PRINTER'S NO. 898
No. 840 Session of 1981
INTRODUCED BY RICHARDSON, BARBER, HARPER, WHITE, J. D. WILLIAMS,
EVANS, OLIVER, RIEGER, McMONAGLE AND DEAL, MARCH 10, 1981
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, MARCH 10, 1981
AN ACT
1 Relating to health care, prescribing the powers and duties of
2 the Department of Health, establishing and providing the
3 powers and duties of the Statewide Health Coordinating
4 Council and Health Facilities Appeals Board; providing for
5 certification of need of health care providers; prescribing
6 penalties; and making appropriations.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 CHAPTER 1
10 PRELIMINARY PROVISIONS
11 Section 101. Short title.
12 This act shall be known and may be cited as the "Health
13 Planning and Cost Containment Act."
14 Section 102. Purposes.
15 The General Assembly finds as a fact that the continuously
16 increasing cost of health care services threatens the health and
17 welfare of citizens of the Commonwealth by impairing the ability
18 of citizens to obtain high quality, economical and readily
19 available health care. The General Assembly also finds that the
1 health and welfare of Pennsylvania citizens will be enhanced by
2 the orderly and economical distribution of health care
3 resources. To achieve such distribution of resources requires
4 governmental intervention to insure the development and
5 organization of a coordinated and comprehensive system of health
6 care. The goal of such a system is to enhance the public health
7 and welfare of insuring that needed health care is available to
8 everyone at a fair and reasonable cost; that the health care
9 delivery system is responsive and adequate to the needs of all
10 citizens; that health care services and facilities are most
11 efficiently and effectively used; that consumers have meaningful
12 input regarding the delivery of care; that health care cost
13 inflation is limited; that unnecessary duplication,
14 fragmentation, and dehumanization of health care services and
15 facilities are minimized; that health care services and
16 facilities provide quality health care, that relevant
17 information on the cost and quality of health care is disclosed
18 to the public to the maximum extent possible; and, that all
19 citizens receive humane, courteous and dignified treatment. In
20 developing such a coordinated and comprehensive health care
21 system, it is the policy of the Commonwealth to foster
22 responsible private operation and ownership of health care
23 facilities, to encourage innovation and continuous development
24 of improved methods of health care and to aid efficient and
25 effective planning using local agencies.
26 Section 103. Definitions.
27 The following words and phrases when used in this act shall
28 have, unless the context clearly indicates otherwise, the
29 meanings given to them in this section:
30 "Ambulatory surgical facility." A facility, not a part of a
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1 hospital, which provides surgical treatment to patients not
2 requiring hospitalization. Such term does not include the
3 offices of private physicians or dentists, whether for
4 individual or group practice.
5 "Board." The Health Facilities Appeals Board established by
6 this act.
7 "Consumer." A natural person who potentially will use the
8 services of a provider of health care: Provided, however, That
9 the consumer is not any of the following: a provider of health
10 care; an administrator or employee of a provider of health care;
11 an administrator or employee of a third party payor as defined
12 in this act; a member of the governing body of a provider or a
13 third party payor, unless serving on such board as a bona fide
14 consumer representative; a person receiving one-tenth or more,
15 or whose spouse receives one-tenth or more of his gross annual
16 income from a provider, a third party payor or a major vendor of
17 goods or services to providers or third party payors; or a
18 member of the healing arts.
19 "Council." The Statewide Health Coordinating Council
20 established pursuant to Title XV of the Federal Public Health
21 Service Act.
22 "Department." The Pennsylvania Department of Health.
23 "Health care facility." A general, tuberculosis, mental,
24 chronic disease or other type of hospital; a long term care
25 facility, a kidney disease treatment center, radiology
26 laboratory; an ambulatory surgical facility; or a home health
27 agency (for purposes of licensure only); regardless of whether
28 such health care facility is operated for profit, not for profit
29 or by an agency of State or local government: Provided, That the
30 term "health care facility" shall not include an office used
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1 exclusively for the private practice of medicine, osteopathy,
2 optometry, chiropractic, podiatry or dentistry, nor a program
3 which renders treatment or care for drug or alcohol abuse or
4 dependence unless located within a health care facility, nor a
5 facility providing treatment solely on the basis of prayer or
6 spiritual means. A State mental retardation facility is not a
7 health care facility except to the extent that it provides
8 nursing care in a long term care setting. It shall not include a
9 facility which is conducted by a religious organization for the
10 purpose of providing health care services exclusively to
11 clergymen or other persons in a religious profession who are
12 members of a religious denomination.
