PRINTER'S NO. 346
No. 305 Session of 2007
INTRODUCED BY MUNDY, BELFANTI, BISHOP, BUXTON, CALTAGIRONE, CARROLL, DeLUCA, DePASQUALE, FRANKEL, FREEMAN, GEORGE, GOODMAN, GRUCELA, HESS, JAMES, JOSEPHS, KIRKLAND, KORTZ, MAHONEY, MANDERINO, MANN, MELIO, MUSTIO, OLIVER, PALLONE, ROEBUCK, SANTONI, SCAVELLO, TANGRETTI, J. TAYLOR, THOMAS, WALKO AND YOUNGBLOOD, FEBRUARY 7, 2007
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES, FEBRUARY 7, 2007
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 10 definitions, for powers and duties of Department of Health, 11 for State health services plan, for regulations, for 12 certificates of need and for sunset; and prohibiting certain 13 referrals and claims of payment. 14 The General Assembly of the Commonwealth of Pennsylvania 15 hereby enacts as follows: 16 Section 1. Section 103 of the act of July 19, 1979 (P.L.130, 17 No.48), known as the Health Care Facilities Act, amended 18 December 18, 1992 (P.L.1602, No.179) and October 16, 1998 19 (P.L.777, No.95), is reenacted and amended to read: 20 Section 103. Definitions. 21 The following words and phrases when used in this act shall
1 have, unless the context clearly indicates otherwise, the 2 meanings given to them in this section: 3 "Act." The comprehensive Health Care Facilities Act. 4 "Board." The Health Policy Board established under section 5 401.1. 6 "Certificate of need." A notice of approval issued by the 7 [department] Department of Health under the provisions of this 8 act, including those notices of approval issued as an amendment 9 to an existing certificate of need. 10 "Certification of need (CON) review board." The CON review 11 board which consists of technical experts in the fields of 12 medicine, health facility administration, health economics, 13 health care cost inflation and the like, including experts from 14 within the Commonwealth agencies, together with consumers of 15 health care, all of whom are appointed by the Secretary of 16 Health. 17 "Clinically related health service." Certain diagnostic, 18 treatment or rehabilitative services as determined in section 19 701. 20 ["Community-based health services planning committee." A 21 committee established in accordance with procedures approved by 22 the Department of Health which includes representatives of local 23 or regional groups of consumers, business, labor, health care 24 providers, payors or other affected interests.] 25 "Conflict of interest." [For the purpose of section 501, 26 the] The interest of any person, whether financial, by 27 association with, or as a contributor of money or time to, any 28 nonprofit corporation or other corporation, partnership, 29 association, or other organization, and whenever a person is a 30 director, officer or employee of such organization, but shall 20070H0305B0346 - 2 -
1 not exist whenever the organization in which such person is 2 interested is being considered as part of a class or group for 3 whom regulations are being considered, if the material facts as 4 to the relationship or interest are disclosed or are known to 5 the board. 6 "Consumer." A natural person who is not involved in the 7 provision of health services or health insurance. For the 8 purpose of this act, any person who holds a fiduciary position 9 in any health care facility, health maintenance organization or 10 third party payor shall not be considered a consumer. 11 "Council." The Pennsylvania Health Care Cost Containment 12 Council. 13 "Department." The Department of Health of the Commonwealth. 14 "Develop." When used in connection with health services or 15 facilities, means to undertake those activities which on their 16 completion will result in the offer of a new health service or 17 the incurring of a financial obligation in relation to the 18 offering of such a service. 19 "Health care facility." [For purposes of Chapter 7, any] A 20 health care facility providing clinically related health 21 services, including, but not limited to, a general or special 22 hospital, including psychiatric hospitals, rehabilitation 23 hospitals, ambulatory surgical facilities, diagnostic imaging 24 centers, MRI facilities, long-term care nursing facilities, 25 cancer treatment centers using radiation therapy on an 26 ambulatory basis and inpatient drug and alcohol treatment 27 facilities, both profit and nonprofit and including those 28 operated by an agency or State or local government. The term 29 shall also include a hospice. The term shall not include an 30 office used primarily for the private or group practice by 20070H0305B0346 - 3 -
1 health care practitioners where no reviewable clinically related
2 health service is offered, a facility providing treatment solely
3 on the basis of prayer or spiritual means in accordance with the
4 tenets of any church or religious denomination or a facility
5 conducted by a religious organization for the purpose of
6 providing health care services exclusively to clergy or other
7 persons in a religious profession who are members of the
8 religious denominations conducting the facility.
9 "Health care practitioner." An individual who is authorized
10 to practice some component of the healing arts by a license,
11 permit, certificate or registration issued by a Commonwealth
12 licensing agency or board.
