review of certificate of need applications by the
     8     department under this act.
     9         (4)  An exceptions process which permits exceptions to be
    10     granted to the standards and criteria in order to reflect
    11     local experience or ensure access or to respond to
    12     circumstances which pose a threat to public health and
    13     safety.
    14     Section 4.  Section 501 of the act is amended to read:
    15  Section 501.  State Health Facility Hearing Board.
    16     There is hereby created the State Health Facility Hearing
    17  Board in the [Department of Justice] Office of General Counsel
    18  which shall consist of [three] FIVE members who shall initially   <--
    19  be appointed for terms of one, two and three years respectively
    20  by the Governor and confirmed by a majority vote of the Senate.
    21  Thereafter, appointments shall be by the Governor for four year
    22  terms AND CONFIRMED BY A MAJORITY VOTE OF THE SENATE. Members     <--
    23  shall be chosen for their familiarity and experience with health
    24  care facilities or for relevant training and experience which
    25  will assist the board to perform its functions. Appointments
    26  shall be made to ensure that at least one of the members shall
    27  be a member of the bar of the Supreme Court of Pennsylvania. No
    28  person shall be chosen who is at the time of appointment an
    29  employee of the Commonwealth or of any health care provider. No
    30  member shall participate in any action or decision concerning
    19910H1982B4124                 - 17 -

     1  any matter in which the member has an economic interest or other
     2  conflict of interest.
     3     Section 5.  Sections 502 and 505 SECTION 502 of the act,       <--
     4  amended July 12, 1980 (P.L.655, No.136), are IS amended to read:  <--
     5  Section 502.  Powers and duties of the hearing board.
     6     (a)  The hearing board shall have the powers and its duties
     7  shall be:
     8         (1)  To hear appeals BY THE APPLICANT OR INTERESTED        <--
     9     PERSONS from departmental decisions on applications for
    10     certificates of need or amendments thereto and from
    11     determinations of reviewability.
    12         (2)  To hear upon petition objections to published
    13     regulations, criteria, or standards of the [health systems
    14     agency or] department as to the policies therein set forth
    15     and where appropriate to request the promulgating agency to
    16     reconsider such policies SET FORTH IN THIS CHAPTER FOR         <--
    17     CERTIFICATE OF NEED.
    18         [(3)  To hear appeals from decisions of the department
    19     which require a person to obtain a certificate of need for
    20     major medical equipment or the acquisition of an existing
    21     health care facility.
    22         (4)] (3)  To fix the place of hearings in the area from
    23     which the application arises in matters relating to
    24     certificate of need.
    25     (b)  Hearings may be held before one or more members of the
    26  board, but action of the board shall be made by majority vote of
    27  the board.
    28     SECTION 6.  SECTION 503 OF THE ACT IS AMENDED TO READ:         <--
    29  SECTION 503.  COUNSEL.
    30     THE [ATTORNEY GENERAL] OFFICE OF GENERAL COUNSEL SHALL
    19910H1982B4124                 - 18 -

     1  APPOINT COUNSEL TO SERVE AND ADVISE THE HEARING BOARD AND SHALL
     2  REPLACE SUCH COUNSEL UPON REQUEST OF THE BOARD.
     3     SECTION 7.  SECTION 505 OF THE ACT, AMENDED JULY 12, 1980
     4  (P.L.655, NO.136), IS AMENDED TO READ:
     5  Section 505.  Hearings before the hearing board.
     6     (a)  All hearings before the hearing board shall be subject
     7  to right of notice, hearing and adjudication in accordance with
     8  2 Pa.C.S. Chaps. 5 and 7, known as the Administrative Agency
     9  Law, and a written record shall be kept of said proceedings and
    10  a copy thereof provided to the parties at cost.
    11     (b)  Persons conducting hearings under this act shall have
    12  the power to subpoena witnesses and documents required for the
    13  hearing, to administer oaths and examine witnesses and receive
    14  evidence in any locality which the hearing body may designate,
    15  having regard to the public convenience and proper discharge of
    16  its functions and duties.
    17     (c)  Notice of hearings before the hearing board shall be
    18  given to the parties at least 21 days in advance of the hearing.
    19  In appeals to the board from the decision of the department on
    20  an application for certificate of need or amendment thereof,
    21  notice of the same shall be published in a newspaper in general
    22  circulation in the [health service area and to the] areas
    23  [affected] where the service is proposed and in the Pennsylvania
    24  Bulletin at least 14 days before the hearing.
    25     (d)  The hearing board shall have the authority to adopt
    26  rules and regulations establishing procedures for the taking of
    27  appeals and other procedural rules and regulations as it deems
    28  advisable AS PROVIDED IN SECTION 601.                             <--
    29     Section 6 8.  Section 506 of the act is amended to read:       <--
    30  Section 506.  Appeals to the hearing board.
    19910H1982B4124                 - 19 -

     1     [(a)  Decisions of the department on an application for a
     2  certificate of need or amendment thereto may be appealed within
     3  30 days by any party or health systems agency who is involved in
     4  the proceeding. The appeal to the hearing board shall be
     5  commenced within 30 days of the appeal and shall be limited to
     6  issues raised by the appellant in the specification of
     7  objections to the decision of the department which shall raise
     8  no further issues not brought to the attention of the health
     9  systems agency or the department, and the board shall entertain
    10  no evidence that the hearing board is satisfied the appellant
    11  was able, by the exercise of reasonable diligence, to have
    12  submitted before the health systems agency and the department.]
    13     (a)  A decision of the department on an application for a
    14  certificate of need or amendment thereto or a determination of
    15  reviewability may be appealed within 30 days of the mailing date
    16  of the decision BY THE APPLICANT OR BY INTERESTED PERSONS WHO     <--
    17  PARTICIPATED IN THE INITIAL REVIEW. The appeal to the hearing
    18  board shall be commenced within 30 days of the filing of the
    19  notice of appeal. The appellant shall raise no issues not
    20  brought to the attention of the department during its review,
    21  and the board shall neither hear nor receive evidence unless it
    22  is satisfied the appellant was unable to submit such evidence
    23  before the department. For purposes of this subsection, an
    24  appeal shall be deemed to commence with the establishment by the
    25  board of a schedule for the filing of briefs by the parties to
    26  the appeal.
    27     (b)  [The] In reaching its decisions, the hearing board shall
    28  be bound by the duly promulgated regulations of the department
    29  and shall [give due deference to] RECOGNIZE the expertise of      <--
    30  [the health systems agencies and] the department [in reaching
    19910H1982B4124                 - 20 -

     1  their decisions]. It shall receive any evidence as to challenges
     2  of the authority of the department or the reasonableness of the
     3  criteria or regulations used in the review of the application
     4  for the sole purpose of creating a record for any subsequent
     5  appeal to court.
     6     [(c)  When any decision of the hearing board is inconsistent
     7  with the recommendations made with respect thereto by a health
     8  systems agency, or with the applicable health systems plan or
     9  annual implementation plan, the hearing board shall submit to
    10  such health systems agency and all parties to the proceeding a
    11  written, detailed statement of the reasons for the
    12  inconsistency.]
    13     (C)  THE HEARING BOARD SHALL SUBMIT TO ALL PARTIES TO THE      <--
    14  PROCEEDING A WRITTEN, DETAILED STATEMENT WHICH SETS FORTH ITS
    15  DECISION AND THE REASONING UPON WHICH THE DECISION IS BASED.
    16     Section 7 9.  Section 507 of the act, repealed in part         <--
    17  October 5, 1980 (P.L.693, No.142), is amended to read:
    18  Section 507.  Appeals and procedures on appeals.
    19     The action of the hearing board may be appealed by any party
    20  [or health systems agency] who is involved in [that proceeding]
    21  the appeal before the board.
    22     Section 8 10.  Section 601 of the act, amended July 12, 1980   <--
    23  (P.L.655, No.136) AND REPEALED IN PART JUNE 25, 1982 (P.L.633,    <--
    24  NO.181), is amended to read:
    25  Section 601.  Promulgation of rules and regulations.
    26     [(a)  All rules and regulations under this act shall be
    27  prepared by the department and submitted for review by the
    28  policy board and the department shall consult with the policy
    29  board before proposed regulations are published.
    30     (b)  All rules and regulations adopted under this act shall
    19910H1982B4124                 - 21 -

     1  provide fair access and due process in all proceedings held to
     2  carry out the provisions of this act and shall not require an
     3  applicant to supply data or information as to other health care
     4  facilities or health maintenance organizations.
     5     (e)  The department shall also publish a notice of the
     6  availability of proposed regulations relating to certificate of
     7  need and any revisions thereof in accordance with the
     8  designation agreement with the Secretary of Health, Education
     9  and Welfare, if any, in at least two newspapers in general
    10  circulation in the Commonwealth, together with a place they may
    11  be examined and copied by interested persons.
    12     (f)  Proposed regulations establishing certificate of need
    13  review procedures and criteria or changes therein shall be
    14  distributed by the department to the SHCC, each health systems
    15  agency operating in the Commonwealth and Statewide health
    16  agencies and organizations and those agencies, if any, which
    17  establish rates for health care facilities and health
    18  maintenance organizations.
    19     (g)  The department shall distribute copies of adopted final
    20  regulations on certificate of need review procedures and
    21  criteria, and any revisions thereof, to persons set forth in
    22  subsection (f) and to the Departments of Health, Education and
    23  Welfare and shall provide such copies to other interested
    24  persons upon request.
    25     (h)  Prior to review by the department of new institutional
    26  health services under this act, the department shall disseminate
    27  to all health care facilities and health maintenance
    28  organizations within the Commonwealth, and shall publish in one
    29  or more newspapers in general circulation within the
    30  Commonwealth a description of coverage of the certificate of
    19910H1982B4124                 - 22 -