13 "Health care provider." A person who operates a health care
14 facility.
15 "Health maintenance organization." A public or private
16 organization, organized under the laws of any state, which:
17 (1) provides or otherwise makes available to enrolled
18 participants health care services, including at least the
19 following basic health care services: usual physician
20 services, hospitalization, laboratory, x-ray, emergency and
21 preventive services, and out-of-area coverage;
22 (2) is compensated (except for copayments) for the
23 provision of the basic health care services listed in
24 paragraph (1) to enrolled participants on a predetermined
25 periodic rate basis; and
26 (3) provides physicians' services primarily:
27 (i) directly through physicians who are either
28 employees or partners of such organization; or
29 (ii) through arrangements with individual physicians
30 or one or more groups of physicians (organized on a group
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1 practice or individual practice basis).
2 "Health systems agency." Any regional health planning agency
3 designated pursuant to Federal Public Law 93-641 or a successor
4 agency designated under Federal or State law.
5 "HEW." The United States Department of Health, Education and
6 Welfare.
7 "Home health agency." An organization or part thereof
8 staffed and equipped to provide nursing and at least one
9 therapeutic service to disabled, aged, injured or sick persons
10 in their place of residence. The agency may also provide other
11 health-related services to protect and maintain persons in their
12 own home.
13 "Hospital." An institution which is primarily engaged in
14 providing to inpatients, by or under the supervision of
15 physicians, diagnostic and therapeutic services for the care of
16 injured, disabled, sick or mentally ill persons, or
17 rehabilitation services for the rehabilitation of injured,
18 disabled or sick persons. The term includes facilities for the
19 diagnosis and treatment of disorders within the scope of
20 specific medical specialties.
21 "Institutional health services." Health services provided in
22 or through health care facilities or health maintenance
23 organizations and includes the entities in or through which such
24 services are provided.
25 "Kidney disease treatment center." A facility, including a
26 freestanding hemodialysis unit, providing treatment to persons
27 with end-stage renal disease.
28 "Long term care facility." An institution or a distinct part
29 thereof which is primarily engaged in providing to inpatients
30 skilled or intermediate nursing care and related services,
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1 health-related care and services, or rehabilitation services for
2 persons who are disabled, retarded, aged, injured or sick and
3 require such services but do not require the degree of care and
4 treatment which a hospital provides.
5 "Person." An individual, a trust or estate, a partnership, a
6 corporation (including associations, joint stock companies and
7 insurance companies), the Commonwealth, or a political
8 subdivision or instrumentality (including a municipal
9 corporation) thereof.
10 "Radiology laboratory." A facility primarily engaged in the
11 diagnosis or treatment of disease or other physical conditions
12 by means of electromagnetic, nuclear, laser or high energy
13 radiation equipment.
14 "Secretary." The Secretary of the Department of Health of
15 the Commonwealth of Pennsylvania.
16 "Third party payor."
17 (1) any stock or mutual insurance company, association
18 or exchange issuing or servicing any hospitalization,
19 accident and health, or major medical insurance policy;
20 (2) any hospital plan corporation, as defined in 40
21 Pa.C.S. § 6101 (relating to definitions);
22 (3) any professional health service corporation, as
23 defined in 40 Pa.C.S. § 6101;
24 (4) the Commonwealth, with respect to payments made to
25 health care providers pursuant to Title XIX of the Federal
26 Social Security Act; or
27 (5) any person, partnership, corporation, joint venture
28 or other association which administers the provision of
29 health care services on a prepaid basis; or which administers
30 reimbursements for the provision of health care services
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1 delivered by any health care provider or health care facility
2 subject to the provisions of this act.
3 "To develop." When used in connection with health services
4 or facilities, means to undertake those activities which on
5 their completion will result in the offer of a new institutional
6 health service or the incurring of a financial obligation in
7 relation to the offering of such a service.
8 "To offer." When used in connection with health services or
9 facilities, means that the health care facility or health
10 maintenance organization holds itself out as capable of
11 providing, or as having the means for the provision of,
12 specified health services.
