PRINTER'S NO. 3283
No. 2459 Session of 1988
INTRODUCED BY PISTELLA, HALUSKA, KUKOVICH, BELARDI, TRELLO,
PRESTON, JOSEPHS, MELIO, DeLUCA AND MAINE, MAY 11, 1988
REFERRED TO COMMITTEE ON HEALTH AND WELFARE, MAY 11, 1988
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," further providing for health
10 planning; and creating the Pennsylvania Health Policy Board.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Sections 103, 201 and 202 of the act of July 19,
14 1979 (P.L.130, No.48), known as the Health Care Facilities Act,
15 amended or added July 12, 1980 (P.L.655, No.136), are amended to
16 read:
17 Section 103. Definitions.
18 The following words and phrases when used in this act shall
19 have, unless the context clearly indicates otherwise, the
20 meanings given to them in this section:
21 "Act." The comprehensive Health Care Facilities Act.
1 ["Affected person." A person whose proposal is being
2 reviewed for purposes of certificate of need, the health systems
3 agency for the health service area in which the proposed new
4 institutional health service is to be offered or developed,
5 health systems agencies serving contiguous health service areas,
6 health care facilities and health maintenance organizations
7 located in the health service area which provide institutional
8 health services, and those members of the public who are to be
9 served by the proposed new institutional health services and
10 those agencies, if any, which establish rates for health care
11 facilities and health maintenance organizations located in the
12 health systems area in which the proposed new institutional
13 health service is to be offered or developed.
14 "Annual implementation plan." The latest health systems
15 agency's annual statement of objectives to achieve the goals of
16 the health systems plan, including the priorities established
17 among the objectives.]
18 "Certificate of need." A certificate issued by the
19 department under the provisions of this act, including those
20 issued as an amendment to an existing certificate of need.
21 "Clinically related." A diagnostic, treatment, or
22 rehabilitative service but shall not include nonclinically
23 related services such as, but not limited to, parking garages,
24 nonclinical computer systems, or refinancing of debt.
25 ["Conflict of interest." For the purpose of section 501, the
26 interest of any person, whether financial, by association with,
27 or as a contributor of money or time to, any nonprofit
28 corporation or other corporation, partnership, association, or
29 other organization, and whenever a person is a director, officer
30 or employee of such organization, but shall not exist whenever
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1 the organization in which such person is interested is being
2 considered as part of a class or group for whom regulations are
3 being considered, if the material facts as to the relationship
4 or interest are disclosed or are known to the board.]
5 "Consumer." A natural person [who is not a "provider of
6 health care" as defined in Title XV of the Federal Public Health
7 Service Act.] who is not involved in the provision of health
8 services or health insurance. For the purpose of [section 301]
9 this act, any person who holds a fiduciary position in any
10 health care facility or health maintenance organization shall
11 not be considered a consumer.
12 "Department." The Department of Health.
13 ["Develop." When used in connection with health services or
14 facilities, means to undertake those activities which on their
15 completion will result in the offer of a new health service or
16 the incurring of a financial obligation in relation to the
17 offering of such a service.]
18 "Health care facility." [A general or special hospital
19 including tuberculosis and psychiatric hospitals, rehabilitation
20 facilities, skilled nursing facilities, kidney disease treatment
21 centers including free-standing hemodialysis units, intermediate
22 care facilities and ambulatory surgical facilities, both profit
23 and nonprofit and including those operated by an agency of State
24 or local government, but shall not include an office used
25 exclusively for their private or group practice by physicians or
26 dentists, nor a program which renders treatment or care for drug
27 or alcohol abuse or dependence, unless located within, by or
28 through a health care facility, a facility providing treatment
29 solely on the basis of prayer or spiritual means in accordance
30 with the tenets of any church or religious denomination, nor a
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1 facility conducted by a religious organization for the purpose
2 of providing health care services exclusively to clergymen or
3 other persons in a religious profession who are members of the
4 religious denominations conducting the facility.
5 This definition shall exclude all health care facilities as
6 hereinabove defined that do not accept, directly or indirectly,
7 any Federal or State Governmental funds for capitalization,
8 depreciation, interest, research or reimbursement, unless the
9 Secretary of Health, Education and Welfare, pursuant to Federal
10 Public Law 93-641, section 1523(a)(4)(B), concludes that this
11 exclusionary provision is unsatisfactory to the Departments of
12 Health, Education and Welfare.] Any building, service or program
13 through which clinically related health services are offered.
14 "Health maintenance organization." An [organization defined
15 as a health maintenance organization by section 1531(8) of the
16 Federal Public Health Service Act or an] organization regulated
17 by the act of December 29, 1972 (P.L.1701, No.364), known as the
18 ["Voluntary Nonprofit Health Service Act of 1972."] "Health
19 Maintenance Organization Act."
20 "Health service area." [The area served by a health systems
21 agency as designated in accordance with Title XV of the Federal
22 Public Health Service Act.] An area designated by the department
23 for purposes of planning.
24 "Health services." Clinically related (i.e., diagnostic,
25 treatment or rehabilitative) services, including alcohol, drug
26 abuse and mental health services.
27 ["Health systems agency" or "HSA." An entity which has been
28 conditionally or fully designated pursuant to Title XV of the
29 Federal Public Health Service Act.]
30 "Hearing board." The State Health Facility Hearing Board
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1 created in the [Department of Justice] Office of General Counsel
2 under the provisions of this act.
3 ["Home health care." The provision of nursing and other
4 therapeutic services to disabled, injured or sick persons in
5 their place of residence and other health related services
6 provided to protect and maintain persons in their own home.
7 "Major medical equipment." Medical equipment which is used
8 for the provision of medical and other health services and which
9 costs in excess of $150,000, except major medical equipment
10 acquired by or on behalf of a clinical laboratory to provide
11 clinical laboratory services if the clinical laboratory is
12 independent of a physician's office and a hospital and it has
13 been determined under the Medicare program to meet the
14 applicable requirements of section 1861(s) of the Federal Social
15 Security Act. In determining whether medical equipment has a
16 value in excess of $150,000, the value of studies, surveys,
17 designs, plans, working drawings, specifications, and other
18 activities essential to the acquisition of such equipment shall
19 be included.
20 "Offer." Make provision for providing in a regular manner
21 and on an organized basis specified health services.]
22 "Local health councils." Voluntarily created and funded
23 local citizen's advisory bodies which may be designated by the
24 department to hold public meetings on CON applications and whose
25 structure and functions are specified by the department.
26 "Patient." A natural person receiving health care in or from
27 a health care provider.
28 "Person." A natural person, corporation (including
29 associations, joint stock companies and insurance companies),
30 partnership, trust, estate, association, the Commonwealth, and
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1 any local governmental unit, authority and agency thereof. [The
2 term shall include all entities owning or operating a health
3 care facility or health maintenance organization.]
4 "Persons directly affected" or "directly affected persons."
5 [A] The person whose proposal for certificate of need is being
6 reviewed[,] and members of the public who are to be served by
7 the proposed new institutional health services[, health care
8 facilities and health maintenance organizations located in the
9 health service area in which the service is proposed to be
10 offered or developed which provide services similar to the
11 proposed services under review, and health care facilities and
12 health maintenance organizations which prior to receipt by the
13 agency of the proposal being reviewed have formally indicated an
14 intention to provide such similar service in the future and
15 those agencies, if any, which establish rates for health care
16 facilities and health maintenance organizations located in the
17 health systems area in which the proposed new institutional
18 health service is to be offered or developed].
19 "Policy board." The [Health Care Policy Board created in the
20 Department of Health under the provisions of this act]
21 Pennsylvania Health Policy Board.
22 ["Predevelopment costs." Expenditures for preparation of
23 architectural designs, working drawings, plans and
24 specifications.]
25 "Public [hearing] meeting." A meeting open to the public
26 where any person has an opportunity to [present testimony held
27 without imposition of a fee] comment on a CON project or
28 proposed State health services plan amendment. The meetings
29 shall be held in accordance with rules established by the
30 department.