     1  need program for review, as determined under regulations, and
     2  any revisions thereof shall be similarly disseminated and
     3  published.]
     4     (A)  The department, in the exercise of its duties under this  <--
     5  act, shall have the power to adopt such regulations as are
     6  necessary to carry out the purposes of this act. Regulations
     7  shall be adopted in conformity with the provisions of the act of
     8  July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth
     9  Documents Law, and the act of June 25, 1982 (P.L.633, No.181),
    10  known as the "Regulatory Review Act."
    11     (B)  ALL RULES AND REGULATIONS ADOPTED UNDER THIS ACT SHALL    <--
    12  PROVIDE FAIR ACCESS AND DUE PROCESS IN ALL PROCEEDINGS HELD TO
    13  CARRY OUT THE PROVISIONS OF THIS ACT AND SHALL NOT REQUIRE AN
    14  APPLICANT TO SUPPLY DATA OR INFORMATION AS TO OTHER HEALTH CARE
    15  FACILITIES OR HEALTH CARE PROVIDERS.
    16     Section 9 11.  Section 603 of the act, amended July 12, 1980   <--
    17  (P.L.655, No.136) and repealed in part October 5, 1980 (P.L.693,
    18  No.142) and December 20, 1982 (P.L.1409, No.326), is amended to
    19  read:
    20  Section 603.  Enforcement of orders relating to certificate of
    21                 need.
    22     (a)  (1)  No certificate of need shall be granted to any
    23     person for a [new institutional] health care facility or
    24     reviewable, clinically related health service unless such
    25     [new institutional] facility or clinically related health
    26     service is found by the department to be needed.
    27         (2)  [Only those new institutional health services which
    28     are granted certificates of need shall be offered or
    29     developed within the Commonwealth by any person.] No person
    30     shall offer or develop a health care facility or reviewable
    19910H1982B4124                 - 23 -

     1     clinically related health service without obtaining a
     2     certificate of need AS REQUIRED BY THIS ACT.                   <--
     3         (3)  [No expenditures in excess of $150,000 in
     4     preparation for the offering or development of a new
     5     institutional health service shall be made by any person
     6     unless a certificate of need for such services or
     7     expenditures has been granted.
     8         (4)]  No binding arrangement or commitment for financing
     9     the offering or development of a [new institutional] health
    10     care facility or reviewable clinically related health service
    11     shall be made by any person unless a certificate of need for
    12     such [new institutional] clinically related health service or
    13     facility[, or the preparation for the offering or development
    14     of the same] has been granted IN ACCORDANCE WITH THIS ACT.     <--
    15     (b)  Orders for which the time of appeal has expired shall be
    16  enforced by the department in summary proceedings or, when
    17  necessary, with the aid of the court.
    18     (c)  No collateral attack on any order, including questions
    19  relating to jurisdiction shall be permitted in the enforcement
    20  proceeding, but such relief may be sought when such relief has
    21  not been barred by the failure to take a timely appeal.
    22     (d)  Any person operating a [new institutional] reviewable
    23  clinically related health service or health care facility within
    24  this Commonwealth for which no certificate of need has been
    25  obtained, after service of a cease and desist order of the
    26  department, or after expiration of the time for appeal of any
    27  final order on appeal, upon conviction thereof, shall be
    28  sentenced to pay a fine of not less than $100 or more than
    29  $1,000 and costs of prosecution. Each day of operating a [new
    30  institutional] clinically related health service or health care
    19910H1982B4124                 - 24 -

     1  facility after issuance of a cease and desist order shall
     2  constitute a separate offense.
     3     (e)  Any person [violating] who violates this act by [a
     4  willful failure] failing to obtain a certificate of need, [or
     5  willfully] by deviating from the provisions of the certificate,
     6  [or] by beginning construction, [or] by providing services, or
     7  by acquiring equipment after the expiration of a certificate of
     8  need shall be subject to a penalty of not less than $100 per day
     9  and not more than $1,000 per day. Each day [after notice to them
    10  of the existence] of EACH such violation shall be considered a    <--
    11  separate offense.
    12     (f)  The department [shall] may seek injunctive relief to
    13  prevent continuing violations of this act. In seeking such
    14  relief, the department need not prove irreparable harm.
    15     (g)  No license to operate a health care facility, [health
    16  maintenance organization, or new institutional] or reviewable
    17  clinically related health service by any person in this
    18  Commonwealth shall be granted and any license issued shall be
    19  void and of no effect as to any facility, organization, service
    20  or part thereof for which a certificate of need is required by
    21  this act and not granted.
    22     [(h)  No person shall acquire major medical equipment which
    23  will not be owned or operated in a health care facility or
    24  acquire an existing health care facility except in accordance
    25  with this act.]
    26     Section 10 12.  Section 701 of the act, amended July 12, 1980  <--
    27  (P.L.655, No.136), is amended to read:
    28  Section 701.  Certificate of need required; [new institutional]
    29                 clinically related health services subject
    30                 to review.
    19910H1982B4124                 - 25 -

     1     [(a)  No person shall offer, develop, construct or otherwise
     2  establish or undertake to establish within the State a new
     3  institutional health service without first obtaining a
     4  certificate of need from the department. For purposes of this
     5  chapter, "new institutional health services" shall include:
     6         (1)  The construction development or other establishment
     7     of a new health care facility or health maintenance
     8     organization.
     9         (2)  Any expenditure by or on behalf of a health care
    10     facility or health maintenance organization in excess of
    11     $150,000 which, under generally accepted accounting
    12     principles consistently applied, is a capital expenditure.
    13     Expenditures for acquisitions of existing health care
    14     facilities and health maintenance organizations shall not be
    15     included unless the notice required by subsection (i) of
    16     section 702 is not filed or the department finds within 30
    17     days of receipt of such notice that the services or bed
    18     capacity of the health care facility will be changed in being
    19     acquired. An acquisition by or on behalf of a health care
    20     facility or health maintenance organization under lease or
    21     comparable arrangement, or through donation, which would have
    22     required review if the acquisition had been by purchase,
    23     shall be deemed a capital expenditure subject to review.
    24         (3)  The obligation of any capital expenditure by or on
    25     behalf of a health care facility which results in the
    26     addition of a health service not provided in or through the
    27     facility in the previous 12 months or which increases the
    28     number of beds (or redistributes beds among various
    29     categories other than levels of care in a nursing home, or
    30     relocates such beds from one physical facility or site to
    19910H1982B4124                 - 26 -

     1     another) by more than ten beds or more than 10% of total bed
     2     capacity, as defined by the regulations, whichever is less,
     3     over a two-year period.
     4         (4)  The addition of a health service which is offered in
     5     or through a health care facility having an operating expense
     6     in excess of the minimum annual operating expense established
     7     in accordance with Title XV of the Federal Public Health
     8     Service Act, and which were not offered on a regular basis in
     9     or through such health care facility or health maintenance
    10     organization within the 12-month period prior to the time
    11     such services would be offered.
    12         (5)  Major medical equipment not owned by or located in a
    13     health care facility which will:
    14             (i)  be used to provide service for inpatients of a
    15         health care facility; or
    16             (ii)  for which a notice was not provided in
    17         accordance with subsection (i) of section 702.
    18     (b)  (1)  Any expenditure by or on behalf of health care
    19     facilities or a health maintenance organization in excess of
    20     $150,000 made in preparation for the offering or development
    21     of a new institutional health service and any binding
    22     arrangement or commitment by either of them for financing the
    23     offering or development of the new institutional health
    24     service shall be subject to review under this chapter.
    25         (2)  Nothing in this paragraph shall preclude the
    26     department from granting a certificate of need which permits
    27     expenditures only for predevelopment activities, but does not
    28     authorize the offering or development of the new
    29     institutional health service with respect to which such
    30     predevelopment activities are proposed.
    19910H1982B4124                 - 27 -

     1     (c)  Notwithstanding the provisions of subsection (a) or (b)
     2  a new institutional health service acquired, owned or operated
     3  by a health maintenance organization and home health care shall
     4  be subject to the provisions of this act only to the extent
     5  required by Federal law.
     6     (d)  As higher minimum expenditures requiring review are set
     7  by the Federal Government, those limits shall immediately apply
     8  in lieu of the minimum expenditure limits set by this act.]
     9     (a)  Any person, including, but not limited to, a health care
    10  facility, health maintenance organization or health care
    11  provider who offers, develops, constructs, renovates, expands or
    12  otherwise establishes or undertakes to establish within the
    13  State a clinically related health service that is included in
    14  the department's list of reviewable services developed under
    15  subsection (d), (e) or (f) SUBSECTIONS (D) AND (E) or a health    <--
    16  care facility as defined in section 103 must obtain a
    17  certificate of need from the department if one or more of the
    18  following factors applies:
    19         (1)  The proposal requires a capital expenditure in
    20     excess of $2,000,000 under generally accepted accounting
    21     principles, consistently applied.
    22         (2)  The proposal involves the establishment of a health
    23     care facility or a reviewable clinically related health
    24     service.
    25         (3)  The proposal increases the number of licensed beds
    26     by more than ten beds or 10%, whichever is less, every two
    27     years.
    28             (i)  If the additional beds are acute-care beds and
    29         are not beds in a distinct-part psychiatric,
    30         rehabilitation or long-term care unit, all licensed beds
    19910H1982B4124                 - 28 -

     1         of the acute-care facility shall be counted in
     2         determining whether the increased number of beds exceeds
     3         10%.
     4             (ii)  If the additional beds are beds in a distinct-
     5         part psychiatric, rehabilitation or long-term care unit
     6         of an acute-care facility, only the beds within that unit
     7         shall be counted in determining whether the increased
     8         number of beds exceeds 10%.
     9             (iii)  If the additional beds are in a free-standing   <--
    10         FREESTANDING psychiatric, rehabilitation or long-term      <--
    11         care facility, all licensed beds of the FREESTANDING       <--
    12         facility shall be counted in determining whether the
    13         increased number of beds exceeds 10%.
    14         (4)  The proposal substantially expands an existing
    15     clinically related health service, as determined by the
    16     department in the State health services plan.
    17     (b)  For the purposes of this act, an expenditure for the
    18  purpose of acquiring an existing health care facility OR          <--
    19  REPLACEMENT OF EQUIPMENT WHERE THERE IS NO CHANGE IN SERVICE
    20  shall not be considered to be a capital expenditure subject to
    21  review. Expenditures for nonclinical activities or services,
    22  such as parking garages, computer systems or refinancing of
    23  debt, and research projects involving premarket approval of new
    24  equipment shall not be subject to review.
    25     (c)  The capital expenditure threshold identified in
    26  subsection (a)(1) may be modified periodically by the department
    27  to reflect any increase in the construction cost or other
    28  factors influencing health care-related capital expenditures.
    29  The department shall publish a modification as a statement of     <--
    30  policy in the Pennsylvania Code. OF THE EXPENDITURE THRESHOLD     <--
    19910H1982B4124                 - 29 -