13 "Health care provider" or "provider." An individual, a trust
14 or estate, a partnership, a corporation (including associations,
15 joint stock companies and insurance companies), the
16 Commonwealth, or a political subdivision or instrumentality
17 (including a municipal corporation or authority) thereof, that
18 operates a health care facility.
19 "Health planning area." A geographic area within the
20 Commonwealth designated by the Department of Health for purposes
21 of health planning.
22 "Hearing board." The State Health Facility Hearing Board
23 created in the Office of General Counsel under the provisions of
24 this act.
25 "Interested person" or "person expressing an interest." [For
26 the purposes of Chapter 7, a] A member of the public who is to
27 be served by the proposed new health service in the area to be
28 served by the applicant, a health care facility or health
29 maintenance organization or any health care provider providing
30 similar services in the area to be served by the applicant or
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1 who has received a certificate of need to provide services in 2 the area to be served by the applicant or who has formally filed 3 with the [department] Department of Health a letter of intent to 4 provide similar services in the area in which the proposed 5 service is to be offered or developed and any third party payor 6 of health services provided in that area who provides written 7 notice to the [department] Department of Health that the person 8 is interested in a specific certificate of need application 9 before the [department] Department of Health. 10 "Local review committee." A committee established in 11 accordance with procedures approved by the Department of Health 12 which includes representatives of local or regional groups of 13 consumers, business, labor, health care providers, payors or 14 other affected interests. 15 "Offer." Make provision for providing in a regular manner 16 and on an organized basis clinically related health services. 17 "Patient." A natural person receiving health care in or from 18 a health care provider. 19 "Person." A natural person, corporation (including 20 associations, joint stock companies and insurance companies), 21 partnership, trust, estate, association, the Commonwealth, and 22 any local governmental unit, authority and agency thereof. 23 "Policy board." The Health Policy Board created in the 24 Department of Health under the provisions of this act. 25 "Public meeting." A meeting open to the public where any 26 person has an opportunity to comment on a certificate of need 27 application or proposed State health services plan amendment. 28 "Secretary." The Secretary of [the Department of] Health of 29 the Commonwealth of Pennsylvania. 30 ["State health services plan." A document developed by the 20070H0305B0346 - 5 -
1 Department of Health, after consultation with the policy board 2 and approved by the Governor, that is consistent with section 3 401.3, that meets the current and projected needs of the 4 Commonwealth's citizens. The State health services plan shall 5 contain, in part, the standards and criteria against which 6 certificate of need applications are reviewed and upon which 7 decisions are based.] 8 "Third party payor." A person who makes payments on behalf 9 of patients under compulsion of law or contract who does not 10 supply care or services as a health care provider or who is 11 engaged in issuing any policy or contract of individual or group 12 health insurance or hospital or medical service benefits. The 13 term shall not include the Federal, State, or any local 14 government unit, authority, or agency thereof or a health 15 maintenance organization. 16 Section 2. Sections 201 and 401.3 of the act, amended or 17 added December 18, 1992 (P.L.1602, No.179), are reenacted and 18 amended to read: 19 Section 201. Powers and duties of the department. 20 The Department of Health shall have the power and its duties 21 shall be: 22 (1) To exercise exclusive jurisdiction over health care 23 providers in accordance with the provisions of this act. 24 (2) To issue determinations of reviewability or 25 nonreviewability of certificate of need proposals. 26 (2.1) To develop qualitative and quantitative standards 27 and criteria for the review and approval of certificate of 28 need applications. 29 (3) To issue certificates of need and amended 30 certificates of need in accordance with the provisions of 20070H0305B0346 - 6 -
1 this act. 2 (4) To withdraw expired certificates of need. 3 (5) 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 [(6) Upon consultation with the policy board, to 8 research, prepare and, after approval by the Governor, 9 publish, no later than 18 months after the effective date of 10 this act and annually thereafter, a revised State health 11 services plan for the Commonwealth as defined under this act. 12 Until the State health services plan as defined in section 13 401.3 is adopted, the department shall apply the State health 14 plan in existence on the effective date of this act, along 15 with any subsequent updates to that plan.] 16 (6.1) To develop a certificate of need exceptions 17 process which permits exceptions to be granted to the 18 standards and criteria in order to reflect local experience 19 or ensure access or to respond to circumstances which pose a 20 threat to public health and safety. The exceptions process 21 shall begin only after the department issues a denial of a 22 certificate of need application. All exceptions must be 23 publicly disclosed. This provision creates no right or 24 entitlement to an exception. 25 (7) To collect and disseminate such other information as 26 may be appropriate to determine the appropriate level of 27 facilities and services for the effective implementation of 28 certification of need under this act. Where such information 29 is collected by any other agency of State government, 30 duplication shall be avoided by coordination of data 20070H0305B0346 - 7 -