13 CHAPTER 2
14 POWERS AND DUTIES OF THE DEPARTMENT
15 Section 201. Powers and duties of the department.
16 The department shall have the power and its duties shall be:
17 (1) To serve as the State Health Planning and
18 Development Agency in accordance with Title XV of the Federal
19 Public Health Service Act and to serve as the designated
20 planning agency in accordance with the provisions of section
21 1122 of the Federal Social Security Act.
22 (2) To issue and amend certificates of need whenever it
23 finds that the applicants qualify therefor under the
24 provisions of this act.
25 (3) To designate health systems agencies for purposes of
26 certification of need and to contract with such agencies for
27 conducting project reviews and other appropriate activities.
28 (4) To publish annually a report on the regulation of
29 health care facilities in Pennsylvania.
30 (5) To conduct either directly or by contracting with
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1 other qualified and experienced persons, inspections,
2 investigations, audits, inquiries and hearings on matters
3 relating to health care facilities or services and such
4 related matters as may be necessary to carry out the purposes
5 and provisions of this act.
6 (6) To provide coordination with the National Center for
7 Health Statistics of the activities of the department for the
8 collection, retrieval, analysis, reporting and publication of
9 statistical and other information related to health and
10 health care and to require providers of health care doing
11 business in the Commonwealth to make statistical and other
12 reports of such information to the department for health
13 planning, research and statistical purposes.
14 (7) To research and prepare annually a preliminary State
15 health plan for Pennsylvania and publish a State health plan
16 for Pennsylvania after its adoption by the council.
17 (8) With respect to health care facilities, to
18 investigate and report to the Auditor General, upon every
19 application to the Auditor General made by any institution,
20 corporation, or unincorporated association, desiring to give
21 a mortgage under the provisions of the act of April 29, 1915
22 (P.L.201, No.112), entitled "An act making mortgages, given
23 by benevolent, charitable, philanthropic, educational, and
24 eleemosynary institutions, corporations, or unincorporated
25 associations, for permanent improvements and refunding
26 purposes, prior liens to the liens of the Commonwealth for
27 the appropriation of moneys; providing a method for the
28 giving of such mortgages, and fixing the duties of the
29 Auditor General and Board of Public Charities in connection
30 therewith."
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1 (9) To furnish such staff support and expertise to the
2 council as may be needed by it to perform its functions.
3 (10) To minimize the administrative burden on health
4 care providers by eliminating unnecessary duplication of
5 financial and operational reports and to the extent possible
6 coordinating reviews and inspections performed by Federal,
7 State, local and private agencies.
8 (11) To set reasonable fees to be paid by persons
9 subject to the act in connection with applications, renewals,
10 filings and petitions authorized by the act.
11 (12) To adopt after consultation with the council other
12 regulations necessary to carry out the purposes and
13 provisions of this act.
14 (13) With the approval of the Governor, to act as the
15 sole agency of the State when applying for, receiving and
16 using Federal funds for the financing in whole or in part
17 programs in fields in which the department has
18 responsibility.
19 (14) To implement a system of monitoring and evaluation
20 by the department of the efficiency and effectiveness of its
21 own operations and to report the results annually to the
22 Governor and the General Assembly.
23 (15) To enforce the rules and regulations adopted by the
24 department.
25 (16) To hold formal hearings in accordance with
26 Subchapter A of Chapter 5 of Title 2 of the Pennsylvania
27 Consolidated Statutes (relating to practice and procedure of
28 Commonwealth agencies) and informal hearings, conferences and
29 other oral proceedings and receive written comments, sworn
30 affidavits and other writings on matters for decision by the
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1 department.
2 (17) To exercise all other powers which are reasonably
3 related to the effective implementation of this act.
4 Section 202. Opportunity to be heard.
5 Opportunity to be heard may be granted by means of hearings
6 conducted in accordance with Subchapter A of Chapter 5 of Title
7 2 of the Pennsylvania Consolidated Statutes (relating to
8 practice and procedure of Commonwealth agencies) or by such
9 other procedure as the department may by regulation establish,
10 and which satisfy the due process requirements of the
11 Constitutions of the United States and the Commonwealth of
12 Pennsylvania.
13 Section 203. Enforcement of orders; penalties.
14 (a) Orders of the department from which the time for appeal
15 has expired may be enforced by the department in the court of
16 common pleas of the county in which the health care facility is
17 located or in the Commonwealth Court.