     1  THROUGH THE REGULATORY REVIEW PROCESS.
     2     (d)  A list of reviewable clinically related health services
     3  shall be issued by the department on an annual basis. PUBLISHED   <--
     4  BY THE DEPARTMENT WITHIN 30 DAYS OF THE EFFECTIVE DATE OF THIS
     5  ACT AND MAY BE MODIFIED BY REGULATION ON AN ANNUAL BASIS.
     6  EXCLUSIVE OF NEW HIGH COST TECHNOLOGY, THE INITIAL LIST
     7  PUBLISHED BY THE DEPARTMENT AS REQUIRED UNDER THIS SUBSECTION
     8  SHALL BE NO MORE EXTENSIVE THAN THOSE SERVICES REVIEWABLE ON THE
     9  EFFECTIVE DATE OF THIS ACT. Criteria for inclusion of reviewable
    10  services shall include, but not be limited to:
    11         (1)  the quality of the service to be offered is likely
    12     to be compromised through insufficient volumes or
    13     utilization;
    14         (2)  the service is dependent upon the availability or OF  <--
    15     scarce natural resources such as human organs;
    16         (3)  the operating costs associated with the service are
    17     reimbursed by major third party payors on a cost
    18     reimbursement basis; or
    19         (4)  the service involves the use of new technology.
    20     (e)  Within 30 days of the effective date of this act, the     <--
    21  department shall publish a list of reviewable clinically related
    22  health services, as defined under this act, which it has
    23  determined will be subject to review pursuant to the provisions
    24  of subsection (d). The list shall apply to all proposals
    25  reviewed by the department on or after the effective date of
    26  this act.
    27     (f)  With the exception of the reviewable list specified in
    28  subsection (e), the list of reviewable services shall be
    29  developed by the department after consultation with the policy
    30  board.
    19910H1982B4124                 - 30 -

     1     (E)  ANY CHANGES TO THE LIST REQUIRED UNDER SUBSECTION (D)     <--
     2  AND PROPOSED BY REGULATION SHALL BE DEVELOPED BY THE DEPARTMENT
     3  AFTER CONSULTATION WITH THE POLICY BOARD.
     4     (g) (F)  A facility providing treatment solely on the basis    <--
     5  of prayer or spiritual means in accordance with the tenets of
     6  any church or religious denomination, or a facility conducted by
     7  a religious organization for the purpose of providing health
     8  care services exclusively to clergy or other persons in a
     9  religious profession who are members of the religious
    10  denomination conducting the facility shall not be considered to
    11  constitute a health service subject to review under this act.
    12     (G)  AS USED IN THIS SECTION, "NEW HIGH COST TECHNOLOGY"       <--
    13  MEANS NEW TECHNOLOGICAL EQUIPMENT WITH AN AGGREGATE PURCHASE
    14  COST OF GREATER THAN $500,000. THE DEPARTMENT SHALL CONSULT WITH
    15  NATIONAL MEDICAL AND SURGICAL SPECIALITY ORGANIZATIONS
    16  RECOGNIZED BY THE AMERICAN BOARD OF MEDICAL SPECIALITIES (ABMS)
    17  AND OTHER NATIONALLY RECOGNIZED SCIENTIFIC RESOURCES IN THE
    18  DETERMINATION OF WHAT CONSTITUTES NEW TECHNOLOGICAL EQUIPMENT.
    19     Section 11 13.  Section 702 of the act, amended July 12, 1980  <--
    20  (P.L.655, No.136) and repealed in part December 20, 1982
    21  (P.L.1409, No.326), is amended to read:
    22  Section 702.  Certificates of need; notice of intent;
    23                 application; issuance.
    24     (a)  Projects [for facilities, services or equipment]
    25  requiring a certificate of need shall, at the earliest possible
    26  time in their planning, be submitted to [the health systems
    27  agency and] the department in a letter of intent in such detail
    28  advising of the scope and nature of the project as required by
    29  regulations. Within 30 days after receipt of the letter of
    30  intent, the department shall inform the applicant providing the
    19910H1982B4124                 - 31 -

     1  letter of intent whether the proposed project is subject to a
     2  certificate of need review or if additional information is
     3  required to make that determination. If the department
     4  determines that the project is subject to a certificate of need
     5  review, the project shall be subject to the remaining provisions
     6  of this act.
     7     (b)  A person desiring to obtain or amend a certificate of
     8  need shall apply IN WRITING to the [local health systems agency,  <--
     9  if any, and to the department simultaneously supplying to them
    10  such information as is required by rules and regulations]
    11  department supplying such information as is required by the
    12  department in writing. The [health systems agency and the]        <--
    13  department shall have [20] 45 60 business days after receipt of   <--
    14  the application within which to [determine whether] assess the
    15  application [is complete] and in which to request specific
    16  further information. If further information is requested, the
    17  [agency requiring the same shall determine whether] department
    18  shall complete its preliminary assessment of the application [is
    19  complete] within [15] 30 45 business days of receipt of the       <--
    20  same. [No information shall be required that is not specified in  <--
    21  the rules and regulations promulgated by the department.]         <--
    22     (c)  Timely notice of the beginning of review of the
    23  application by the [health systems agency shall be sent with the
    24  notice of a completed application, upon the expiration of the
    25  time to determine that an application is complete, or 60 days or
    26  more after the filing of the application upon written demand by
    27  the applicant that review begin, whichever shall first occur,
    28  and the review shall be completed within 60 days of the "date of
    29  notification" unless the applicant agrees in writing to a
    30  specified extension of time for the review by the health systems
    19910H1982B4124                 - 32 -

     1  agency. A health systems agency shall have, at least, 60 days to
     2  complete its review unless the health systems agency waives such
     3  time in writing.] department shall be published after
     4  preliminary assessment of the application is completed by the
     5  department. The "date of notification" of the beginning of
     6  review shall be the date such notice is sent, or the date such
     7  notice is published in the Pennsylvania Bulletin or in a
     8  newspaper of general circulation, whichever is [later] latest.
     9     (d)  The department shall [consider the timely filed
    10  recommendations or objections of the health systems agency in
    11  reviewing the application and shall approve or disapprove the
    12  application, unless there is an agreed extension in writing,
    13  within 30 days from receipt of the health systems agency report
    14  or report on a hearing for reconsideration before the health
    15  systems agency, whichever is later, or upon the expiration of
    16  the time for filing the same. If no action is taken within the
    17  time permitted the department to make its findings, the
    18  applicant may, following expiration of that time period, bring
    19  an action in Court to require the department to approve or
    20  disapprove the application and the court shall promptly issue
    21  such an order upon proof that the period has been exceeded. If
    22  permitted by amendment of the Federal law or regulation any
    23  application upon which action is not taken within the prescribed
    24  time shall be deemed needed and the department shall have no
    25  right of appeal with respect thereto. No new institutional
    26  health service shall be granted a certificate of need unless
    27  found or deemed to be found needed by the department or on
    28  appeal therefrom.] approve or disapprove the application within
    29  90 days from the date of notification of the beginning of the
    30  review. Upon written notice to the applicant, the department is   <--
    19910H1982B4124                 - 33 -

     1  entitled to one extension, not to exceed 30 days, for review of
     2  the application. The applicant must agree in writing to
     3  additional extensions. No health care facility or reviewable
     4  clinically related health service shall be granted a certificate
     5  of need unless found to be needed by the department or on appeal
     6  therefrom. UNLESS THE PERIOD FOR REVIEW IS EXTENDED BY THE        <--
     7  APPLICANT IN WRITING.
     8     (e)  (1)  Certificates of need shall be granted or refused.
     9     They shall not be conditioned upon the applicant changing
    10     other aspects of its facilities or services or requiring the
    11     applicant to meet other specified requirements, [and no such   <--
    12     condition shall be imposed by the department [or the health    <--
    13     systems agency] in granting or refusing approval [or           <--
    14     recommendation] that do not relate to the intent and           <--
    15     objectives of this act. OF CERTIFICATES OF NEED.               <--
    16         (2)  A certificate of need shall state the maximum amount
    17     of expenditures which may be obligated under it and
    18     applicants proceeding with an approved project may not exceed
    19     this level of expenditure except as allowed under the
    20     conditions and procedures established by the department
    21     through regulation.
    22     (f)  (1)  The department shall make written findings which
    23     state the basis for any final decision made by the
    24     department. Such findings shall be [served upon the
    25     applicant, the health systems agency or agencies, and all
    26     parties to the proceedings, and shall be made available to
    27     others upon request.] provided to the applicant and all        <--
    28     persons expressing an interest in the proceedings, and shall
    29     be made available to others upon written request. SERVED UPON  <--
    30     THE APPLICANT AND PROVIDED TO ALL PERSONS EXPRESSING AN
    19910H1982B4124                 - 34 -

     1     INTEREST IN THE PROCEEDINGS AND SHALL BE MADE AVAILABLE TO
     2     OTHERS UPON WRITTEN REQUEST.
     3         (2)  All decisions of the department shall be based
     4     solely on the record. No ex parte contact regarding the
     5     application between any employee of the department who
     6     exercises responsibilities respecting the application and the
     7     applicant, any person acting on behalf of the applicant or
     8     any person opposed to the issuance of the certificate of need
     9     shall occur after the commencement of a hearing on the
    10     application and before a decision is made by the department.
    11     [(g)  When the department makes a decision regarding the
    12  proposed new institutional health service which is inconsistent
    13  with the recommendation made with respect thereto by a health
    14  systems agency, or with the applicable health systems plan or
    15  annual implementation plan, the department shall submit to such
    16  health systems agency and all parties to the proceeding a
    17  written, detailed statement of the reasons for the
    18  inconsistency.
    19     (h)] (g)  Modification of the application at any stage of the
    20  proceeding shall not extend the time limits provided by this act
    21  unless the [health systems agency] department expressly finds
    22  that the modification represents a substantial change in the
    23  character of the application.
    24     (h)  The responsibility of performing certificate of need
    25  review may not be delegated by the department to a local or       <--
    26  regional entity. The department shall consider recommendations
    27  of one or more community-based health services planning
    28  committees whose localities are affected by specific
    29  applications.
    30     [(i)  (1)  Before any person enters into a contractual
    19910H1982B4124                 - 35 -