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1 ["Rehabilitation facility." An inpatient facility which is
2 operated for the primary purpose of assisting in the
3 rehabilitation of disabled persons through an integrated program
4 of medical and other services which are provided under competent
5 professional supervision.]
6 "Secretary." The Secretary of the Department of Health of
7 the Commonwealth of Pennsylvania.
8 ["Statewide Health Coordinating Council" or "SHCC", or
9 "council." The council established in compliance with Title XV
10 of the Federal Public Health Service Act.]
11 "State health services plan." A qualitative and quantitative
12 description of the health service delivery system as it should
13 be organized to meet the health service needs of the citizens of
14 this Commonwealth in an affordable manner. The plan shall be
15 developed by the department after consultation with the policy
16 board. The State health services plan shall contain the criteria
17 against which certificate of need applications are reviewed and
18 decisions based.
19 "Third party payor." A person who makes payments on behalf
20 of patients under compulsion of law or contract, who does not
21 supply care or services as a health care provider or who is
22 engaged in issuing any policy or contract of individual or group
23 health insurance or hospital or medical service benefits[, but].
24 The term shall not include the Federal, State, or any local
25 government unit, authority, or agency thereof or a health
26 maintenance organization.
27 Section 201. Powers and duties of the department.
28 The Department of Health shall have the power and its duties
29 shall be:
30 (1) [To act as a single State agency through its staff
19880H2459B3283 - 7 -
1 and the policy board in serving as the designated sole State
2 health planning and development agency in accordance with
3 Titles XV and XVI of the Federal Public Health Service Act.
4 (2)] To exercise exclusive jurisdiction over health care
5 providers, and jurisdiction over health maintenance
6 organizations in accordance with the provisions of this act.
7 (2) To issue determinations of reviewability or
8 nonreviewability of proposals.
9 (3) To issue certificates of need and amended
10 certificates of need in accordance with the provisions of
11 this act.
12 (4) [With respect to health care facilities, to
13 investigate, and report to the Auditor General, upon every
14 application to the Auditor General made by any institution,
15 corporation or unincorporated association, desiring to give a
16 mortgage under the provisions of the act of April 29, 1915
17 (P.L.201, No.112), entitled "An act making mortgages, given
18 by benevolent, charitable, philanthropic, educational and
19 eleemosynary institutions, corporations, or unincorporated
20 associations, for permanent improvements and refunding
21 purposes, prior liens to the liens of the Commonwealth for
22 the appropriation of moneys; providing a method for the
23 giving of such mortgages and fixing the duties of the Auditor
24 General and Board of Public Charities in connection
25 therewith."] To withdraw expired certificates of need.
26 (5) To evaluate at least annually its functions, [and]
27 performance and [their] economic effectiveness.
28 [(6) To prepare, in accordance with applicable Federal
29 law, an inventory of the health care facilities located in
30 the Commonwealth and evaluate on an on-going basis the
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1 physical condition of such facilities. The inventory and
2 evaluation shall be periodically reported to every HSA.
3 (7) To require, pursuant to regulation, submission of
4 periodic reports by providers of health services and other
5 persons subject to review respecting the development of
6 proposals subject to review.
7 (8) To research, prepare and after approval by the SHCC
8 and the Governor publish triennially a State health plan for
9 the Commonwealth based on the various health systems plans.]
10 (8.1) To research, prepare and, after approval by the
11 Governor, publish, no later than 18 months after the
12 effective date of this act and annually thereafter, a revised
13 State health services plan for the Commonwealth as defined
14 under this act. For the purposes of Chapter 7 of this act,
15 until the State health services plan, as defined in section
16 401.4 is adopted, the department shall use the State health
17 services plan in effect at the time the certificate of need
18 proposal is reviewed.
19 (9) To provide coordination with the National Center for
20 Health Statistics of the activities of the department for the
21 collection, retrieval, analysis, reporting and publication of
22 statistical and other information relating to health and
23 health care and to require health care providers doing
24 business in the Commonwealth to make statistical and other
25 reports of information required by Federal law to be
26 submitted to the National Center for Health Care Statistics;
27 and to collect such other information as may be appropriate
28 to determine the appropriate level of facilities and services
29 for the effective implementation of certification of need
30 under this act.
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1 (10) To furnish such staff support and expertise to the
2 [department's] policy board as may be [needed by them]
3 requested by it to perform [their] its responsibilities
4 provided that any refusal of a substantial request from such
5 board be subject to final determination by the Governor.
6 (11) To receive, docket and review all applications for
7 certificates of need or amendments thereof and approve or
8 disapprove the same.
9 [(12) To determine the Statewide health needs of the
10 Commonwealth after providing reasonable opportunity for the
11 submission of written recommendations respecting such needs
12 by State agencies responsible for planning with regard to
13 mental health, mental retardation and other developmental
14 disabilities, and drug and alcohol abuse, as well as other
15 agencies of State Government designated by the Governor for
16 the purpose of making such recommendations and after
17 consulting with SHCC.]
18 (13) To minimize the administrative burden on health
19 care providers by eliminating unnecessary duplication of
20 financial and operational reports and to the extent possible
21 coordinating reviews and inspections performed by Federal,
22 State, local and private agencies.
23 (14) To adopt and promulgate[, after consultation with
24 the policy board,] regulations necessary to carry out the
25 purposes and provisions of this act relating to certificate
26 of need.
27 (15) To enforce the rules and regulations promulgated by
28 the department as provided in this act.
29 [(16) To consult with the SHCC in the administration of
30 this act.]
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1 (17) To provide technical assistance to individuals and
2 public and private entities in filling out the necessary
3 forms for the development of projects and programs.
4 (18) To establish a fee schedule for certificate of need
5 applications and letters of intent.
6 (19) To coordinate any data collections activities under
7 this act so as not to duplicate the data collection
8 activities of other State and Federal agencies.
9 Section 202. Encouragement of competition and innovation.
10 The [health systems agencies and the] department shall in
11 [their] its planning and review activities foster competition
12 [and] where it does not adversely impact on cost, quality or
13 access to care or interfere with necessary interprovider
14 cooperation. The department shall also encourage innovations in
15 the financing and delivery systems for health services that will
16 promote economic behavior by consumers and providers of health
17 services [and] that lead to appropriate investment, supply and
18 use of health services. [To this end, the health systems plan
19 and the annual implementation plan adopted by the health systems
20 agencies and State health plan shall include an assessment of
21 the current and potential scope of competition and market forces
22 to establish appropriate investment and utilization patterns in
23 the Commonwealth and shall specify the public and private
24 actions needed to strengthen these forces. Revisions of the plan
25 shall assess individual services or types of providers as to
26 whether the conditions for competition have improved in the
27 period since the last plan.]
28 Section 2. Sections 301, 302, 303, 401, 402, 403, 404 and
29 405 of the act are repealed.
30 Section 3. The act is amended by adding sections to read:
19880H2459B3283 - 11 -
1 Section 401.1. State health planning.
2 The General Assembly hereby finds that in order to ensure the
3 continued and future health, safety and well-being of the
4 citizens of this Commonwealth, it is necessary to establish a
5 State system of health planning directed to the identification,
6 promotion, development and control of health resources which
7 adequately meet the identified needs of the citizens of this
8 Commonwealth, which encourages technological innovation, and
9 which reflects current and emerging standards of medical care.
10 Section 401.2. Pennsylvania Health Policy Board.
11 (a) The General Assembly hereby establishes an advisory
12 board to the department known as the Pennsylvania Health Policy
13 Board.
14 (b) The board shall consist of:
15 (1) The Secretary of Health.
16 (2) The Secretary of Aging.
17 (3) The Secretary of Public Welfare.
18 (4) The Commissioner of Insurance.
19 (5) One representative of hospitals appointed by the
20 Governor from a list of three qualified hospital
21 representatives recommended by the Hospital Association of
22 Pennsylvania.
23 (6) One representative of physicians appointed by the
24 Governor from two lists of three qualified physician
25 representatives. The Pennsylvania Medical Society and the
26 Pennsylvania Osteopathic Medical Association will each
27 prepare and submit their own respective lists.