18 (b) Any person operating a health care facility within the
19 Commonwealth in violation of the provisions of the act or by the
20 regulations or orders of the department issued thereunder shall
21 upon conviction thereof be sentenced to pay a fine of not more
22 than $500, and costs of prosecution. Each day of operating a
23 health care facility in violation thereof shall constitute a
24 separate offense.
25 Section 204. Approval of certain contracts.
26 No contract between a hospital plan corporation or a
27 professional health service corporation and a health care
28 facility shall be valid or binding unless it has been approved
29 by the department: Provided, however, That the Insurance
30 Commissioner shall retain the sole power and authority to
19810H0840B0898 - 10 -
1 approve or disapprove premium rates and rate structures of
2 hospital plan corporations and professional health service
3 corporations.
4 CHAPTER 3
5 STATEWIDE HEALTH COORDINATING COUNCIL
6 AND HEALTH FACILITIES APPEALS BOARD
7 Section 301. Statewide Health Coordinating Council.
8 (a) The Statewide Health Coordinating Council shall be
9 constituted and have all those powers and perform those duties
10 set forth in Title XV of the Federal Public Health Service Act.
11 (b) The council may advise the department with regard to the
12 department's rules and regulations relating to licensure,
13 certificate of need, uniform systems of accounting and
14 reporting, disclosure of contracts or other financial
15 arrangements between hospital providers and hospital based
16 medical specialists and with regard to other regulations
17 reasonably necessary to carry out the purposes and provisions of
18 this act, the act of July 19, 1979 (P.L.130, No.48), known as
19 the "Health Care Facilities Act," the act of , 19 ,
20 known as the "Health Facilities Financial Reporting Act," and
21 the act of 19, , known as the "Hospital Rate Approval
22 Act."
23 (c) The council may periodically review the provisions of
24 Federal and State law and regulations as well as State practices
25 relating to certification of need and advise the secretary
26 concerning the administration of certification of need in the
27 Commonwealth.
28 Section 302. Council; compensation; expenses.
29 Each member of the council shall be paid traveling and other
30 necessary expenses, and compensation at a rate to be determined
19810H0840B0898 - 11 -
1 by the Executive Board. The council may appoint such committees
2 or advisory groups as it deems necessary to advise and assist it
3 in its activities.
4 Section 303. Health Facilities Appeals Board; establishment;
5 composition.
6 (a) There is hereby created the Health Facilities Appeals
7 Board within the Office of General Counsel.
8 (b) The board shall consist of three persons, who shall
9 devote such time to the work as the board's duties may require,
10 appointed by the Governor, by and with the advice and consent of
11 a majority of all the members of the Senate.
12 (c) The members of the board shall serve for a term of six
13 years or until their respective successors are appointed and
14 qualified; however, of the persons initially appointed, the
15 chairperson shall serve for a term of six years and the other
16 two members for terms of four years and two years, respectively.
17 (d) At least two members of the board shall be consumers,
18 one of whom shall be an attorney admitted to practice before the
19 Pennsylvania Supreme Court and who shall serve as chairperson.
20 (e) The members of the board shall be compensated at a rate
21 to be determined by the Office of General Counsel with the
22 approval of the Executive Board.
23 Section 304. Health Facilities Appeals Board; powers and
24 duties; procedures.
25 (a) The Health Facilities Appeals Board shall have the power
26 and its duties shall be to hold hearings and issue adjudications
27 under the provisions of Subchapter A of Chapter 5 of Title 2 of
28 the Pennsylvania Consolidated Statutes (relating to practice and
29 procedure of Commonwealth agencies) on any final certificate of
30 need decision of the department under Chapter 4.
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1 (b) The appellant shall have the burden of proving that the
2 decision was arbitrary or capricious, was not supported by
3 substantial evidence or was in violation of law.