     1     arrangement to acquire major medical equipment which will not
     2     be owned by or located in a health care facility or before
     3     any person acquires an existing health care facility, such
     4     person shall notify the department of such person's intent to
     5     acquire such equipment or existing health care facility.
     6         (2)  The notice shall be in writing in a form specified
     7     by the department and shall be made at least 30 days before
     8     contractual arrangements are entered into to acquire the
     9     major medical equipment or the existing health care facility.
    10         (3)  In the case of the intended acquisition of major
    11     medical equipment, the notice shall contain information
    12     regarding the use that will be made of the equipment. In the
    13     case of the intended acquisition of an existing health care
    14     facility, the notice shall contain information with regard to
    15     the services to be offered in the facility and its bed
    16     capacity.
    17         (4)  Within 30 days after the receipt of the notice, the
    18     department shall inform the person providing the notice
    19     whether or not the proposed acquisition is a new
    20     institutional health service. If the department determines
    21     that the acquisition will be a new institutional health
    22     service, the acquisition shall be subject to the remaining
    23     provisions of this act.
    24         (5)  A decision of the department that an acquisition
    25     requires a certificate of need may be appealed to the Health
    26     Facility Hearing Board.
    27     (j)  (1)] (i)  The department [shall] may provide [for] THAT   <--
    28  categories of projects [which] shall receive simultaneous and     <--
    29  comparative review. [and periods in which applications for such
    30  projects must be received (and prohibiting submission of
    19910H1982B4124                 - 36 -

     1  applications outside such periods). The time between the
     2  beginning of any such period and the beginning of the next
     3  succeeding period for submission of applications for any
     4  category shall not exceed four months. No project shall be
     5  subject to such submission limitations if a notice of intent to
     6  submit an application for the project is submitted prior to the
     7  publication in the Pennsylvania Bulletin of a notice of proposed
     8  rule making by the department to establish a category subject to
     9  submission limitations.
    10         (2)  The following projects shall be exempt from any of
    11     the above batching provisions set forth in paragraph (1):
    12             (i)  Replacement of equipment not involving a
    13         substantial change in functional capacity or capability.
    14             (ii)  Renovations necessary to meet code requirements
    15         which do not expand the capacity of the facility or
    16         involve the addition of new services.
    17             (iii)  Repairs or reconstruction in the cases of
    18         emergency.
    19             (iv)  Installation of equipment or renovations which
    20         will save energy but which do not expand the capacity of
    21         the facility or involve the addition of a new service.]
    22     Section 12 14.  Section 704 of the act, amended July 12, 1980  <--
    23  (P.L.655, No.136), is amended to read:
    24  Section 704.  [Hearings before the department] Notice of public
    25                 meetings.
    26     [(a)  The function of holding a public hearing is hereby
    27  delegated to the appropriate HSA unless the department and the
    28  HSA agree otherwise in writing in a particular case. If a public
    29  hearing has been held by the health systems agency, no hearing
    30  shall be held by the department in reaching its final decision.
    19910H1982B4124                 - 37 -

     1  If there has been no provision for such hearings before the
     2  health systems agency, the department shall provide notice of a
     3  public hearing and conduct that hearing in accordance with the
     4  provisions of section 703(b).
     5     (b)  Any person may, for good cause shown, request, in
     6  writing, a public hearing for the purpose of reconsideration of
     7  a decision of the department within ten days of service of the
     8  decision of the department. The department shall set forth the
     9  cause for the hearing and the issues to be considered at such
    10  hearing. If such hearing is granted, it shall be held no sooner
    11  than six days and no later than 14 days after such request is
    12  made, and may be limited to the issues submitted for
    13  reconsideration. A summary of the oral testimony shall be made
    14  of the hearing, and copies thereof supplied at cost to the
    15  parties. The department shall affirm or reverse its decision and
    16  submit the same to the parties, the persons requesting the
    17  hearing, and the health systems agency within 14 days of the
    18  conclusion of such hearing. Any change in the decision shall be
    19  supported by the reasons therefor.
    20     (c)  Where hearings are held on more than two days,
    21  consecutive days of hearings and intervening weekends and
    22  holidays shall be excluded in calculating the time permitted for
    23  the department to conduct its review, and if briefs are to be
    24  filed, ten days subsequent to the adjournment of the hearing
    25  shall also be excluded.]
    26     (a)  Notification of the beginning of review of a certificate
    27  of need application shall be published by the department in the
    28  appropriate news media and in the Pennsylvania Bulletin in
    29  accordance with 45 Pa.C.S. Ch. 7 Subch. B (relating to
    30  publication of documents). The notice shall identify the
    19910H1982B4124                 - 38 -

     1  schedule for review, the date by which a public meeting must be
     2  requested, and the manner in which notice will be given of a
     3  meeting, if one is held.
     4     (b)  Interested persons may request a public meeting within
     5  15 days of publication AND THE DEPARTMENT SHALL HOLD SUCH A       <--
     6  MEETING or the department may require a public meeting during
     7  the course of such review. The department shall publish written
     8  notice of the meeting in the appropriate news media and the
     9  Pennsylvania Bulletin at least 14 days prior to the public
    10  meeting date. In the meeting, the applicant and any interested
    11  person providing prior notice to the department shall have the
    12  right to present oral or written comments and relevant evidence
    13  on the application in the manner prescribed by the department.
    14  The department shall prepare a transcript of the oral testimony
    15  presented at the meeting. Meetings shall be held in accordance
    16  with the guidelines and procedures established by the department
    17  and published in the Pennsylvania Code as a statement of policy.
    18  The department may require the applicant to provide copies of
    19  the application to any interested person making a request for
    20  such application, at the expense of the interested person.
    21     (c)  The applicant may, for good cause shown, request in
    22  writing a public meeting HEARING for the purpose of               <--
    23  reconsideration of a decision of the department within ten days
    24  of service of the decision of the department. The department
    25  shall treat the request in accordance with the provisions of 1
    26  Pa. Code 35.241 (relating to application for rehearing or
    27  reconsideration). The department shall set forth the cause for
    28  the meeting HEARING and the issues to be considered at such       <--
    29  meeting. If such meeting HEARING. IF SUCH HEARING is granted, it  <--
    30  shall be held no sooner than six days and no later than 30 days
    19910H1982B4124                 - 39 -

     1  after the notice to grant such a meeting HEARING, and shall be    <--
     2  limited to the issues submitted for reconsideration. A
     3  transcript shall be made of the meeting HEARING AND A COPY OF     <--
     4  THE TRANSCRIPT SHALL BE PROVIDED AT COST TO THE APPLICANT. The
     5  department shall affirm or reverse its decision and submit the
     6  same to the person requesting the meeting HEARING within 30 days  <--
     7  of the conclusion of such meeting HEARING. Any change in the      <--
     8  decision shall be supported by the reasons for the change.
     9     (d)  Where meetings HEARINGS under subsection (b) are held on  <--
    10  more than two days, consecutive days of meetings HEARINGS and     <--
    11  intervening weekends and holidays shall be excluded in
    12  calculating the time permitted for the department to conduct its
    13  review, and if briefs are to be filed, ten days subsequent to
    14  the adjournment of the meeting HEARING shall also be excluded.    <--
    15     Section 13.  Section 706 of the act is amended to read:        <--
    16     SECTION 15.  SECTIONS 705 AND 706 OF THE ACT ARE AMENDED TO    <--
    17  READ:
    18  SECTION 705.  GOOD CAUSE.
    19     GOOD CAUSE SHALL BE DEEMED TO HAVE BEEN SHOWN IF:
    20         (1)  THERE IS SIGNIFICANT, RELEVANT INFORMATION NOT
    21     PREVIOUSLY CONSIDERED;
    22         (2)  THERE IS SIGNIFICANT CHANGE IN FACTORS OR
    23     CIRCUMSTANCES RELIED ON IN MAKING THE DECISION;
    24         (3)  THERE HAS BEEN MATERIAL FAILURE TO COMPLY WITH THE
    25     PROCEDURAL REQUIREMENTS OF THIS ACT; OR
    26         [(4)  THE DEPARTMENT DETERMINES THAT THERE IS GOOD CAUSE
    27     SHOWN FOR SOME OTHER REASON.
    28     IF GOOD CAUSE AS TO ITEMS (1) AND (2) ABOVE IS FOUND BY THE
    29  DEPARTMENT, THE APPLICATION SHALL BE REMANDED FOR CONSIDERATION
    30  WITH RESPECT TO SUCH FACTORS TO THE HEALTH SYSTEMS AGENCY FOR
    19910H1982B4124                 - 40 -

     1  CONSIDERATION OF THE SAME. THE TIME, NOT TO EXCEED 45 DAYS, THAT
     2  THE APPLICATION IS BEFORE THE HEALTH SYSTEMS AGENCY FOR SUCH
     3  CONSIDERATION SHALL NOT BE COUNTED IN DETERMINING THE TIME
     4  WITHIN WHICH THE DEPARTMENT SHALL TAKE ACTION ON THE
     5  APPLICATION.]
     6         (4)  GOOD CAUSE IS OTHERWISE FOUND TO EXIST.
     7  Section 706.  Information during review.
     8     During the course of review [the health systems agency and]
     9  the department shall upon written request of any person, set      <--
    10  forth the status, any findings [then] made in the proceeding and
    11  other appropriate information requested. THE DEPARTMENT MAY       <--
    12  REQUIRE SUCH REQUESTS TO BE IN WRITING.
    13     Section 14 16.  Section 707 of the act, amended July 12, 1980  <--
    14  (P.L.655, No.136), is amended to read:
    15  Section 707.  Criteria for review of applications for
    16                 certificates of need or amendments.
    17     [(a)  An application for a certificate of need shall be
    18  recommended, approved, and issued when the application
    19  substantially meets the requirements listed below; provided that
    20  each decision, except in circumstances which pose a threat to
    21  public health, shall be consistent with the State health plan:
    22         (1)  The relationship of the application with the
    23     applicable health systems plan and annual implementation plan
    24     has been considered.
    25         (2)  The services are compatible to the long-range
    26     development plan (if any) of the applicant.
    27         (3)  There is a need by the population served or to be
    28     served by the services.
    29         (4)  There is no appropriate, less costly, or more
    30     effective alternative methods of providing the services
    19910H1982B4124                 - 41 -