28 (7) One representative of Blue Cross and Blue Shield
29 appointed by the Governor from two lists of three qualified
30 persons. The Blue Cross and Blue Shield Plans of Pennsylvania
19880H2459B3283 - 12 -
1 will each prepare and submit their own respective lists.
2 (8) One representative of commercial insurance carriers
3 appointed by the Governor from a list of three qualified
4 persons recommended by the Insurance Federation of
5 Pennsylvania, Inc.
6 (9) One representative of health maintenance
7 organizations appointed by the Governor from a list of three
8 qualified persons recommended by the Pennsylvania Association
9 of Health Maintenance Organizations.
10 (10) One representative of long-term care service
11 providers appointed by the Governor from three lists of three
12 qualified persons. The Pennsylvania Health Care Association,
13 the Pennsylvania Association of Non-Profit Homes for the
14 Aging and the Pennsylvania Association of County Affiliated
15 Homes, will each prepare and submit their own respective
16 lists.
17 (11) One representative of business appointed by the
18 Governor, who shall not be primarily involved in the
19 provision of health care or health insurance, from a list of
20 three qualified persons recommended by the Pennsylvania
21 Chamber of Commerce.
22 (12) One representative of organized labor appointed by
23 the Governor from a list of three qualified persons
24 recommended by the Pennsylvania AFL-CIO.
25 (13) Three consumers, none of whom shall be primarily
26 involved in the provision of health care or health insurance,
27 and at least one of whom shall be a representative of elderly
28 health care consumers. The representative of elderly health
29 care consumers shall be appointed by the Governor from a list
30 of three qualified persons recommended by the Pennsylvania
19880H2459B3283 - 13 -
1 Chapter of the American Association of Retired Persons. The
2 remaining two consumer representatives shall be appointed by
3 the Governor with consideration of representation of specific
4 sectors of the population.
5 (i) In the case of each appointment to be made from
6 a list supplied by a specified organization, it is
7 incumbent upon that organization to consult with and
8 provide a list which reflects the input of other
9 equivalent organizations representing similar interests.
10 The appointing authority shall have the discretion to
11 request additions to the list originally submitted.
12 Additional names will be provided no later than 15 days
13 after such request. Appointment shall be made by the
14 appointing authority no later than 60 days after the
15 receipt of the original list. If, for any reason, any
16 specified organization should cease to exist, then the
17 respective appointing authority shall specify a new
18 equivalent organization to fulfill its responsibilities
19 under this act.
20 (ii) The majority and minority chairmen of the
21 Health and Welfare Committee of the House of
22 Representatives and the majority and minority chairmen of
23 the Public Health and Welfare Committee of the Senate
24 shall serve on the board only in an ex officio capacity
25 and shall not be entitled to vote in the board's
26 deliberations or actions.
27 (iii) Appointments shall be made in a manner so as
28 to reflect representation of the various geographical
29 regions of this Commonwealth.
30 (c) The members shall annually elect, by a majority vote of
19880H2459B3283 - 14 -
1 the members, appropriate officers of the board from the
2 membership of the board.
3 (d) A simple majority of those members of the board shall
4 constitute a quorum for the transaction of any business and the
5 act by the majority of the members present at any meeting in
6 which there is a quorum shall be deemed to be the act of the
7 board.
8 (e) All meetings of the board shall be advertised and
9 conducted pursuant to the act of July 3, 1986 (P.L.388, No.84),
10 known as the "Sunshine Act."
11 (1) The board shall meet at least four times a year and
12 may provide for special meetings as it deems necessary.
13 Meeting dates shall be set by a majority vote of the members
14 of the board or by the call of the chief officer upon seven
15 days' notice to all board members.
16 (2) All meetings of the board shall be publicly
17 advertised, as provided for in this subsection, and shall be
18 open to the public, except that the board, through its
19 bylaws, may provide for executive sessions on subjects
20 permitted to be discussed in such sessions under the
21 "Sunshine Act." No act of the board shall be taken in an
22 executive session.
23 (3) The board shall publish a schedule of its meetings
24 in the Pennsylvania Bulletin and in at least four newspapers
25 of general circulation in the Commonwealth. Such notice shall
26 be published at least once in each calendar quarter and shall
27 list the scheduled meetings of the board to be held in the
28 subsequent calendar quarter. Such notice shall specify the
29 date, time and place of the meetings and shall state that the
30 council's meetings are open to the general public. No notice
19880H2459B3283 - 15 -
1 shall be required for executive sessions of the council.
2 (f) The policy board shall adopt bylaws not inconsistent
3 with this act and may appoint such committees or elect such
4 officers as it deems advisable.
5 (g) The members of the policy board shall not receive a
6 salary or per diem allowance for serving as members of the board
7 but shall be reimbursed for actual and necessary expenses
8 incurred in the performance of their duties. Expenses may
9 include reimbursement of travel and living expenses while
10 engaged on board business.
11 (h) (1) The terms of the Secretary of Health, the Secretary
12 of Aging, the Secretary of Public Welfare and the Insurance
13 Commissioner shall be concurrent with their holding of such
14 offices. The remaining members of the policy board shall
15 serve for a term of three years from the date of appointment.
16 (2) No appointed member shall serve more than two full
17 consecutive terms of three years. Vacancies shall be filled
18 in the same manner as the initial appointment within 60 days
19 of the vacancies.
20 (i) Within 60 days of the effective date of this
21 act, each organization identified in section 402(b) is
22 required to submit a list of qualified recommendations to
23 the appointing authority.
24 (ii) The Governor shall make all appointments called
25 for in section 401.2(b) within 90 days of the effective
26 date of this act and the operations of the board shall
27 begin immediately upon appointment of the full board.
28 (i) The Secretary of Health, the Secretary of Aging, the
29 Insurance Commissioner and the Secretary of Public Welfare may
30 appoint a designee to exercise their full powers as a member of
19880H2459B3283 - 16 -
1 the board as long as such designee possesses at least the rank
2 of Deputy Secretary or equivalent of the appropriate department
3 or agency.
4 (j) No other board member may act or attend through a
5 designee or by proxy.
6 Section 401.3. Powers and duties of the board.
7 The board shall exercise all powers necessary and appropriate
8 to carry out its duties, including the following:
9 (1) Advise and assist the department's staff in
10 development and revision of the State health services plan as
11 defined by this act.
12 (2) Annually develop a work plan which identifies those
13 provisions of the State health services plan which must be
14 revised, reconsidered or developed within the succeeding
15 calendar year.
16 (3) Convene, as it deems appropriate, special expert
17 task forces to review and advise the board and department
18 upon the qualitative and quantitative requirements for the
19 delivery of specified health services.
20 (4) Annually review the list of new health services
21 subject to review developed by the department pursuant to the
22 provisions of section 701(a)(2).
23 (5) Appoint independent, multidisciplinary panels of
24 experts to advise the department respecting those new
25 services which should be subject to certificate of need
26 review as identified in section 701(a)(2). The membership of
27 the panel shall be appointed so as to reflect the
28 geographical regions of the Commonwealth.
29 (6) Convene public meetings in each of the regions of
30 this Commonwealth for purposes of obtaining public comment on
19880H2459B3283 - 17 -
1 the State health services plan and any revisions thereof.
2 (7) Analyze and respond to the comments of the public
3 respecting the provisions of the State health services plan
4 or revisions thereof.
5 Section 401.4. State health services plan.
6 The State health services plan shall consist of, at a
7 minimum:
8 (1) An identification of the resources necessary to
9 serve the health needs of the population of this
10 Commonwealth.
11 (2) An analysis of the availability, accessibility and
12 affordability of the resources necessary to meet the health
13 needs of the population of this Commonwealth.
14 (3) An analysis of and response to the public comments
15 submitted in respect to the proposed State health services
16 plan.
17 (4) Standards and criteria for the review of health
18 service proposals by the department under this act.