4 (c) Hearings of the board shall be conducted in accordance
5 with the provisions of section 402 and with regulations adopted
6 by the Office of General Counsel and such regulations shall
7 include procedures for the taking of appeals, and such other
8 regulations as may be determined advisable by the Office of
9 General Counsel.
10 (d) The board may employ, with the concurrence of the Office
11 of General Counsel, such personnel as are necessary in the
12 exercise of its functions.
13 CHAPTER 4
14 CERTIFICATE OF NEED
15 Section 401. Certificate of need required; new institutional
16 health services subject to review.
17 (a) No person shall offer, develop, construct or otherwise
18 establish or undertake to establish within the State a new
19 institutional health service subject to review under this
20 chapter without first obtaining a certificate of need from the
21 department. For purposes of this chapter, "new institutional
22 health services" shall include:
23 (1) The construction, development or other establishment
24 of a new health care facility or health maintenance
25 organization.
26 (2) Any expenditure by or on behalf of a health care
27 facility or health maintenance organization in excess of
28 $150,000 which, under generally accepted accounting
29 principles consistently applied, is a capital expenditure;
30 except that this chapter shall not apply to expenditures for
19810H0840B0898 - 13 -
1 acquisitions of existing health care facilities and health
2 maintenance organizations. An acquisition by or on behalf of
3 a health care facility or health maintenance organization
4 under lease or comparable arrangement, or through donation,
5 which would have required review if the acquisition had been
6 by purchase, shall be deemed a capital expenditure subject to
7 review.
8 (3) A change in bed capacity of a health care facility
9 or health maintenance organization which increases the total
10 number of beds (or redistributes beds among various
11 categories, or relocates such beds from one physical facility
12 or site to another) by more than ten beds or more than 10% of
13 total bed capacity as defined by the department whichever is
14 less, over a two-year period.
15 (4) Health services, except home health services, which
16 are offered in or through a health care facility or health
17 maintenance organization and which were not offered on a
18 regular basis in or through such health care facility or
19 health maintenance organization within the 12-month period
20 prior to the time such services would be offered.
21 (b) (1) Any expenditure by or on behalf of a health care
22 facility or health maintenance organization in excess of
23 $100,000 made in preparation for the offering or development
24 of a new institutional health service and any arrangement or
25 commitment made for financing the offering or development of
26 the new institutional health service shall be subject to
27 review under this chapter.
28 (2) Nothing in this paragraph shall preclude the
29 department from granting a certificate of need which permits
30 expenditures only for predevelopment activities, but does not
19810H0840B0898 - 14 -
1 authorize the offering or development of the new
2 institutional health service with respect to which such
3 predevelopment activities are proposed. Expenditures in
4 preparation for the offering of a new institutional health
5 service shall include expenditures for architectural designs,
6 plans, working drawings, specifications, site acquisition and
7 preliminary plans, studies and surveys.
8 (c) Prior to its review of new institutional health
9 services, the department shall disseminate to all health care
10 facilities and health maintenance organizations within the
11 State, and shall publish in one or more newspapers of general
12 circulation in the State, a description of the scope of coverage
13 of its program for review of new institutional health services.
14 Such description shall include the coverage established by
15 subsections (a) and (b).
16 (d) Unless waived by the department for good cause shown,
17 the failure of an applicant to obtain approval of predevelopment
18 expenditures, arrangements or commitments covered by subsection
19 (b) shall bar approval of an application for the new
20 institutional health service.
21 (e) A health care provider or local agency may request a
22 ruling from the department regarding the necessity of obtaining
23 a certificate of need for a proposed change. The department
24 shall make such ruling in 30 days and publish said ruling as a
25 notice in the Pennsylvania Bulletin.
26 (f) At least 30 days prior to substantial reduction of a
27 service or a permanent decrease in the bed complement, the
28 provider shall notify the health systems agency and the
29 department of its intended action. If the health systems agency
30 does not notify the provider and the department of its
19810H0840B0898 - 15 -
1 objections, if any, within 30 days, the provider may make the
2 specified change and an amended certificate of need will be
3 issued automatically. If the health systems agency does notify
4 the provider and the department of its objections within 30
5 days, the procedures of section 402 shall apply.