     1     available.
     2         (5)  The service or facility is economically feasible,
     3     considering anticipated volume of care, the capability of the
     4     service area to meet reasonable charges for the service or
     5     facility and the availability of financing.
     6         (6)  The proposed service or facility is financially
     7     feasible both on an intermediate and long-term basis and the
     8     impact on cost of and charges for providing services by the
     9     applicant is appropriate.
    10         (7)  The proposed service or facility is compatible with
    11     the existing health care system in the area.
    12         (8)  The service or facility is justified by community
    13     need and within the financial capabilities of the institution
    14     both on an intermediate and long-term basis and will not have
    15     an inappropriate, adverse impact on the overall cost of
    16     providing health services in the area.
    17         (9)  There are available resources (including health
    18     manpower, management personnel, and funds for capital and
    19     operating needs) to the applicant for the provision of the
    20     services proposed to be provided, and there is no greater
    21     need for alternative uses for such resources for the
    22     provision of other health services. The effect on the
    23     clinical needs of health professional training programs in
    24     the medical service area, the extent to which health
    25     professional schools in the medical service area will have
    26     access to the services for training purposes and the extent
    27     to which the proposed service will be accessible to all
    28     residents of the area to be served by such services have been
    29     considered.
    30         (10)  The proposed service or facility will have
    19910H1982B4124                 - 42 -

     1     available to it appropriate ancillary and support services
     2     and an appropriate organizational relationship to such
     3     services.
     4         (11)  The proposed services are consistent with the
     5     special needs and circumstances of those entities which
     6     provide services or resources both within and without the
     7     health service area in which the proposed services are to be
     8     located, including medical and other health professional
     9     schools, multidisciplinary clinics, and specialty centers.
    10         (12)  The special needs and circumstances of health
    11     maintenance organizations shall be considered to the extent
    12     required by Federal law and regulation now or hereafter
    13     enacted or adopted.
    14         (13)  The proposed services are not incompatible with any
    15     biomedical or behavioral research projects designed for
    16     national need for which local conditions offer special
    17     advantages.
    18         (14)  Consideration of the need and availability in the
    19     community for services and facilities for allopathic and
    20     osteopathic physicians and their patients; and the religious
    21     orientation of the facility and the religious needs of the
    22     community to be served. This provision is not intended to
    23     create duplicative systems of care.
    24         (15)  The factors which affect the effect of competition
    25     on the supply of health services being reviewed with
    26     particular reference to the existence and the capacity of
    27     market conditions in advancing the purposes of quality
    28     assurance, cost containment and responsiveness to consumer
    29     preferences and the existence and capacity of utilization
    30     review programs and other public and private cost control
    19910H1982B4124                 - 43 -

     1     measures to give effect to consumer preferences and to
     2     establish appropriate incentives for capital allocations have
     3     been considered.
     4         (16)  Improvements or innovations in the financing and
     5     delivery of health services which foster competition and
     6     serve to promote quality assurance, cost effectiveness and
     7     responsiveness to consumer preferences have been given
     8     preference.
     9         (17)  The efficiency and appropriateness of the use of
    10     existing services and facilities similar to those proposed
    11     has been considered.
    12         (18)  In the case of existing services for facilities,
    13     the quality of care provided by services or facilities in the
    14     past has been considered.
    15         (19)  The contribution of the proposed new institutional
    16     health service in meeting the health related needs of members
    17     of medically underserved groups has been considered in
    18     written findings.
    19         (20)  The special circumstances of applications with
    20     respect to the need for conserving energy have been
    21     considered.
    22     (b)  If the application is for a proposed service or facility
    23  which includes a construction project, a certificate of need
    24  shall be recommended, approved and issued when the provisions of
    25  subsection (a) are satisfied, and:
    26         (1)  the costs and methods of proposed construction
    27     including the costs and methods of energy provision are
    28     appropriate; and
    29         (2)  the impact on the costs of providing health services
    30     by the applicant resulting from the construction is found to
    19910H1982B4124                 - 44 -

     1     be appropriate and the impact on the costs and charges to the
     2     public of providing health services by other persons is found
     3     to be not inappropriate.
     4     (c)  Whenever new institutional health services for
     5  inpatients are proposed, a finding shall be made in writing by
     6  the reviewing authority:
     7         (1)  as to the efficiency and appropriateness of the
     8     existing use of the inpatient facilities similar to those
     9     proposed;
    10         (2)  as to the capital and operating costs, efficiency
    11     and appropriateness of the proposed new service and its
    12     potential impact on patient charges;
    13         (3)  that less costly alternatives which are more
    14     efficient and more appropriate to such inpatient service are
    15     not available and the development of such alternatives has
    16     been studied and found not practicable;
    17         (4)  that existing inpatient facilities providing
    18     inpatient services similar to those proposed are being used
    19     in an appropriate and efficient manner;
    20         (5)  that in the case of new construction, alternatives
    21     to new construction such as modernization or sharing
    22     arrangements have been considered and have been implemented
    23     to the maximum extent practicable;
    24         (6)  that patients will experience serious problems in
    25     terms of cost, availability, accessibility or such other
    26     problems as are identified by the reviewing agency in
    27     obtaining inpatient care of the type proposed in the absence
    28     of the proposed new service; and
    29         (7)  that in the case of a proposal for the addition of
    30     beds for the provision of skilled nursing or intermediate
    19910H1982B4124                 - 45 -

     1     care services, the addition will be consistent with the plans
     2     of the agency, if any, that is responsible for the provision
     3     and financing of long-term care services.
     4  A certificate of need shall be issued for inpatient services
     5  when the provisions of subsections (a) and (b) are satisfied and
     6  the findings of this subsection can be made.]
     7     (a)  An application for certificate of need shall be
     8  considered for approval when THE DEPARTMENT DETERMINES THAT the   <--
     9  application substantially meets the requirements listed below:
    10         (1)  There is need by the population served or to be
    11     served by the proposed service or facility.
    12         (2)  The proposed service or facility will provide care
    13     consistent with quality standards established by the State
    14     health services plan.
    15         (3)  The proposed service or facility will meet the
    16     standards identified in the State health services plan for
    17     access to care by medically underserved groups, including
    18     individuals eligible for medical assistance and persons
    19     without health insurance.
    20     (b)  The department shall issue a certificate of need if the
    21  project substantially meets the criteria of subsection (a)(1),
    22  (2) and (3) and meets the additional criteria listed below,       <--
    23  provided that the project is consistent with the State health
    24  services plan UNLESS THE DEPARTMENT CAN DEMONSTRATE:              <--
    25         (1)  There is no A more appropriate, less costly or more   <--
    26     effective alternative method of providing the proposed
    27     services.
    28         (2)  The service or facility is NOT financially and        <--
    29     economically feasible considering anticipated volume of care
    30     and the availability of reasonable financing BASED ON          <--
    19910H1982B4124                 - 46 -

     1     INFORMATION RECEIVED FROM THE APPLICANT AND OTHER SOURCES
     2     DURING THE REVIEW PROCESS.
     3         (3)  The proposed service or facility will not have an     <--
     4     inappropriate, adverse impact on the overall level of health
     5     care expenditures in the area.
     6     [(d)] (c)  Notwithstanding the provisions of subsections
     7  (a)[, (b) and (c)] and (b), applications for projects described
     8  in subsection [(e)] (d) shall be approved unless the department
     9  finds that the facility or service with respect to such
    10  expenditure as proposed is not needed or that the project is not
    11  consistent with the State health services plan. An application
    12  made under this subsection shall be approved only to the extent
    13  that the department determines it is required to overcome the
    14  conditions described in subsection [(e)] (d).
    15     [(e)] (d)  Subject to the provisions of subsection [(d)] (c),
    16  subsections (a)[, (b) and (c)] and (b) shall not apply to
    17  capital expenditures required to:
    18         (1)  [Eliminate] eliminate or prevent imminent safety
    19     hazards as a result of violations of safety codes or
    20     regulations[.];
    21         (2)  [Comply] comply with State licensure standards[.];
    22     or
    23         (3)  [Comply] comply with accreditation standards,
    24     compliance with which is required to receive reimbursement or
    25     payments under Title XVIII or XIX of the Federal Social
    26     Security Act.
    27     Section 15 17.  Section 708 of the act is repealed.            <--
    28     Section 16 18.  The act is amended by adding a section to      <--
    29  read:
    30  Section 708.1.  Monitoring certificate of need; expiration of a
    19910H1982B4124                 - 47 -

     1                 certificate of need.
     2     A certificate of need or an amendment to it shall expire two
     3  years from the date issued unless substantially implemented, as
     4  defined by regulation. The department may grant extensions for a
     5  specified time upon request of the applicant and upon a showing
     6  that the applicant has, or is making, a good faith effort to
     7  substantially implement the project. An expired certificate of
     8  need shall be invalid, and no person may proceed to undertake
     9  any activity pursuant to it for which a certificate of need or
    10  amendment is required. The applicant shall report to the
    11  department, on forms prescribed by the department, the status of
    12  the project until such time as the project is licensed or
    13  operational, if no license is required.
    14     Section 17 19.  Section 709 of the act is amended to read:     <--
    15  Section 709.  Emergencies.
    16     Notwithstanding any other provision of this act, [and
    17  pursuant to an agreement with the United States Department of
    18  Health, Education and Welfare,] in the event of an emergency the
    19  department may suspend the foregoing application process and
    20  permit such steps to be taken as may be required to meet the
    21  emergency including the replacement of equipment or facilities.
    22     Section 18 20.  Sections 711, 802.1, 804, 806, 807, 808, 809,  <--
    23  810, 811 and 812 of the act, amended or added July 12, 1980
    24  (P.L.655, No.136), are amended to read:
    25  Section 711.  Review of activities.
    26     (a)  The department [and each health systems agency] shall
    27  prepare and publish not less frequently than annually reports of
    28  reviews conducted under this act, including a statement on the
    29  status of each such review and of reviews completed by [them,
    30  including statements of the finding and] it and statements of
    19910H1982B4124                 - 48 -

     1  the decisions made in the course of such reviews since the last
     2  report. The department [and each health systems agency] shall
     3  also make available to the general public for examination at
     4  reasonable times of the business day all applications reviewed
     5  by [them and all written materials on file at the agency
     6  pertinent to such review.] it. The department shall publish as a  <--
     7  statement of policy in the Pennsylvania Code, its procedure for
     8  making records available to the public. SUCH REPORTS AND          <--
     9  APPLICATIONS SHALL BE CONSIDERED PUBLIC RECORDS.
    10     (b)  The [department in its] department's report which shall
    11  be submitted to the members of the Health and Welfare Committees
    12  of the Senate and House of Representatives shall contain the
    13  following information [classified by health system areas]:
    14         (1)  The volume of applications submitted, by project
    15     type, their dollar value, and the numbers and costs
    16     associated with those approved and those not approved.
    17         [(2)  An estimate of the operating cost impact of the
    18     approved projects.
    19         (3)  The average time for review, by project type.
    20         (4)] (2)  The assessment of the extent of competition in   <--
    21     specific service sectors that guided decisions.
    22         [(5)] (3)  A detailed description of projects involving    <--
    23     nontraditional or innovative service delivery methods or
    24     organizational arrangements and the decisions made on each of
    25     these projects.]                                               <--
    26         (2) (4)  The average time for review, by level of review.  <--
    27         (5)  THE FEES COLLECTED FOR REVIEWS AND THE COST OF THE    <--
    28     PROGRAM.
    29  Section 802.1.  Definitions.
    30     The following words and phrases when used in this chapter
    19910H1982B4124                 - 49 -