19 (5) An exceptions process which permits exceptions to be
20 granted to the standards and criteria in order to reflect
21 local experience or ensure local access or to respond to
22 circumstances which pose a threat to public health and
23 safety.
24 Section 4. Section 501 of the act is amended to read:
25 Section 501. State Health Facility Hearing Board.
26 There is hereby created the State Health Facility Hearing
27 Board in the [Department of Justice] Office of General Counsel
28 which shall consist of three members who shall initially be
29 appointed for terms of one, two and three years respectively by
30 the Governor and confirmed by a majority vote of the Senate.
19880H2459B3283 - 18 -
1 Thereafter, appointments shall be by the Governor for four year
2 terms. Members shall be chosen for their familiarity and
3 experience with health care facilities or for relevant training
4 and experience which will assist the board to perform its
5 functions. Appointments shall be made to ensure that at least
6 one of the members shall be a member of the Bar of the Supreme
7 Court of Pennsylvania. No person shall be chosen who is at the
8 time of appointment an employee of the Commonwealth or of any
9 health care provider. No member shall participate in any action
10 or decision concerning any matter in which the member has an
11 economic interest or other conflict of interest.
12 Section 5. Sections 502 and 505 of the act, amended July 12,
13 1980 (P.L.655, No.136), are amended to read:
14 Section 502. Powers and duties of the hearing board.
15 (a) The hearing board shall have the powers and its duties
16 shall be:
17 (1) To hear appeals from departmental decisions on
18 applications for certificates of need or amendments thereto.
19 [(2) To hear upon petition objections to published
20 regulations, criteria, or standards of the health systems
21 agency or department as to the policies therein set forth and
22 where appropriate to request the promulgating agency to
23 reconsider such policies.]
24 (3) To hear appeals from decisions of the department
25 which require a person to obtain a certificate of need [for
26 major medical equipment or the acquisition of an existing
27 health care facility] and appeals from departmental
28 withdrawal of certificates of need.
29 (4) To fix the place of hearings in the area from which
30 the application arises in matters relating to certificate of
19880H2459B3283 - 19 -
1 need.
2 (b) Hearings may be held before one or more members of the
3 board, but action of the board shall be made by majority vote of
4 the board.
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 Law
9 and a written record shall be kept of said proceedings and a
10 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 and in the Pennsylvania Bulletin at least 14 days
24 before the hearing.
25 (d) The State Health Facility Hearing Board shall have the
26 authority to adopt rules and regulations establishing procedures
27 for the taking of appeals and other procedural rules and
28 regulations as may be advisable.
29 Section 6. Section 506 of the act is amended to read:
30 Section 506. Appeals to the hearing board.
19880H2459B3283 - 20 -
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 of the mailing date of the decision by [any party or
4 health systems agency who is involved in the proceeding] the
5 applicant or any directly affected person pursuant to section
6 704. The appeal to the hearing board shall be commenced within
7 30 days of the appeal and shall be limited to issues raised by
8 the appellant in the specification of objections to the decision
9 of the department which shall raise no further issues not
10 brought to the attention of [the health systems agency or] the
11 department, and the board shall entertain no evidence that the
12 hearing board is satisfied the appellant was able, by the
13 exercise of reasonable diligence, to have submitted before [the
14 health systems agency and] the department. For purposes of this
15 subsection an appeal shall be deemed to commence with the
16 establishment by the board of a briefing schedule.
17 (b) The hearing board shall be bound by the duly promulgated
18 regulations of the department and shall give due deference to
19 the expertise of [the health systems agencies and] the
20 department in reaching [their] the hearing board's decisions. It
21 shall receive any evidence as to challenges of the authority of
22 the department or the reasonableness of the criteria or
23 regulations used in the review of the application for the sole
24 purpose of creating a record for any subsequent appeal to court.
25 [(c) When any decision of the hearing board is inconsistent
26 with the recommendations made with respect thereto by a health
27 systems agency, or with the applicable health systems plan or
28 annual implementation plan, the hearing board shall submit to
29 such health systems agency and all parties to the proceeding a
30 written, detailed statement of the reasons for the
19880H2459B3283 - 21 -
1 inconsistency.]
2 (d) (1) The board may charge a reasonable fee to cover the
3 costs of appeals before the board.
4 (2) Fees shall include costs of printing or otherwise
5 producing necessary copies of briefs and reproduced records
6 at rates not higher than those generally charged for such
7 work by the Commonwealth, costs of transcripts and witness
8 fees.
9 (e) (1) At any time after initiation of the appeal but in
10 no circumstance later than the date of the hearing, the board
11 shall decide whether the appealing party shall be obligated
12 to post a bond or other adequate security, in an amount
13 sufficient to cover reasonably expected costs and to cover
14 legal costs of the department and the applicant but in no
15 circumstance in excess of $50,000. Failure to post a bond or
16 adequate security may, upon rule and order, result in
17 dismissal of the appeal.
18 (2) Bonds or security shall not be required from the
19 applicant or members of the public who are to be served by
20 the new institutional health services and who are not, in the
21 judgment of the board, appealing on behalf of a competing
22 institution or organization.
23 (f) Bond shall be considered forfeited unless the board
24 rules in favor of the appellant. Forfeited bond shall be
25 distributed by the board to cover costs in subsection (e)(1).
26 Section 7. Section 507 of the act, repealed in part October
27 5, 1980 (P.L.693, No.142), is amended to read:
28 Section 507. Appeals and procedures on appeals.
29 The action of the hearing board may be appealed by any party
30 [or health systems agency] who is involved in that proceeding.
19880H2459B3283 - 22 -
1 Section 8. Section 601 of the act, amended July 12, 1980
2 (P.L.655, No.136), is amended to read:
3 Section 601. Promulgation of rules and regulations.
4 (a) All rules and regulations under this act shall be
5 prepared by the department [and submitted for review by the
6 policy board and the department shall consult with the policy
7 board before proposed regulations are published] after
8 collecting input from the various interested parties affected by
9 the proposed regulations.
10 (b) All rules and regulations adopted under this act shall
11 provide fair access and due process in all proceedings held to
12 carry out the provisions of this act and shall not require an
13 applicant to supply data or information as to other health care
14 facilities or health maintenance organizations.
15 (e) The department shall also publish a notice of the
16 availability of proposed regulations relating to certificate of
17 need and any revisions thereof [in accordance with the
18 designation agreement with the Secretary of Health, Education
19 and Welfare, if any,] in at least two newspapers in general
20 circulation in the Commonwealth, [together with a place] and
21 identify a location where they may be examined and copied by
22 interested persons.
23 (f) Proposed regulations establishing certificate of need
24 review procedures and criteria or changes therein shall be
25 distributed by the department to the [SHCC, each health systems
26 agency operating in the Commonwealth and Statewide health
27 agencies and organizations and those agencies, if any, which
28 establish rates for health care facilities and health
29 maintenance organizations] policy board, and groups or
30 individuals such as local business or labor coalitions.
19880H2459B3283 - 23 -
1 (f.1) The department shall establish a log in which
2 interested persons may register to request notice in writing of
3 public meetings on State health services plan amendments or on
4 specific certificate of need applications and of subsequent
5 decisions by the department thereon.
6 (g) The department shall distribute copies of adopted final
7 regulations on certificate of need review procedures and
8 criteria, and any revisions thereof, to persons set forth in
9 subsection (f) [and to the Departments of Health, Education and
10 Welfare] and shall provide such copies to other interested
11 persons upon request.
12 (h) Prior to review by the department of new [institutional]
13 health services under this act, the department [shall
14 disseminate to all health care facilities and health maintenance
15 organizations within the Commonwealth, and] shall publish in the
16 Pennsylvania Bulletin and in one or more newspapers in general
17 circulation within the Commonwealth a description of coverage of
18 the certificate of need program for review, as determined under
19 regulations[, and any]. Any revisions thereof shall be similarly
20 disseminated and published.