6 Section 402. Certificates of need; application; issuance.
7 (a) A person desiring to obtain or amend a certificate of
8 need shall apply by sending a letter of intent to the
9 department, which will then direct such person to cooperate with
10 the health systems agency in the agency's analysis and review of
11 the proposed project. In the case of construction projects, the
12 person proposing such project shall submit to the department in
13 the letter of intent such details as may be necessary to inform
14 the department of the scope and nature of the project. A person
15 submitting an application shall supply such information as is
16 required by the regulations of the department and the health
17 systems agency. The applicant shall submit copies of the
18 application simultaneously to the department and the health
19 systems agency.
20 (b) Written notification shall be given to affected persons
21 at the beginning of a review, including the proposed schedule
22 for the review and the period within which a public hearing
23 during the course of the review may be requested by persons
24 directly affected by the review. When so requested, a public
25 hearing shall be held.
26 (c) No review shall, to the extent practicable, take longer
27 than 90 days from the date that notification is sent to all
28 affected persons to the date of the written findings made in
29 accordance with subsection (f): Provided, That the period
30 allotted by the department to the health systems agency for
19810H0840B0898 - 16 -
1 completion of its review and submission of its recommendations
2 may not be less than 60 days, except with the written consent of
3 the health systems agency. The department shall adopt criteria
4 for determining when it would not be practicable to complete a
5 review within 90 days.
6 (d) Persons subject to a review shall submit to the
7 department in such form and manner, and containing such
8 information as the department shall prescribe and publish, such
9 information as the department may require concerning the subject
10 of such review. Such information requirements vary according to
11 the purpose for which a particular review is being conducted or
12 the type of health service being reviewed.
13 (e) The department shall consider recommendations made by
14 health systems agencies in reviewing any proposed new
15 institutional health service under this chapter.
16 (f) In acting upon an application, the department may:
17 (1) grant a certificate of need as requested by the
18 applicant;
19 (2) grant in part, and refuse in part, the certificate
20 of need requested;
21 (3) refuse to grant a certificate of need; or
22 (4) return the application to the health systems agency
23 for such action as the department may direct.
24 (g) The department shall make written findings which state
25 the basis for any final decision made by the department. Such
26 findings shall be sent to the person proposing the new
27 institutional health service and to the health systems agency
28 for the health service area in which the new service is proposed
29 to be offered or developed and shall be available to others upon
30 request.
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1 (h) If the department does not make a decision regarding a
2 proposed new institutional health service within the period of
3 time specified for departmental review, the proposal shall be
4 deemed to have been found not to be needed.
5 (i) Any decision of the department under this chapter (and
6 the findings, documentary evidence and other records upon which
7 it was made) shall, upon request of the person proposing the new
8 institutional health service, be reviewed by the Health
9 Facilities Appeals Board established by this act. The request of
10 the person proposing the new institutional health service must
11 be received within 30 days of the department's decision, and the
12 hearing shall commence within 30 days of receipt of the request.
13 The decision of the board shall be made in writing within 45
14 days after the conclusion of such review. The written findings
15 shall be sent to the person proposing the new institutional
16 health service, the appropriate health systems agency and the
17 department, and shall be made available by the department to
18 others upon request. The decision of the board shall supersede
19 the final decision of the department; however, the board may
20 remand the matter to the department for further action or
21 consideration.
22 (j) When a health systems agency recommends approval or
23 disapproval of an application for a certificate of need and the
24 department disapproves or approves, respectively, said
25 application, the decision of the department (and the record upon
26 which it was made) shall, upon request of the health systems
27 agency that reviewed the application, be reviewed by the Health
28 Facilities Appeals Board in accordance with the procedure
29 established by subsection (h).
30 (k) All certificates of need issued under this chapter shall
19810H0840B0898 - 18 -
1 expire one year after the date of issuance unless the applicant
2 has made substantial progress and is diligently pursuing the
3 project authorized by the certificate to completion as
4 determined by the department. The department shall, by
5 regulation, establish maximum time limits, including a limit,
6 when appropriate, for commencement of work on the project.
7 Section 403. Adoption of procedures; purpose; applicability;
8 exceptions.