     1  shall have, unless the context clearly indicates otherwise, the
     2  meanings given them in this section:
     3     "Ambulatory surgical facility."  A facility or portion
     4  thereof not located upon the premises of a hospital which
     5  provides specialty or multispecialty outpatient surgical
     6  treatment. Ambulatory surgical facility does not include
     7  individual or group practice offices of private physicians or
     8  dentists, unless such offices have a distinct part used solely
     9  for outpatient surgical treatment on a regular and organized
    10  basis. For the purposes of this provision, outpatient surgical
    11  treatment means surgical treatment to patients who do not
    12  require hospitalization, but who require constant medical
    13  supervision following the surgical procedure performed.
    14     "Birth center."  A facility not part of a hospital which
    15  provides maternity care to childbearing families not requiring
    16  hospitalization. A birth center provides a home-like atmosphere
    17  for maternity care, including prenatal labor delivery and
    18  postpartum care related to medically uncomplicated pregnancies.
    19     "Health care facility."  [A general, tuberculosis,] For
    20  purposes of Chapter 8, a health care facility includes, but is
    21  not limited to, a general, chronic disease or other type of
    22  hospital, [a skilled nursing facility,] a home health care
    23  agency, [an intermediate care] a long-term care nursing
    24  facility, cancer treatment centers using radiation therapy on an
    25  ambulatory basis, an ambulatory surgical facility, a birth
    26  center regardless of whether such health care facility is
    27  operated for profit, nonprofit or by an agency of the
    28  Commonwealth or local government. The department shall have the
    29  authority to license other health care facilities as may be
    30  necessary due to emergence of new modes of health care. When the
    19910H1982B4124                 - 50 -

     1  department so finds, it shall publish its intention to license a
     2  particular type of health care facility in the Pennsylvania
     3  Bulletin IN ACCORDANCE WITH THE ACT OF JUNE 25, 1982 (P.L.633,    <--
     4  NO.181), KNOWN AS THE "REGULATORY REVIEW ACT." The term health
     5  care facility shall not include an office used primarily for the
     6  private practice of [medicine, osteopathy, optometry,
     7  chiropractic, podiatry or dentistry,] a health care
     8  practitioner, nor a program which renders treatment or care for   <--
     9  drug or alcohol abuse or dependence unless located within a
    10  health facility, nor a facility providing treatment solely on
    11  the basis of prayer or spiritual means. [A mental retardation
    12  facility is not a health care facility except to the extent that
    13  it provides skilled nursing care.] The term health care facility
    14  shall not apply to a facility which is conducted by a religious
    15  organization for the purpose of providing health care services
    16  exclusively to clergymen or other persons in a religious
    17  profession who are members of a religious denomination.
    18     ["Health care provider" or "provider."  An individual, a
    19  trust or estate, a partnership, a corporation (including
    20  associations, joint stock companies and insurance companies),
    21  the Commonwealth, or a political subdivision or instrumentality
    22  (including a municipal corporation or authority) thereof, that
    23  operates a health care facility.]
    24     "Home health care agency."  An organization or part thereof
    25  staffed and equipped to provide nursing and at least one
    26  therapeutic service to persons who are disabled, aged, injured
    27  or sick [persons] in their place of residence. The agency may
    28  also provide other health-related services to protect and
    29  maintain persons in their own home.
    30     "Hospital."  An institution having an organized medical staff
    19910H1982B4124                 - 51 -

     1  [which is primarily engaged in] established for the purpose of
     2  providing to inpatients, by or under the supervision of
     3  physicians, diagnostic and therapeutic services for the care of
     4  persons who are injured, disabled, pregnant, diseased [or], sick
     5  or mentally ill [persons], or rehabilitation services for the
     6  rehabilitation of persons who are injured, disabled, pregnant,
     7  diseased [or], sick or mentally ill [persons]. The term includes
     8  facilities for the diagnosis and treatment of disorders within
     9  the scope of specific medical specialties, but not facilities
    10  caring exclusively for the mentally ill.
    11     ["Intermediate care facility."  An institution which provides
    12  on a regular basis health-related care and services to resident
    13  individuals who do not require the degree of care and treatment
    14  which a hospital or skilled nursing facility is designed to
    15  provide, but who because of their mental or physical condition
    16  require health-related care and services above the level of room
    17  and board. Intermediate care facilities exclusively for the
    18  mentally retarded commonly called ICF/MR shall not be considered
    19  intermediate care facilities for the purpose of this act and
    20  shall be licensed by the Department of Public Welfare.
    21     "Skilled nursing facility."  Any facility or part of a
    22  facility in which professionally supervised nursing care and
    23  related medical and other health services are provided for a
    24  period exceeding 24 hours for two or more individuals who are
    25  not in need of hospitalization and are not relatives of the
    26  nursing home administrator, but who because of age, illness,
    27  disease, injury convalescence or physical or mental infirmity
    28  need such care.]
    29     "Long-term care nursing facility."  A facility that provides
    30  either skilled or intermediate nursing care or both levels of
    19910H1982B4124                 - 52 -

     1  care to two or more patients, who are unrelated to the licensee,
     2  for a period exceeding 24 hours. Intermediate care facilities
     3  exclusively for the mentally retarded commonly called ICF/MR
     4  shall not be considered long-term care nursing facilities for
     5  the purpose of this act and shall be licensed by the Department
     6  of Public Welfare.
     7  Section 804.  Administration.
     8     (a)  Discrimination prohibited.--Except as otherwise provided
     9  by law, no provider shall discriminate in the operation of a
    10  health care facility on the basis of race, creed, sex or
    11  national origin.
    12     (b)  Prevention of duplication.--In carrying out the
    13  provisions of this chapter and other statutes of this
    14  Commonwealth relating to health care facilities, the department
    15  and other departments and agencies of the State and local
    16  governments shall make every reasonable effort to prevent
    17  duplication of inspections and examinations. [Within 12 months
    18  of the enactment date of this chapter, the department shall
    19  establish subject to the approval of the Governor a method of
    20  scheduling inspections whereby inspections of health care
    21  facilities by all departments and agencies of the Commonwealth
    22  shall be coordinated insofar as reasonably possible. Within 24
    23  months of the enactment date of this chapter, the department
    24  shall make the dates of expiration of Medicaid and Medicare
    25  certification coincide with licensure and shall subsequently]
    26  The department may make the dates of licensure expiration
    27  coincide with medical assistance and Medicare certification or
    28  applicable nationally recognized accrediting agencies
    29  accreditation and shall combine these surveys and inspections
    30  where practical.
    19910H1982B4124                 - 53 -

     1     (c)  Health care innovation.--The department shall administer
     2  this chapter so as to encourage innovation and experimentation
     3  in health care and health care facilities consistent with the
     4  provisions of this chapter and shall encourage contributions of
     5  private funds and services to health care facilities.
     6     (d)  Reports.--The department shall report annually to the
     7  General Assembly on the effectiveness of the licensing and
     8  enforcement of this chapter. Such report shall include
     9  appropriate data according to nature of facility relating to
    10  provisional licenses issued, nature of violations of
    11  regulations, and number of facilities against which sanctions
    12  had to be taken. [and the number of facilities with pending
    13  serious violations. The report shall also include
    14  recommendations for statutory and administrative changes which
    15  the department deems desirable to enhance the quality of care
    16  provided by health care facilities.]
    17  Section 806.  Licensure.
    18     (a)  License required.--No person shall maintain or operate a
    19  health care facility without first having obtained a license
    20  therefor issued by the department. No health care facility can
    21  be a provider of medical assistance services unless it is
    22  licensed by the department and certified as a medical assistance
    23  provider.
    24     (b)  Development of regulations.--In developing rules and
    25  regulations for licensure the department shall take into
    26  consideration [conditions for participation in government and]
    27  Federal certification standards and the standards of other third
    28  party [payments] payors for health care services and [the
    29  standards of the Joint Commission on Accreditation of Hospitals,
    30  the Committee on Hospital Accreditation of the American
    19910H1982B4124                 - 54 -

     1  Osteopathic Association and such other accrediting bodies] such
     2  nationally recognized accrediting agencies as the department may
     3  find appropriate.
     4     (c)  Fire and emergency standards.--Notwithstanding any other
     5  provision of law other than standards required [by the Federal
     6  Government as a condition of participation] for Federal
     7  certification by that type of health care facility in the
     8  Medicare or Medicaid program, no health care facility shall be
     9  required to satisfy any regulation relating to fire or similar
    10  emergency circumstance more stringent than those required of
    11  hospitals by the Joint Commission on Accreditation of
    12  [Hospitals] Health Organizations OR SUCH NATIONALLY RECOGNIZED    <--
    13  ACCREDITING AGENCIES AS THE DEPARTMENT MAY FIND APPROPRIATE and
    14  the department shall adopt and enforce the appropriate
    15  standards.
    16     (d)  Home health care agency regulations.--In developing
    17  rules and regulations for licensure of home health care agencies
    18  the department shall take into consideration the standards of
    19  [the National Association of Home Health Agencies, National
    20  League of Nursing, Joint Commission on the Accreditation of
    21  Hospitals and National Council for Homemakers, Home Health Aides
    22  and other accrediting bodies] nationally recognized accrediting
    23  agencies as the department may find appropriate. Home health
    24  care agencies certified as providers by the department to the
    25  Federal Government for purposes of the Medicare program shall be
    26  deemed to comply with and satisfy the department's regulations
    27  governing home health care agencies.
    28     (e)  Public disclosure.--[Rules and regulations of the
    29  department shall require:
    30         (1)  The licensee to provide to the appropriate health
    19910H1982B4124                 - 55 -