1 collection activities[.], if such coordination does not 2 otherwise unduly burden those State agencies. 3 [(8) To furnish such staff support and expertise to the 4 policy board as may be needed to perform its 5 responsibilities.] 6 (9) To receive, log and review all applications for 7 certificates of need or amendments thereof and approve or 8 disapprove the same. 9 (10) To minimize the administrative burden on health 10 care providers by eliminating unnecessary duplication of 11 financial and operational reports and to the extent possible 12 and without undue burden coordinating reviews and inspections 13 performed by Federal, State, local and private agencies. 14 (11) To adopt and promulgate regulations necessary to 15 carry out the purposes and provisions of this act relating to 16 certificate of need. 17 (12) To enforce the rules and regulations promulgated by 18 the department as provided in this act. 19 (13) To provide technical assistance to individuals and 20 public and private entities in filling out the necessary 21 forms for the development of projects and programs. 22 (14) To establish and publish in the Pennsylvania 23 Bulletin a fee schedule for certificate of need applications 24 and letters of intent in accordance with section 902.1. 25 (15) To coordinate any data collection activities 26 necessary for administration of this act so as not to 27 duplicate unnecessarily the data collection activities of 28 other Federal and State agencies. 29 (16) To modify the list of reviewable clinically related 30 health services established under section 701. 20070H0305B0346 - 8 -
1 (17) To establish and publish in the Pennsylvania 2 Bulletin a detailed schedule of the review process for each 3 certificate of need application submitted to the department. 4 Section 401.3. State health [services] improvement plan. 5 The State health [services] improvement plan shall consist of 6 at a minimum: 7 (1) An identification of the clinically related health 8 services necessary to serve the health needs of the 9 population of this Commonwealth, including those medically 10 underserved areas in rural and inner-city locations. 11 (2) An analysis of the availability, accessibility and 12 affordability of the clinically related health services 13 necessary to meet the health needs of the population of this 14 Commonwealth. 15 [(3) Qualitative and quantitative standards and criteria 16 for the review of certificate of need applications by the 17 department under this act. 18 (4) An exceptions process which permits exceptions to be 19 granted to the standards and criteria in order to reflect 20 local experience or ensure access or to respond to 21 circumstances which pose a threat to public health and 22 safety.] 23 Section 3. Section 602 of the act is reenacted to read: 24 Section 602. Regulations. 25 The department is hereby authorized and empowered pursuant to 26 the provisions of this act to adopt rules and regulations 27 establishing procedures required by this act for administration 28 of certificate of need. 29 Section 4. Sections 603, 701 and 702 of the act, amended 30 December 18, 1992 (P.L.1602, No.179), are reenacted and amended 20070H0305B0346 - 9 -
1 to read: 2 Section 603. Enforcement of orders relating to certificate of 3 need. 4 (a) (1) No certificate of need shall be granted to any 5 person for a health care facility or reviewable clinically 6 related health service unless such facility or clinically 7 related health service is found by the department and CON 8 review board to be needed. 9 (2) No person shall offer or develop a health care 10 facility or reviewable clinically related health service 11 without obtaining a certificate of need as required by this 12 act. 13 (3) No binding arrangement or commitment for financing 14 the offering or development of a health care facility or 15 reviewable clinically related health service shall be made by 16 any person unless a certificate of need for such clinically 17 related health service or facility has been granted in 18 accordance with this act. 19 (b) Orders for which the time of appeal has expired shall be 20 enforced by the department and the CON review board in summary 21 proceedings or, when necessary, with the aid of the court. 22 (c) No [collateral attack on any order, including] questions 23 relating to jurisdiction shall be permitted in the enforcement 24 proceeding, but such relief may be sought when such relief has 25 not been barred by the failure to take a timely appeal. 26 (d) Any person operating a reviewable clinically related 27 health service or health care facility within this Commonwealth 28 for which no certificate of need has been obtained, after 29 service of a cease and desist order of the department, [or after 30 expiration of the time for appeal of any final order on appeal, 20070H0305B0346 - 10 -