9 (a) The department shall adopt, and review and revise as
10 necessary, review procedures in accordance with the provisions
11 of this chapter and the requirements of the Secretary of Health,
12 Education and Welfare (HEW). The procedures shall be adopted
13 pursuant to the act of July 31, 1968 (P.L.769, No.240), referred
14 to as the Commonwealth Documents Law, and copies of the proposed
15 regulations shall be distributed for review and comment to the
16 council, to each health systems agency for a health service area
17 located in whole or in part within the Commonwealth and to
18 Statewide health agencies and organizations.
19 (b) Procedures adopted for reviews under this chapter may
20 vary according to the purpose for which a particular review is
21 being conducted or the type of health service being reviewed.
22 (c) The procedures may provide that the requirements of
23 section 402(b) and (d) and section 405(a) shall be deemed
24 satisfied if the appropriate health systems agency has provided
25 for the corresponding procedure.
26 (d) After following the procedures required by this section
27 for publication and distribution of proposed regulations, the
28 department may, with respect to any type or group of reviews,
29 request from the Secretary of Health, Education and Welfare an
30 exception to a procedure required by health, education and
19810H0840B0898 - 19 -
1 welfare regulations. Such request shall be in writing, shall
2 contain a detailed explanation of the reasons for the request
3 and of the substitute review procedures that the department
4 intends to follow if the exception is approved, and shall be
5 accompanied by copies of all written comments submitted under
6 section 403(a) to the department.
7 Section 404. Criteria for departmental review; required
8 findings.
9 (a) The department shall adopt, and utilize as appropriate,
10 specific criteria for conducting the reviews covered by this
11 chapter, which criteria shall include at least the following
12 general considerations:
13 (1) The relationship of the health services being
14 reviewed to the State health plan adopted by the council and
15 to the applicable health systems plan and annual
16 implementation plan adopted pursuant to Federal law.
17 (2) The relationship of services reviewed to the long-
18 range development plan (if any) of the person providing or
19 proposing such services.
20 (3) The need that the population served or to be served
21 by such services has for such services.
22 (4) The availability of less costly or more effective
23 alternative methods of providing such services.
24 (5) The immediate and long-term financial feasibility of
25 the proposal, as well as the probable impact of the proposal
26 on the costs of and charges for providing health services by
27 the person proposing the new institutional health service.
28 (6) The relationship of the services proposed to be
29 provided to the existing health care system of the area in
30 which such services are proposed to be provided.
19810H0840B0898 - 20 -
1 (7) The availability of resources (including health
2 manpower, management personnel, and funds for capital and
3 operating needs) for the provision of the services proposed
4 to be provided and the availability of alternative uses of
5 such resources for the provision of other health services.
6 (8) The relationship, including the organizational
7 relationship, of the health services proposed to be provided
8 to ancillary or support services.
9 (9) Special needs and circumstances of those entities
10 which provide a substantial portion of their services or
11 resources, or both, to individuals not residing in the health
12 service areas in which the entities are located or in
13 adjacent health service areas. Such entities may include
14 medical and other health professional schools, multi-
15 disciplinary clinics and specialty centers.
16 (10) The special needs and circumstances of health
17 maintenance organizations for which assistance may be
18 provided under Federal law. Such needs and circumstances
19 include the needs of and costs to members and projected
20 members of the health maintenance organization in obtaining
21 health services and the potential for a reduction in the use
22 of inpatient care in the community through an extension of
23 preventive health services and the provision of more
24 systematic and comprehensive health services. The
25 consideration of a new institutional health service proposed
26 by a health maintenance organization shall also address the
27 availability and cost of obtaining the proposed new
28 institutional health service from the existing providers in
29 the area that are not health maintenance organizations. The
30 criteria established by the department pursuant to this
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1 paragraph shall be consistent with standards and procedures
2 established by the Secretary of Health, Education and Welfare
3 under Federal law.
4 (11) The special needs and circumstances of biomedical
5 and behavioral research projects which are designed to meet a
6 national need and for which local conditions offer special
7 advantages.
8 (12) In the case of a construction project:
9 (i) the costs and methods of the proposed
10 construction, including the costs and methods of energy
11 provisions; and
12 (ii) the probable impact of the construction project
13 reviewed on the costs of providing health services by the
14 person proposing such construction project.
15 (b) Criteria adopted for reviews in accordance with
16 subsection (a) may vary according to the purpose for which a
17 particular review is being conducted or the type of health
18 service reviewed.