     1     systems agency information that the health systems agency is
     2     required to collect pursuant to section 1513(b) of the
     3     Federal National Health Planning and Resources Development
     4     Act.
     5         (2)  The licensee to make available to the public upon
     6     request the licensee's current daily cost reimbursement under
     7     Blue Cross, medical assistance and Medicare as well as the
     8     average daily charge to other insured and noninsured private
     9     pay patients.
    10         (3)  Disclosure of the persons owning 5% or more of the
    11     licensee as well as the licensee's officers and members of
    12     the board of directors.] The department shall require
    13     disclosure of the persons owning 5% or more of the health
    14     care facility as well as the health care facility's officers
    15     and members of the board of directors.
    16     (F)  AMBULATORY SURGICAL FACILITIES STANDARDS.--WITHIN ONE     <--
    17  YEAR OF THE EFFECTIVE DATE OF THIS ACT, TO THE EXTENT POSSIBLE,
    18  THE DEPARTMENT SHALL PUBLISH IN THE PENNSYLVANIA BULLETIN
    19  PROPOSED REGULATIONS ESTABLISHING REVISED STANDARDS FOR
    20  LICENSURE OF AMBULATORY SURGICAL FACILITIES. SUCH STANDARDS
    21  SHALL PROVIDE FOR SEPARATE LICENSURE CRITERIA FOR OFFICE-BASED
    22  SURGICAL FACILITIES AND FOR COMPREHENSIVE FREESTANDING
    23  AMBULATORY SURGICAL FACILITIES, INCLUDING, BUT NOT LIMITED TO:
    24         (1)  FIRE AND SAFETY STANDARDS;
    25         (2)  PERSONNEL AND EQUIPMENT REQUIREMENTS; AND
    26         (3)  QUALITY ASSURANCE PROCEDURES.
    27  THE PURPOSE OF SUCH CRITERIA SHALL BE TO ASSURE QUALITY CARE
    28  DELIVERY IN SAID FACILITIES. UNTIL SUCH TIME THE REVISED
    29  REGULATIONS ARE ADOPTED, THE EXISTING RULES AND REGULATIONS
    30  GOVERNING THE LICENSURE OF AMBULATORY SURGICAL FACILITIES SHALL
    19910H1982B4124                 - 56 -

     1  APPLY.
     2  Section 807.  Application for license.
     3     (a)  Submission to department.--Any person desiring to secure
     4  a license to maintain and operate a health care facility shall
     5  submit an application therefor to the department upon forms
     6  prepared and furnished by it, containing such information as the
     7  department considers necessary to determine that the health care
     8  provider and the health care facility meet the requirements of
     9  licensure under the provisions of this act and the rules and
    10  regulations relating to licensure. Application for renewal of a
    11  license shall be made upon forms prepared and furnished by the
    12  department in accordance with the rules and regulations of the
    13  department.
    14     (b)  Fees.--Application for a license or for renewal of a
    15  license shall be accompanied by [a fee of $50 plus $2 for each
    16  inpatient bed in excess of 75 beds.] the following fees:
    17         (1)  Regular or Special License:
    18                 Home Health Agency                        $250.00
    19                 Ambulatory Surgical Facility               250.00
    20                 Birth Center                                70.00
    21                 Long-Term Care Nursing Facility            250.00
    22                     Plus Per Each Inpatient Bed              4.00  <--
    23                     PLUS PER EACH LONG TERM CARE BED IN EXCESS OF  <--
    24                         75 BEDS                              2.00
    25                 Hospital
    26                     Every Two Years                        500.00
    27                     Plus Per Each Inpatient Bed
    28                         Every Two Years                      4.00
    29                 Other Health Care Facility                $100.00
    30         (2)  Provisional License All Facilities:
    19910H1982B4124                 - 57 -

     1                 Provisional I                             $400.00
     2                     Plus Per Each Inpatient Bed              4.00
     3                 Provisional II                             600.00
     4                     Plus Per Each Inpatient Bed              6.00
     5                 Provisional III                            800.00
     6                     Plus Per Each Inpatient Bed              8.00
     7                 Provisional IV                           1,000.00
     8                     Plus Per Each Inpatient Bed             10.00
     9     (c)  Bond.--The department, by regulations, may require new
    10  applicants for a license to post a bond.
    11  Section 808.  Issuance of license.
    12     (a)  Standards.--The department shall issue a license to a
    13  health care provider when it is satisfied that the following
    14  standards have been met:
    15         (1)  that the health care provider is a responsible
    16     person;
    17         (2)  that the place to be used as a health care facility
    18     is adequately constructed, equipped, maintained and operated
    19     to safely and efficiently render the services offered;
    20         (3)  that the health care facility provides safe and
    21     efficient services which are adequate for the care, treatment
    22     and comfort of the patients or residents of such facility;
    23         (4)  that there is substantial compliance with the rules
    24     and regulations adopted by the department pursuant to this
    25     act; and
    26         (5)  that a certificate of need has been issued if one is
    27     necessary.
    28     (b)  Separate and limited licenses.--Separate licenses shall
    29  not be required for different services within a single health
    30  care facility except that home health care or [skilled or
    19910H1982B4124                 - 58 -

     1  intermediate] long-term nursing care will require separate
     2  licenses. [A single facility providing both skilled and
     3  intermediate care shall need only one separate license to cover
     4  those services.] A limited license, excluding from its terms a
     5  particular service or portion of a health care facility, may be
     6  issued under the provisions of this act.
     7     (c)  [Modification of license] Addition of services.--When
     8  the certificate of need for a facility is amended as to services
     9  which can be offered, the department shall issue [a modified] an
    10  appropriate license for those services upon demonstration of
    11  compliance with licensure requirements.
    12  Section 809.  Term and content of license.
    13     (a)  Contents.--All licenses issued by the department under
    14  this chapter shall:
    15         (1)  [with the exception of provisional licenses for
    16     health care facilities other than hospitals expire one year
    17     from the date on which issued and for hospitals expire two
    18     years from the date on which issued unless renewed;] be
    19     issued for a specified length of time as follows, including
    20     the provision of section 804(b):
    21             (i)  all health care facilities, other than
    22         hospitals, for a period of one year, and for hospitals
    23         for a period of two years with the expiration date to be
    24         the last day of the month in which license is issued;
    25             (ii)  provisional licenses for the length of time to
    26         be determined by the department upon issuance of the
    27         provisional license;
    28         (2)  be on a form prescribed by the department;
    29         (3)  not be transferable except upon prior written
    30     approval of the department;
    19910H1982B4124                 - 59 -

     1         (4)  be issued only to the health care provider and for
     2     the health care facility or facilities named in the
     3     application;
     4         (5)  specify the maximum number of beds, if any, to be
     5     used for the care of patients in the facility at any one
     6     time; and
     7         (6)  specify [whether the license has been granted to the
     8     health care facility as a whole or, if not, shall specify
     9     those portions of or services offered by the facility which
    10     have been excluded from the terms of the license] limitations
    11     which have been placed on the facility.
    12     (b)  Posting.--The license shall at all times be posted in a
    13  conspicuous place on the provider's premises.
    14     (c)  Visitation.--Whenever practicable, the department shall
    15  make its visitations and other reviews necessary for licensure
    16  contemporaneously with similar visitations and other reviews
    17  necessary for provider certification in the Medicare and medical
    18  assistance programs and the department shall endeavor to avoid
    19  duplication of effort by the department and providers in the
    20  certificate of need, medical assistance and Medicare provider
    21  certification and licensure procedures. This shall not preclude
    22  the department from unannounced visits.
    23     (d)  Use of beds in excess of maximum.--Except in case of
    24  extreme emergency, no license shall permit the use of beds for
    25  inpatient use in the licensed facility in excess of the maximum
    26  number set forth in the license without first obtaining written
    27  permission from the department: Provided, That during the period
    28  of a license, a health care facility may without the prior
    29  approval of the department increase the total number of beds by
    30  not more than ten beds or 10% of the total bed capacity,
    19910H1982B4124                 - 60 -

     1  whichever is less.
     2  Section 810.  Reliance on accrediting agencies and Federal
     3                 Government.
     4     (a)  Reports of other agencies.--After a provider has been
     5  licensed or approved to operate a health care facility for at
     6  least [three] TWO years under this or prior acts, none of which   <--
     7  has been pursuant to a provisional license, the department may
     8  rely on the reports of the Federal Government or nationally
     9  recognized accrediting agencies [if the government or agency
    10  standards are substantially] to the extent those standards are
    11  determined by the department to be similar to regulations of the
    12  department and if the provider agrees to:
    13         (1)  direct the agency or government to provide a copy of
    14     its findings to the department; and
    15         (2)  permit the department to inspect those areas or
    16     programs of the health care facility not covered by the
    17     agency or government inspection or where the agency or
    18     government report discloses more than a minimal violation of
    19     department regulations.
    20     (b)  Coordination of inspections.--[All State agencies and
    21  all divisions or units of such agencies which conduct regular
    22  on-site inspections of health care facilities shall, within 120
    23  days of the enactment of this amendatory act, advise the
    24  department of the type of inspections they conduct, the time
    25  required to inspect and the frequency of such inspections. In
    26  accordance with the plan approved by the Governor, the] The
    27  department shall coordinate, to the extent possible, inspections
    28  by State agencies other than the department [and shall advise
    29  other agencies which inspections shall be made only after
    30  written notice to the department and may require other State
    19910H1982B4124                 - 61 -

     1  agencies to make their inspections simultaneously with the
     2  inspection by the department]. Nothing herein shall be
     3  interpreted to preclude the department from any follow-up
     4  inspection of a health care facility in which deficiencies were
     5  found in the original inspections or more frequent inspections
     6  of health care facilities that received provisional licenses.
     7     (c)  Right of inspection preserved.--This section shall not
     8  be construed to be a limitation on the department's right of
     9  inspection otherwise permitted by section 813.
    10  Section 811.  Reasons for revocation or nonrenewal of license.
    11     The department may refuse to renew a license or may suspend
    12  or revoke or limit a license for all or any portion of a health
    13  care facility, or for any particular service offered by a
    14  facility, or may suspend admissions for any of the following
    15  reasons:
    16         (1)  A serious violation of provisions of this act or of
    17     the regulations for licensure issued pursuant to this act or
    18     of Federal laws and regulations. For the purpose of this
    19     paragraph, a serious violation is one which poses a
    20     significant threat to the health [of patients] or safety of
    21     patients or residents.
    22         (2)  Failure of a licensee to submit a plan with a
    23     reasonable timetable to correct deficiencies.
    24         (3)  The existence of a cyclical pattern of deficiencies
    25     over a period of two or more years.
    26         (4)  Failure, by the holder of a provisional license, to
    27     correct deficiencies in accordance with a timetable submitted
    28     by the applicant and agreed upon by the department.
    29         (5)  Fraud or deceit in obtaining or attempting to obtain
    30     a license.
    19910H1982B4124                 - 62 -