21 Section 9. Section 603 of the act, amended July 12, 1980
22 (P.L.655, No.136) and repealed in part October 5, 1980 (P.L.693,
23 No.142) and December 20, 1982 (P.L.1409, No.326), is amended to
24 read:
25 Section 603. Enforcement of orders relating to certificate of
26 need.
27 (a) (1) No certificate of need shall be granted to any
28 person for a new [institutional] health service unless such
29 new [institutional] health service is found by the department
30 to be needed.
19880H2459B3283 - 24 -
1 (2) Only those new [institutional] health services which
2 are granted certificates of need shall be offered or
3 developed within the Commonwealth by any person.
4 [(3) No expenditures in excess of $150,000 in
5 preparation for the offering or development of a new
6 institutional health service shall be made by any person
7 unless a certificate of need for such services or
8 expenditures has been granted.]
9 (4) No binding arrangement or commitment for financing
10 the offering or development of a new [institutional] health
11 service shall be made by any person unless a certificate of
12 need for such new [institutional] health service[, or the
13 preparation for the offering or development of the same] has
14 been granted.
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] health
23 service within this Commonwealth for which no certificate of
24 need has been obtained, after service of a cease and desist
25 order of the department, or after expiration of the time for
26 appeal of any final order on appeal, upon conviction thereof,
27 shall be sentenced to pay a fine of not less than $100 or more
28 than $1,000 and costs of prosecution. Each day of operating a
29 new [institutional] health service after issuance of a cease and
30 desist order shall constitute a separate offense.
19880H2459B3283 - 25 -
1 (e) Any person violating this act by a [willful] failure to
2 obtain a certificate of need, or [willfully] deviating from the
3 provisions of the certificate, or beginning construction, or
4 providing services, or acquiring equipment after the expiration
5 of a certificate of need shall be subject to a penalty of not
6 less than $100 per day and not more than $1,000 per day. Each
7 day after notice to them of the existence of such violation
8 shall be considered a separate offense.
9 (f) The department shall seek injunctive relief to prevent
10 continuing violations of this act.
11 (g) No license to operate a health care facility, health
12 maintenance organization, or new [institutional] health service
13 by any person in this Commonwealth shall be granted and any
14 license issued shall be void and of no effect as to any
15 facility, organization, service or part thereof for which a
16 certificate of need is required by this act and not granted.
17 [(h) No person shall acquire major medical equipment which
18 will not be owned or operated in a health care facility or
19 acquire an existing health care facility except in accordance
20 with this act.]
21 Section 10. Section 701 of the act, amended July 12, 1980
22 (P.L.655, No.136), is amended to read:
23 Section 701. Certificate of need required; new [institutional]
24 health services subject to review.
25 (a) No person shall offer, develop, construct, renovate or
26 otherwise establish or undertake to establish within the State a
27 [new institutional] clinically related health service without
28 [first obtaining] a certificate of need from the department[.
29 For purposes of this chapter, "new institutional health
30 services" shall include] when:
19880H2459B3283 - 26 -
1 [(1) The construction development or other establishment
2 of a new health care facility or health maintenance
3 organization.
4 (2) Any expenditure by or on behalf of a health care
5 facility or health maintenance organization in excess of
6 $150,000 which, under generally accepted accounting
7 principles consistently applied, is a capital expenditure.
8 Expenditures for acquisitions of existing health care
9 facilities and health maintenance organizations shall not be
10 included unless the notice required by subsection (i) of
11 section 702 is not filed or the department finds within 30
12 days of receipt of such notice that the services or bed
13 capacity of the health care facility will be changed in being
14 acquired. An acquisition by or on behalf of a health care
15 facility or health maintenance organization under lease or
16 comparable arrangement, or through donation, which would have
17 required review if the acquisition had been by purchase,
18 shall be deemed a capital expenditure subject to review.]
19 (1) (i) The cost of the service under generally
20 accepted accounting principles consistently applied is a
21 capital expenditure in excess of $2,000,000.
22 (ii) The service has not been previously offered by
23 or on behalf of the facility within the previous twelve-
24 month period.
25 (iii) The service increases the number of licensed
26 beds or redistributes the number of beds from one unit or
27 service to another.
28 (2) For the purposes of this act, an expenditure for the
29 purpose of acquiring an existing health care facility shall
30 not be considered to be a capital expenditure subject to
19880H2459B3283 - 27 -
1 review. The capital expenditure threshold identified above
2 shall be modified by the department at least annually, to
3 reflect any change in the United States Department of
4 Commerce Composite Construction Cost Index.
5 (3) [The obligation of any capital expenditure by or on
6 behalf of a health care facility which results in the
7 addition of a health service not provided in or through the
8 facility in the previous 12 months or which increases the
9 number of beds (or redistributes beds among various
10 categories other than levels of care in a nursing home, or
11 relocates such beds from one physical facility or site to
12 another) by more than ten beds or more than 10% of total bed
13 capacity, as defined by the regulations, whichever is less,
14 over a two-year period.] (i) A list of reviewable
15 clinically related health services shall be issued by the
16 department on an annual basis. Services shall be
17 considered reviewable where:
18 (A) the quality of the service to be offered is
19 likely to be compromised through insufficient volumes
20 or utilization;
21 (B) the service is dependent upon the
22 availability of scarce natural resources such as
23 human organs; or
24 (C) the operating costs associated with the
25 service are reimbursed by Medicare, medical
26 assistance or Blue Cross programs on a cost
27 reimbursement basis.
28 (ii) Within 30 days of the effective date of this
29 act, the department shall publish an interim list of new
30 health services, as defined under this act, which it has
19880H2459B3283 - 28 -
1 determined will be subject to review pursuant to the
2 provisions of subsection (a)(3). The interim list shall
3 apply to all proposals reviewed by the department on or
4 after the effective date of this act. The interim list of
5 new health services shall be effective for a period not
6 to extend beyond the first anniversary of the date upon
7 which the policy board was seated pursuant to this act.
8 (iii) With the exception of the reviewable list in
9 paragraph (3)(i) the list of reviewable services shall be
10 developed by the department after consultation with an ad
11 hoc multidisciplinary panel of experts appointed by the
12 policy board.
13 (iv) Any revisions in the list of new health
14 services shall not be effective until adopted as part of
15 the State health services plan.
16 [(4) The addition of a health service which is offered
17 in or through a health care facility having an operating
18 expense in excess of the minimum annual operating expense
19 established in accordance with Title XV of the Federal Public
20 Health Service Act, and which were not offered on a regular
21 basis in or through such health care facility or health
22 maintenance organization within the 12-month period prior to
23 the time such services would be offered.
24 (5) Major medical equipment not owned by or located in a
25 health care facility which will:
26 (i) be used to provide service for inpatients of a
27 health care facility; or
28 (ii) for which a notice was not provided in
29 accordance with subsection (i) of section 702.
30 (b) (1) Any expenditure by or on behalf of health care
19880H2459B3283 - 29 -
1 facilities or a health maintenance organization in excess of
2 $150,000 made in preparation for the offering or development
3 of a new institutional health service and any binding
4 arrangement or commitment by either of them for financing the
5 offering or development of the new institutional health
6 service shall be subject to review under this chapter.
7 (2) Nothing in this paragraph shall preclude the
8 department from granting a certificate of need which permits
9 expenditures only for predevelopment activities, but does not
10 authorize the offering or development of the new
11 institutional health service with respect to which such
12 predevelopment activities are proposed.
13 (c) Notwithstanding the provisions of subsection (a) or (b)
14 a new institutional health service acquired, owned or operated
15 by a health maintenance organization and home health care shall
16 be subject to the provisions of this act only to the extent
17 required by Federal law.
18 (d) As higher minimum expenditures requiring review are set
19 by the Federal Government, those limits shall immediately apply
20 in lieu of the minimum expenditure limits set by this act.]