19 (c) In the case of any proposed new institutional health
20 service for the provision of health services to inpatients, the
21 department shall not grant a certificate of need unless:
22 (1) the department makes written findings as to:
23 (i) the efficiency and appropriateness of the use of
24 existing inpatient facilities providing inpatient
25 services similar to those proposed; and
26 (ii) the capital and operating costs (and their
27 potential impact on patient charges), efficiency and
28 appropriateness of the proposed new institutional health
29 service; and
30 (2) the department makes each of the following findings
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1 in writing:
2 (i) that superior alternatives to such inpatient
3 services in terms of cost, efficiency and appropriateness
4 do not exist and that the development of such
5 alternatives is not practicable;
6 (ii) that in the case of new construction,
7 alternatives to new construction (e.g., modernization or
8 sharing arrangements) have been considered and have been
9 implemented to the maximum extent practicable;
10 (iii) that patients will experience serious problems
11 in terms of costs, availability, or accessibility, or
12 such other problems as may be identified by the reviewing
13 agency, in obtaining inpatient care of the type proposed
14 in the absence of the proposed new service; and
15 (iv) that in the case of a proposal for the addition
16 of beds for the provision of skilled nursing or
17 intermediate care the relationship of the addition to the
18 plans of other agencies of the State responsible for
19 providing and financing long-term care (including home
20 health services) has been considered.
21 Section 405. Additional duties of the department and persons
22 subject to this chapter.
23 (a) Providers of health services and other persons subject
24 to review under this chapter shall submit periodic reports
25 respecting the development of proposals subject to review under
26 this chapter shall submit periodic reports respecting the
27 development of proposals subject to review under this chapter.
28 (b) The department shall prepare and publish, at least
29 annually, reports of the reviews being conducted (including a
30 statement concerning the status of each such review) and of the
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1 reviews completed by the agency since the publication of the
2 last report and a general statement of the findings and
3 decisions made in the course of such reviews.
4 (c) Any person shall have access to all applications
5 reviewed by the department and to all other written materials
6 pertinent to any departmental review.
7 (d) The department shall review every five years all
8 institutional health services being offered in the Commonwealth
9 and, after consideration of recommendations submitted by health
10 systems agencies respecting the appropriateness of such
11 services, make public its findings. The department shall
12 complete its findings with respect to the appropriateness of any
13 existing institutional health service within one year after the
14 date a health systems agency has made its recommendation with
15 respect to the appropriateness of the service.
16 Section 406. Existing providers.
17 All providers who are subject to the certificate of need
18 provisions of this act shall be issued forthwith a certificate
19 of need by the department for all buildings, real property and
20 equipment owned, leased or being operated or under contract for
21 construction, purchase or lease and for all services being
22 rendered by the licensed or approved providers on the effective
23 date of this act.
24 CHAPTER 5
25 GENERAL PROVISIONS
26 Section 501. Administration of this act.
27 (a) No health care provider shall be required by any
28 provisions of this act or rules and regulations promulgated
29 thereunder to provide facilities or render services contrary to
30 the stated religious beliefs of the provider, nor shall any
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1 applicant be denied a license or a certificate of need or the
2 right to apply for or receive public funds on the grounds he
3 will not provide the facilities or render the services for such
4 reasons.
5 (b) Except as otherwise provided by law, no provider shall
6 discriminate in the operation of a health care facility on the
7 basis of race, religion, creed, sex or national origin.
8 (c) In carrying out the provisions of this act and other
9 statutes of this Commonwealth relating to health care
10 facilities, the department and other departments and agencies of
11 State and local governments shall make every reasonable effort
12 to prevent duplication of inspections and examinations.
13 Section 502. Appropriations.
14 (a) The sum of $750,000, or as much thereof as may be
15 necessary, is hereby appropriated to the Department of Health
16 for the administration and enforcement of this act.
17 (b) The sum of $250,000 is hereby appropriated to the Office
18 of General Counsel for administration of the Health Facilities
19 Appeals Board.
20 Section 503. Repeals.
21 (a) Title 67 (Public Welfare) of the Pennsylvania
22 Consolidated Statutes, added November 15, 1972 (P.L.1063,
23 No.271), is repealed.
24 (b) All acts and parts of acts are repealed insofar as they
25 are inconsistent herewith.
26 Section 504. Effective date.
27 This act shall take effect in 180 days.
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