     1         (6)  Lending, borrowing or using the license of another,
     2     or in any way knowingly aiding or abetting the improper
     3     granting of a license.
     4         (7)  Incompetence, negligence or misconduct in operating
     5     the health care facility or in providing services to
     6     patients.
     7         (8)  Mistreating or abusing individuals cared for by the
     8     health care facility.
     9         (9)  Serious violation of the laws relating to medical
    10     assistance or Medicare reimbursement.
    11         (10)  Serious violation of other applicable Federal or
    12     State laws.
    13  Section 812.  Provisional license.
    14     [When there are numerous deficiencies or a serious specific
    15  deficiency in compliance with applicable statutes, ordinances or
    16  regulations, and when the department finds:
    17         (1)  the applicant is taking appropriate steps to correct
    18     the deficiencies in accordance with a timetable submitted by
    19     the applicant and agreed upon by the department; and
    20         (2)  there is no cyclical pattern of deficiencies over a
    21     period of two or more years, then the department may issue a
    22     provisional license for a specified period of not more than
    23     six months which may be renewed three times at the discretion
    24     of the department.
    25  Upon overall compliance, a regular license shall be issued.]
    26     When there are numerous deficiencies or a serious specific
    27  deficiency in compliance with applicable statutes, ordinances or
    28  regulations, and when the department finds the applicant is
    29  taking appropriate steps to correct the deficiencies in
    30  accordance with a timetable submitted by the applicant and
    19910H1982B4124                 - 63 -

     1  agreed upon by the department and there is no cyclical pattern
     2  of deficiencies over a period of two or more years, then the
     3  department may issue a provisional license for a specified
     4  period of not more than six months which may be renewed three
     5  times at the discretion of the department.
     6  Upon overall SUBSTANTIAL compliance, including payment of any     <--
     7  fines levied pursuant to section 817(d), a regular license shall
     8  be issued.
     9     Section 19 21.  Section 814 of the act, added July 12, 1980    <--
    10  (P.L.655, No.136) and repealed in part December 20, 1982
    11  (P.L.1409, No.326), is amended to read:
    12  Section 814.  Provider violations.
    13     (a)  Notice of violations.--Whenever the department shall
    14  upon inspection, investigation or complaint find a violation of
    15  this chapter or regulations adopted by the department pursuant
    16  to this chapter or pursuant to Federal law, it shall give
    17  written notice thereof specifying the violation or violations
    18  found to the health care provider. Such notice shall require the
    19  health care provider to take action or to submit a plan of
    20  correction which shall bring the health care facility into
    21  compliance with applicable law or regulation within a specified
    22  time. The plan of correction must be submitted within 30 days of
    23  receipt of the written notice or sooner if directed to do so by
    24  the department. The department may ban admissions or revoke a
    25  license before a plan of correction is submitted whenever
    26  deficiencies pose a significant threat to the health or safety
    27  of patients or residents.
    28     (b)  Appointment of [master] temporary management.--When the
    29  health care provider has failed to bring the facility into
    30  compliance within the time [so] specified by the department, or
    19910H1982B4124                 - 64 -

     1  when the facility has demonstrated [a pattern of episodes of
     2  noncompliance alternating with compliance over a period of at
     3  least two years] that it is unwilling or unable to achieve
     4  compliance, such as would convince a reasonable person that any
     5  correction of violations would be unlikely to be maintained, the
     6  department may petition the Commonwealth Court or the Court of
     7  Common Pleas of the county in which the facility is located to
     8  appoint [a master] temporary management designated as qualified
     9  by the department to assume operation of the facility at the
    10  facility's expense [for a specified period of time or until all
    11  violations are corrected and all applicable laws and regulations
    12  are complied with, or] to assure the health and safety of the
    13  facility's patients or residents until improvements are made to
    14  bring the facility into compliance with the laws and regulations
    15  for licensure or until there is an orderly closure of the
    16  facility. In the alternative, the department in its discretion
    17  may proceed in accordance with this chapter.
    18     Section 20 22.  Sections 817 and 820 of the act, added July    <--
    19  12, 1980 (P.L.655, No.136), are amended to read:
    20  Section 817.  Actions against violations of law, rules and
    21                 regulations.
    22     (a)  Actions brought by department.--Whenever any person,
    23  regardless of whether such person is a licensee, has violated
    24  any of the provisions of this chapter or the regulations issued
    25  pursuant thereto, the department may maintain an action in the
    26  name of the Commonwealth for an injunction or other process
    27  restraining or prohibiting such person from engaging in such
    28  activity.
    29     (b)  Civil penalty.--Any person, regardless of whether such
    30  person is a licensee, who has committed a violation of any of
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     1  the provisions of this chapter or of any rule or regulation
     2  issued pursuant thereto, including failure to correct a serious
     3  licensure violation (as defined by regulation) within the time
     4  specified in a deficiency citation, may be assessed a civil
     5  penalty by an order of the department of up to [$100 for each
     6  day that such violation continues.] $500 for each deficiency for
     7  each day that each deficiency continues. Civil penalties shall
     8  be collected from the date the facility receives notice of the
     9  violation until the department confirms correction of such
    10  violation.
    11     (c)  Funds collected as a result of the assessment of a civil
    12  penalty.--When all other sources of funding have been exhausted,
    13  the department shall apply funds collected as a result of the
    14  assessment of a civil penalty to the protection of the health or
    15  property of patients or residents of the health care facility.
    16  Funds may be utilized to:
    17         (1)  Provide payment to temporary management.
    18         (2)  Maintain the operation of the health care facility
    19     pending correction of deficiencies or closure.
    20         (3)  In the case of a long-term care nursing facility,
    21     relocate residents to other licensed health care facilities.
    22         (4)  In the case of a long-term care nursing facility,
    23     reimburse residents for personal funds lost. MISAPPROPRIATED   <--
    24     PERSONAL NEEDS ALLOWANCE.
    25     (d)  Facility closure for threat to health or safety.--
    26  Whenever the department determines that deficiencies pose an
    27  immediate and serious threat to the health or safety of the
    28  patients or residents of the health care facility, the
    29  department may direct the closure of the facility and the
    30  transfer of patients or residents to other licensed health care
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     1  facilities.
     2  Section 820.  Existing rules and regulations.
     3     (a)  Continuation of rules and regulations.--Existing rules
     4  and regulations applicable to health care facilities not clearly
     5  inconsistent with the provisions of this chapter, shall remain
     6  in effect until replaced, revised or amended. [In developing
     7  regulations, the department shall give priority to developing
     8  minimum standards for home health agencies and other health care
     9  facilities not previously subject to regulation.] Sections 103.2
    10  and 103.6 of Title 28 of the Pennsylvania Code are repealed.
    11     (b)  Expiration of licenses.--All health care providers
    12  licensed[, approved or certified] on the effective date of this
    13  chapter to establish, maintain or operate a health care facility
    14  shall be licensed for the period remaining on the license[,
    15  certification or approval. If a health care facility has a
    16  license, approval or equivalent certification without an
    17  expiration date, it shall be deemed for the purposes of this
    18  section to expire one year after its date of issuance]. At the
    19  expiration of the existing license [certification or approval],
    20  the health care facility shall be subject to licensure pursuant
    21  to this chapter.
    22     Section 21 23.  The act is amended by adding sections to       <--
    23  read:
    24  Section 902.1.  Fees for review of certificate of need
    25                     applications.
    26     (a)  The department shall charge a fee of $150 for each
    27  letter of intent filed. The letter of intent fee shall be
    28  deducted from the total application fee required under
    29  subsection (b) if an application is submitted on the project
    30  proposed in the letter of intent.
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     1     (b)  For each application the department shall charge a fee,
     2  payable on submission of an application. The fee shall not be
     3  less than $500 plus up to $3 per $1,000 of proposed capital
     4  expenditure and shall not be more than $20,000.
     5     (c)  The department shall publish a fee schedule in the
     6  Pennsylvania Bulletin which shall explain the procedure for
     7  filing fees.
     8     (d)  All fees payable under this section are due upon the
     9  date of filing a letter of intent or application. If a person
    10  fails to file the appropriate fee, all time frames required of
    11  the department under this act, with respect to review of a
    12  letter of intent or application, are suspended until the
    13  applicable fee is paid in full.
    14  Section 904.1.  Sunset.
    15     The authority, obligations and duties arising under Chapter 7
    16  of this act and all other provisions of this act pertaining to
    17  certificates of need shall terminate five FOUR years after the    <--
    18  effective date of this section. TWELVE MONTHS PRIOR TO THIS       <--
    19  EXPIRATION, THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE SHALL
    20  COMMENCE A REVIEW OF THE IMPACT OF THE CERTIFICATE OF NEED
    21  PROGRAM ON QUALITY, ACCESS AND COST OF HEALTH CARE SERVICES
    22  REVIEWABLE UNDER THIS ACT.
    23  SECTION 904.2.  SEVERABILITY.
    24     THE PROVISIONS OF THIS ACT ARE SEVERABLE. IF ANY PROVISION OF
    25  THIS ACT OR ITS APPLICATION TO ANY PERSON OR CIRCUMSTANCE IS
    26  HELD INVALID, THE INVALIDITY SHALL NOT AFFECT OTHER PROVISIONS
    27  OR APPLICATIONS OF THIS ACT WHICH CAN BE GIVEN EFFECT WITHOUT
    28  THE INVALID PROVISION OR APPLICATION.
    29     Section 22 24.  Any cancer treatment center required to be     <--
    30  licensed pursuant to the provisions of this act shall obtain the
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     1  required license within two years of the effective date of this
     2  act.
     3     Section 23 25.  (a)  Articles IX and X of the act of June 13,  <--
     4  1967 (P.L.31, No.21), known as the Public Welfare Code, are
     5  repealed insofar as they relate to health care facilities as
     6  defined in Chapter 8.
     7     (b)  All other acts and parts of acts are repealed insofar as
     8  they are inconsistent with this act.
     9     Section 24 26.  This act shall take effect in 60 days          <--
    10  IMMEDIATELY.                                                      <--














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