21 (4) An office used exclusively for the private or group
22 practice by physicians or dentists or any other sponsor shall
23 be subject to review under this act only if the group or
24 private practice or other sponsor makes an expenditure in
25 excess of $2,000,000 which results in a clinically related
26 health care service or facility as defined in subsection
27 (a)(3); or if the group or private practice or other sponsor
28 adds a new health service or increases beds as defined in
29 subsection (a)(1). A facility providing treatment solely on
30 the basis of prayer or spiritual means in accordance with the
19880H2459B3283 - 30 -
1 tenets of any church or religious denomination, or a facility
2 conducted by a religious organization for the purpose of
3 providing health care services exclusively to clergy or other
4 persons in a religious profession who are members of the
5 religious denomination conducting the facility shall not be
6 considered to constitute a health service subject to review
7 under this act.
8 Section 11. Section 702 of the act, amended July 12, 1980
9 (P.L.655, No.136) and repealed in part December 20, 1982
10 (P.L.1409, No.326), is amended to read:
11 Section 702. Certificates of need; notice of intent;
12 application; issuance.
13 (a) Projects for facilities, services or equipment requiring
14 a certificate of need shall, at the earliest possible time in
15 their planning, be submitted to [the health systems agency and]
16 the department in a letter of intent in such detail advising of
17 the scope and nature of the project as required by regulations.
18 Within 30 days after receipt of the letter of intent, the
19 department shall inform the person providing the letter of
20 intent whether or not the proposed project is subject to a
21 certificate of need review. The department may extend the 30-day
22 time limit for reasonable cause if the provider of the letter of
23 intent is informed within 20 days of receipt of said letter by
24 the department. If the department determines that the project is
25 subject to a certificate of need review, the project shall be
26 subject to the remaining provisions of this act.
27 (b) A person desiring to obtain or amend a certificate of
28 need shall apply to the [local health systems agency, if any,
29 and to the] department [simultaneously] supplying to [them] it
30 such information as is required by rules and regulations. The
19880H2459B3283 - 31 -
1 [health systems agency and the] department shall have 20
2 business days after receipt of the application within which to
3 determine whether the application is complete and in which to
4 request specific further information. If further information is
5 requested, the [agency requiring the same] department shall
6 determine whether the application is complete within 15 business
7 days of receipt of the same. No information shall be required
8 that is not specified in the rules and regulations promulgated
9 by the department.
10 (c) Timely notice of the beginning of review of the
11 application by the [health systems agency] department shall be
12 sent with the notice of a completed application, upon the
13 expiration of the time to determine that an application is
14 complete, or 60 days or more after the filing of the application
15 upon written demand by the applicant that review begin,
16 whichever shall first occur, and the review shall be completed
17 within 60 days of the "date of notification" unless the
18 applicant agrees in writing to a specified extension of time for
19 the review by the [health systems agency] department. [A health
20 systems agency shall have, at least, 60 days to complete its
21 review unless the health systems agency waives such time in
22 writing.] The department shall have 60 days to complete its
23 review unless the department waives such time in writing. The
24 "date of notification" of the beginning of review shall be the
25 date such notice is sent, or the date such notice is published
26 in the Pennsylvania Bulletin or in a newspaper of general
27 circulation, whichever is later.
28 (d) The department shall [consider the timely filed
29 recommendations or objections of the health systems agency in
30 reviewing the application and shall] approve or disapprove the
19880H2459B3283 - 32 -
1 application, unless there is an agreed extension in writing,
2 within [30] 60 days from [receipt of the health systems agency
3 report or report on a hearing for reconsideration before the
4 health systems agency, whichever is later, or upon the
5 expiration of the time for filing the same] the last day of the
6 time period identified in subsection (c). [If no action is taken
7 within the time permitted the department to make its findings,
8 the applicant may, following expiration of that time period,
9 bring an action in Court to require the department to approve or
10 disapprove the application and the court shall promptly issue
11 such an order upon proof that the period has been exceeded. If
12 permitted by amendment of the Federal law or regulation any
13 application upon which action is not taken within the prescribed
14 time shall be deemed needed and the department shall have no
15 right of appeal with respect thereto] The department may request
16 only one extension of a term not to exceed 30 days unless there
17 is reasonable cause to seek additional extensions. No new
18 [institutional] health service shall be granted a certificate of
19 need unless found or deemed to be found needed by the department
20 or on appeal therefrom.
21 (e) (1) Certificates of need shall be granted or refused.
22 They shall not be conditioned upon the applicant changing
23 other aspects of its facilities or services or requiring the
24 applicant to meet other specified requirements, and no such
25 condition shall be imposed by the department [or the health
26 systems agency] in granting or refusing approval or
27 recommendation.
28 (2) A certificate of need shall state the maximum amount
29 of expenditures which may be obligated under it and
30 applicants proceeding with an approved project may not exceed
19880H2459B3283 - 33 -
1 this level of expenditure except as allowed under the
2 conditions and procedures established by the department
3 through regulation.
4 (f) (1) The department shall make written findings which
5 state the basis for any final decision made by the
6 department. Such findings shall be served upon the
7 applicant[, the health systems agency or agencies,] and all
8 parties to the proceedings, and shall be made available to
9 others upon request.
10 (2) All decisions of the department shall be based
11 solely on the record. [No ex parte contact regarding the
12 application between any employee of the department who
13 exercises responsibilities respecting the application and the
14 applicant, any person acting on behalf of the applicant or
15 any person opposed to the issuance of the certificate of need
16 shall occur after the commencement of a hearing on the
17 application and before a decision is made by the department.
18 (g) When the department makes a decision regarding the
19 proposed new institutional health service which is inconsistent
20 with the recommendation made with respect thereto by a health
21 systems agency, or with the applicable health systems plan or
22 annual implementation plan, the department shall submit to such
23 health systems agency and all parties to the proceeding a
24 written, detailed statement of the reasons for the
25 inconsistency.]
26 (h) Modification of the application at any stage of the
27 proceeding shall not extend the time limits provided by this act
28 unless the [health systems agency] department expressly finds
29 that the modification represents a substantial change in the
30 character of the application.
19880H2459B3283 - 34 -
1 (h.1) The responsibility of performing certificate of need
2 review may not be delegated by the department to any local or
3 regional entity.
4 [(i) (1) Before any person enters into a contractual
5 arrangement to acquire major medical equipment which will not
6 be owned by or located in a health care facility or before
7 any person acquires an existing health care facility, such
8 person shall notify the department of such person's intent to
9 acquire such equipment or existing health care facility.
10 (2) The notice shall be in writing in a form specified
11 by the department and shall be made at least 30 days before
12 contractual arrangements are entered into to acquire the
13 major medical equipment or the existing health care facility.
14 (3) In the case of the intended acquisition of major
15 medical equipment, the notice shall contain information
16 regarding the use that will be made of the equipment. In the
17 case of the intended acquisition of an existing health care
18 facility, the notice shall contain information with regard to
19 the services to be offered in the facility and its bed
20 capacity.
21 (4) Within 30 days after the receipt of the notice, the
22 department shall inform the person providing the notice
23 whether or not the proposed acquisition is a new
24 institutional health service. If the department determines
25 that the acquisition will be a new institutional health
26 service, the acquisition shall be subject to the remaining
27 provisions of this act.
28 (5) A decision of the department that an acquisition
29 requires a certificate of need may be appealed to the Health
30 Facility Hearing Board.]
19880H2459B3283 - 35 -
1 (j) [(1)] The department [shall] may provide for categories
2 of projects which shall receive simultaneous and comparative
3 review [and periods in which applications for such projects
4 must be received (and prohibiting submission of applications
5 outside such periods)]. The time between the beginning of any
6 such period and the beginning of the next succeeding period
7 for submission of applications for any category shall not
8 exceed [four] six months. [No project shall be subject to
9 such submission limitations if a notice of intent to submit
10 an application for the project is submitted prior to the
11 publication in the Pennsylvania Bulletin of a notice of
12 proposed rule making by the department to establish a
13 category subject to submission limitations.
14 (2) The following projects shall be exempt from any of
15 the above batching provisions set forth in paragraph (1):
16 (i) Replacement of equipment not involving a
17 substantial change in functional capacity or capability.
18 (ii) Renovations necessary to meet code requirements
19 which do not expand the capacity of the facility or
20 involve the addition of new services.
21 (iii) Repairs or reconstruction in the cases of
22 emergency.
23 (iv) Installation of equipment or renovations which
24 will save energy but which do not expand the capacity of
25 the facility or involve the addition of a new service.]
26 Section 12. Section 703 of the act is repealed.
27 Section 13. Section 704 of the act, amended July 12, 1980
28 (P.L.655, No.136), is amended to read:
29 Section 704. [Hearings before the department] Notice and public
30 meetings.
19880H2459B3283 - 36 -
1 [(a) The function of holding a public hearing is hereby
2 delegated to the appropriate HSA unless the department and the
3 HSA agree otherwise in writing in a particular case. If a public
4 hearing has been held by the health systems agency, no hearing
5 shall be held by the department in reaching its final decision.
6 If there has been no provision for such hearings before the
7 health systems agency, the department shall provide notice of a
8 public hearing and conduct that hearing in accordance with the
9 provisions of section 703(b).]
10 (a.1) Notice of completed applications for certificates of
11 need or amendment thereto and of the beginning of review shall
12 be published by the department in the appropriate news media and
13 in the Pennsylvania Bulletin in accordance with 45 Pa.C.S. Ch. 7
14 Subch. B (relating to publication of documents). Such notice
15 shall identify the schedule for review, the date by which a
16 public meeting must be demanded, and of the manner notice will
17 be given of a meeting, if one is held. The department shall also
18 give notice by mail, which may be part of a newsletter, to
19 groups or individuals such as businesses or labor health
20 coalitions located in the service area proposed to be served by
21 the applicant and who have advised the department in writing of
22 their desire to be notified. Directly affected persons may file
23 objections within 15 days of such publication with the
24 department setting forth specifically the reason such objections
25 were filed. Such persons filing the objections shall be parties
26 to the proceeding unless and until such objections are
27 withdrawn.
28 (a.2) Interested parties may request a public meeting or the
29 department may require a public meeting during the course of
30 such review. Meetings shall be held in the region in which the
19880H2459B3283 - 37 -
1 applicant is located. Fourteen days' written notice of the
2 meeting shall be given to directly affected persons in the same
3 manner as a notice of a completed application is provided in
4 subsection (a.1). In the meeting, a directly affected person and
5 those persons who registered under section 601(f.1) shall have
6 the right to be represented by counsel and to present oral or
7 written arguments and relevant evidence. A summary report of the
8 meeting shall be prepared. Meetings shall be held in accordance
9 with the rules and regulations promulgated by the department.
10 (b) [Any person] The applicant may, for good cause shown,
11 request, in writing, a public [hearing] meeting for the purpose
12 of reconsideration of a decision of the department within ten
13 days of service of the decision of the department. The
14 department shall treat the request in accordance with the
15 provisions of 1 Pa. Code § 35.241 (relating to application for
16 rehearing or reconsideration). The department shall set forth
17 the cause for the [hearing] meeting and the issues to be
18 considered at such [hearing] meeting. If such [hearing] meeting
19 is granted, it shall be held no sooner than six days and no
20 later than [14] 21 days after such [request] grant is made, and
21 may be limited to the issues submitted for reconsideration. A
22 summary of the oral testimony shall be made of the [hearing]
23 meeting, and copies thereof supplied at cost to the parties. The
24 department shall affirm or reverse its decision and submit the
25 same to the parties and the persons requesting the [hearing, and
26 the health systems agency] meeting within 14 days of the
27 conclusion of such [hearing] meeting. Any change in the decision
28 shall be supported by the reasons therefor.
29 (c) Where [hearings] meetings under subsection (b) are held
30 on more than two days, consecutive days of [hearings] meetings
19880H2459B3283 - 38 -
1 and intervening weekends and holidays shall be excluded in
2 calculating the time permitted for the department to conduct its
3 review, and if briefs are to be filed, ten days subsequent to
4 the adjournment of the [hearing] meeting shall also be excluded.
5 Section 14. Section 706 of the act is amended to read:
6 Section 706. Information during review.
7 During the course of review [the health systems agency and]
8 the department shall upon request of any person, set forth the
9 status, any findings then made in the proceeding and other
10 appropriate information requested. During the course of a
11 certificate of need review, the department shall respond in
12 writing to any questions or comments raised in the public
13 meeting in subsections (a) and (b).
14 Section 15. Sections 707, 708 and 711 of the act, amended
15 July 12, 1980 (P.L.655, No.136), are amended to read:
16 Section 707. Criteria for review of applications for
17 certificates of need or amendments.
18 (a) [An application for a certificate of need shall be
19 recommended, approved, and issued when the application
20 substantially meets the requirements listed below; provided that
21 each decision, except in circumstances which pose a threat to
22 public health, shall be consistent with the State health plan:
23 (1) The relationship of the application with the
24 applicable health systems plan and annual implementation plan
25 has been considered.
26 (2) The services are compatible to the long-range
27 development plan (if any) of the applicant.
28 (3) There is a need by the population served or to be
29 served by the services.
30 (4) There is no appropriate, less costly, or more
19880H2459B3283 - 39 -
1 effective alternative methods of providing the services
2 available.
3 (5) The service or facility is economically feasible,
4 considering anticipated volume of care, the capability of the
5 service area to meet reasonable charges for the service or
6 facility and the availability of financing.
7 (6) The proposed service or facility is financially
8 feasible both on an intermediate and long term basis and the
9 impact on cost of and charges for providing services by the
10 applicant is appropriate.
11 (7) The proposed service or facility is compatible with
12 the existing health care system in the area.
13 (8) The service or facility is justified by community
14 need and within the financial capabilities of the institution
15 both on an intermediate and long term basis and will not have
16 an inappropriate, adverse impact on the overall cost of
17 providing health services in the area.
18 (9) There are available resources (including health
19 manpower, management personnel, and funds for capital and
20 operating needs) to the applicant for the provision of the
21 services proposed to be provided, and there is no greater
22 need for alternative uses for such resources for the
23 provision of other health services. The effect on the
24 clinical needs of health professional training programs in
25 the medical service area, the extent to which health
26 professional schools in the medical service area will have
27 access to the services for training purposes and the extent
28 to which the proposed service will be accessible to all
29 residents of the area to be served by such services have been
30 considered.
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1 (10) The proposed service or facility will have
2 available to it appropriate ancillary and support services
3 and an appropriate organizational relationship to such
4 services.
5 (11) The proposed services are consistent with the
6 special needs and circumstances of those entities which
7 provide services or resources both within and without the
8 health service area in which the proposed services are to be
9 located, including medical and other health professional
10 schools, multidisciplinary clinics, and specialty centers.
11 (12) The special needs and circumstances of health
12 maintenance organizations shall be considered to the extent
13 required by Federal law and regulation now or hereafter
14 enacted or adopted.
15 (13) The proposed services are not incompatible with any
16 biomedical or behavioral research projects designed for
17 national need for which local conditions offer special
18 advantages.
19 (14) Consideration of the need and availability in the
20 community for services and facilities for allopathic and
21 osteopathic physicians and their patients; and the religious
22 orientation of the facility and the religious needs of the
23 community to be served. This provision is not intended to
24 create duplicative systems of care.
25 (15) The factors which affect the effect of competition
26 on the supply of health services being reviewed with
27 particular reference to the existence and the capacity of
28 market conditions in advancing the purposes of quality
29 assurance, cost containment and responsiveness to consumer
30 preferences and the existence and capacity of utilization
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1 review programs and other public and private cost control
2 measures to give effect to consumer preferences and to
3 establish appropriate incentives for capital allocations have
4 been considered.
5 (16) Improvements or innovations in the financing and
6 delivery of health services which foster competition and
7 serve to promote quality assurance, cost effectiveness and
8 responsiveness to consumer preferences have been given
9 preference.
10 (17) The efficiency and appropriateness of the use of
11 existing services and facilities similar to those proposed
12 has been considered.
13 (18) In the case of existing services for facilities,
14 the quality of care provided by services or facilities in the
15 past has been considered.
16 (19) The contribution of the proposed new institutional
17 health service in meeting the health related needs of members
18 of medically underserved groups has been considered in
19 written findings.
20 (20) The special circumstances of applications with
21 respect to the need for conserving energy have been
22 considered.
23 (b) If the application is for a proposed service or facility
24 which includes a construction project, a certificate of need
25 shall be recommended, approved and issued when the provisions of
26 subsection (a) are satisfied, and:
27 (1) the costs and methods of proposed construction
28 including the costs and methods of energy provision are
29 appropriate; and
30 (2) the impact on the costs of providing health services
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1 by the applicant resulting from the construction is found to
2 be appropriate and the impact on the costs and charges to the
3 public of providing health services by other persons is found
4 to be not inappropriate.
5 (c) Whenever new institutional health services for
6 inpatients are proposed, a finding shall be made in writing by
7 the reviewing authority:
8 (1) as to the efficiency and appropriateness of the
9 existing use of the inpatient facilities similar to those
10 proposed;
11 (2) as to the capital and operating costs, efficiency
12 and appropriateness of the proposed new service and its
13 potential impact on patient charges;
14 (3) that less costly alternatives which are more
15 efficient and more appropriate to such inpatient service are
16 not available and the development of such alternatives has
17 been studied and found not practicable;
18 (4) that existing inpatient facilities providing
19 inpatient services similar to those proposed are being used
20 in an appropriate and efficient manner;
21 (5) that in the case of new construction, alternatives
22 to new construction such as modernization or sharing
23 arrangements have been considered and have been implemented
24 to the maximum extent practicable;
25 (6) that patients will experience serious problems in
26 terms of cost, availability, accessibility or such other
27 problems as are identified by the reviewing agency in
28 obtaining inpatient care of the type proposed in the absence
29 of the proposed new service; and
30 (7) that in the case of a proposal for the addition of
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1 beds for the provision of skilled nursing or intermediate
2 care services, the addition will be consistent with the plans
3 of the agency, if any, that is responsible for the provision
4 and financing of long-term care services.
5 A certificate of need shall be issued for inpatient services
6 when the provisions of subsections (a) and (b) are satisfied and
7 the findings of this subsection can be made.
8 (d)] An application for certificate of need shall be
9 considered for approval when the application substantially meets
10 the requirements listed below:
11 (1) There is need by the population served or to be
12 served by the proposed service or facility.
13 (2) The proposed service or facility will provide
14 quality care consistent with quality standards established by
15 the State health services plan.
16 (3) The proposed service or facility will meet the
17 health-related needs of medically underserved groups.
18 (b) The department shall issue a certificate of need if the
19 project substantially meets criteria (1), (2) and (3) and the
20 additional criteria listed below:
21 (1) There is no more appropriate, less costly or more
22 effective alternative method of providing the proposed
23 service.
24 (2) The service or facility is financially and
25 economically feasible, considering anticipated volume of care
26 and the availability of reasonable financing.
27 (3) The proposed service or facility will not have an
28 inappropriate, adverse impact on the overall level of health
29 care expenditures in the area.
30 (c) Notwithstanding the provisions of subsections (a)[,] and
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1 (b) [and (c)], applications for projects described in subsection
2 [(e)] (d) shall be approved unless the department finds that the
3 facility or service with respect to such expenditure as proposed
4 is not needed or that the project is not consistent with the
5 State health services plan. An application made under this
6 subsection shall be approved only to the extent required to
7 overcome the conditions described in subsection [(e)] (d).
8 [(e)] (d) Subject to the provisions of subsection [(d)] (c),
9 subsections (a)[,] and (b) [and (c)] shall not apply to capital
10 expenditures required to:
11 (1) Eliminate or prevent imminent safety hazards as
12 safety codes or regulations.
13 (2) Comply with State licensure standards.
14 (3) Comply with accreditation standards, compliance with
15 which is required to receive reimbursement or payments under
16 Title XVIII or XIX of the Federal Social Security Act.
17 Section 708. Withdrawal of certificate of need.
18 An application for a certificate of need shall specify the
19 time the applicant will require to make the service or equipment
20 available or to obligate the expenditure and a timetable for
21 making the service or equipment available or obligating the
22 expenditure. The department shall periodically review the
23 progress of the holder of the certificate of need in meeting the
24 timetable specified in the approved application. If on the basis
25 of this review the department determines that the holder of the
26 certificate of need is not meeting the timetable and is not
27 making a good faith effort to meet it, the department may[,
28 after considering any recommendation made by the appropriate
29 HSA,] withdraw the certificate of need. In withdrawing a
30 certificate pursuant to this section, the department shall
19880H2459B3283 - 45 -
1 follow the procedures set forth in sections 702, 703 and 704.
2 Section 711. Review of activities.
3 (a) The department [and each health systems agency] shall
4 prepare and publish not less frequently than annually reports of
5 reviews conducted under this act, including a statement on the
6 status of each such review and of reviews completed by them,
7 including statements of the [finding and] decisions made in the
8 course of such reviews since the last report. The department
9 [and each health systems agency] shall also make available to
10 the general public for examination at reasonable times of the
11 business day all applications reviewed by [them and all written
12 materials on file at the agency pertinent to such review] it.
13 (b) The [department in its] department's report which shall
14 be submitted to the members of the Health and Welfare Committees
15 of the Senate and House of Representatives shall contain the
16 following information [classified by health system areas]:
17 (1) The volume of applications submitted, by project
18 type, their dollar value, and [the numbers and] the costs,
19 quality, access and interprovider cooperation issues
20 associated with those approved and those not approved.
21 (2) An estimate of the operating cost impact of the
22 approved projects.
23 (3) The average time for review, by project type.
24 [(4) The assessment of the extent of competition in
25 specific service sectors that guided decisions.
26 (5) A detailed description of projects involving
27 nontraditional or innovative service delivery methods or
28 organizational arrangements and the decisions made on each of
29 these projects.]
30 Section 16. The act is amended by adding sections to read:
19880H2459B3283 - 46 -
1 Section 905.1. Termination.
2 This act and the authority, obligations and duties arising
3 hereunder, with the exception of those arising under Chapter 8,
4 shall expire four years after the effective date of this
5 section.
6 Section 905.2. Fees for review of certificate of need
7 applications.
8 For each application the department shall charge a fee,
9 payable on submission of a complete application, which shall be
10 reasonably based upon the costs incurred in a review of said
11 applications but shall not be less than $500 plus up to $4 per
12 $1,000 of proposed capital expenditure and shall not be more
13 than $25,000.
14 Section 905.3. Use of fees.
15 All fees and other moneys paid under sections 506 and 905.2
16 of this act shall be placed in a separate restricted revenue
17 account within the General Fund. The funds deposited in the
18 Certificate of Need Restricted Account within the General Fund
19 are hereby annually appropriated out of the account upon
20 authorization by the Governor for expenditure by the Department
21 of Health. The funds shall be used solely for any contingent,
22 incidental, or any other expense of any kind or description
23 reasonably necessary in carrying out this act.
24 Section 905.4. Audit of moneys.
25 (a) Funds in the account may be expended only for the
26 purposes authorized by this act.
27 (b) The department shall submit an annual written and oral
28 report to the Health and Welfare Committee of the Senate and
29 Public Health and Welfare Committee of the House of
30 Representatives no later than September 30 of each year. The
19880H2459B3283 - 47 -
1 written report shall include complete budgets for the current
2 fiscal year about to commence. An audit of the budget for the
3 concluding fiscal year shall be conducted by the Auditor General
4 and shall be submitted to the department no later than September
5 30 of each year.
6 (c) The department shall submit to the Governor for approval
7 or disapproval estimates of the amount of moneys to be expended
8 from the Certificate of Need Restricted Account. No requisition
9 for expenditure of any moneys in excess of the amount approved
10 by the Governor shall be honored without the approval of the
11 Governor.
12 Section 17. This act shall take effect in 60 days.
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