1 upon conviction thereof,] shall be [sentenced to pay] subject to 2 a fine of not less than [$100] $1,000 or more than [$1,000] 3 $10,000 and costs of [prosecution] enforcement. Each day of 4 operating a clinically related health service or health care 5 facility after issuance of a cease and desist order shall 6 constitute a separate offense. 7 (e) Any person who violates this act by failing to obtain a 8 certificate of need, by deviating from the provisions of the 9 certificate, by beginning construction, by providing services, 10 or by acquiring equipment after the expiration of a certificate 11 of need shall be subject to a penalty of not less than [$100] 12 $1,000 per day and not more than [$1,000] $10,000 per day. Each 13 day of each such violation shall be considered a separate 14 offense. 15 (f) The department may seek injunctive relief to prevent 16 continuing violations of this act. In seeking such relief, the 17 department need not prove damages or irreparable harm. 18 (g) No license to operate a health care facility or 19 reviewable clinically related health service by any person in 20 this Commonwealth shall be granted and any license issued shall 21 be void and of no effect as to any facility, organization, 22 service or part thereof for which a certificate of need is 23 required by this act and not granted. 24 Section 701. Certificate of need required; clinically related 25 health services subject to review. 26 (a) Any person, including, but not limited to, a health care 27 facility, health maintenance organization or health care 28 provider who offers, develops, constructs, renovates, expands or 29 otherwise establishes or undertakes to establish within the 30 State a clinically related health service that is included in 20070H0305B0346 - 11 -
1 the department's list of reviewable services developed under 2 subsections (d) and (e) or a health care facility as defined in 3 section 103 must obtain a certificate of need from the 4 department and CON review board if one or more of the following 5 factors applies: 6 (1) [The proposal requires a capital expenditure in 7 excess of $2,000,000 under] Under generally accepted 8 accounting principles, consistently applied[.], the proposal 9 requires a capital expenditure in excess of: 10 (i) for a new high-cost technology or high-cost 11 replacement technology in any health care facility, 12 $500,000; 13 (ii) for equipment or other facility improvements in 14 an ambulatory surgical facility, or in an office where 15 reviewable clinically related health care services are 16 offered, whether a free-standing facility or office 17 within a hospital, $1,000,000; or 18 (iii) for any other hospital-based improvement, 19 $2,000,000. 20 (2) The proposal involves the establishment of a health 21 care facility or a reviewable clinically related health 22 service. 23 (3) The proposal increases the number of licensed beds 24 by more than ten beds or 10%, whichever is less, every two 25 years. 26 (i) If the additional beds are acute care beds and 27 are not beds in a distinct-part psychiatric, 28 rehabilitation or long-term care unit, all licensed beds 29 of the acute-care facility shall be counted in 30 determining whether the increased number of beds exceeds 20070H0305B0346 - 12 -
1 10%.
2 (ii) If the additional beds are beds in a distinct-
3 part psychiatric, rehabilitation or long-term care unit
4 of an acute care facility, only the beds within that unit
5 shall be counted in determining whether the increased
6 number of beds exceeds 10%.
7 (iii) If the additional beds are in a freestanding
8 psychiatric, rehabilitation or long-term care facility,
9 all licensed beds of the freestanding facility shall be
10 counted in determining whether the increased number of
11 beds exceeds 10%.
12 (4) The proposal substantially expands an existing
13 clinically related health service as determined by the
14 department [in the State health services plan].
15 (b) For the purposes of this act, an expenditure for the
16 purpose of acquiring an existing health care facility [or
17 replacement of equipment where there is no change in service]
18 shall not be considered to be a capital expenditure subject to
19 review. Expenditures for nonclinical activities or services,
20 such as parking garages, computer systems or refinancing of
21 debt, and research projects involving premarket approval of new
22 equipment shall not be subject to review.
23 (c) The capital expenditure threshold identified in
24 subsection (a)(1) may be modified periodically by the department
25 to reflect any increase in the construction cost or other
26 factors influencing health care-related capital expenditures.
27 The department shall publish a modification of the expenditure
28 threshold through the regulatory review process.
29 (d) A list of reviewable clinically related health services
30 shall be published by the department and the CON review board
20070H0305B0346 - 13 -
1 within 30 days of the effective date of this act and may be 2 modified by regulation on an annual basis. Exclusive of new 3 high-cost technology, the initial list published by the 4 department and the CON review board as required under this 5 subsection shall be no more extensive than those services 6 reviewable on the effective date of this act. Criteria for 7 inclusion of reviewable services shall include, but not be 8 limited to: 9 (1) the quality of the service to be offered is likely 10 to be compromised through insufficient volumes or 11 utilization; 12 (2) the service is dependent upon the availability of 13 scarce natural resources such as human organs; 14 (3) the operating costs associated with the service are 15 reimbursed by major third party payors on a cost 16 reimbursement basis; or 17 (4) the service involves the use of new technology. 18 (e) Any changes to the list required under subsection (d) 19 and proposed by regulation shall be developed by the department 20 [after consultation with the policy board.] and the CON review 21 board. 22 (f) A facility providing treatment solely on the basis of 23 prayer or spiritual means in accordance with the tenets of any 24 church or religious denomination or a facility conducted by a 25 religious organization for the purpose of providing health care 26 services exclusively to clergy or other persons in a religious 27 profession who are members of the religious denomination 28 conducting the facility shall not be considered to constitute a 29 health service subject to review under this act. 30 (g) As used in this section, "new high-cost technology" 20070H0305B0346 - 14 -
1 means new technological equipment with an aggregate purchase 2 cost of greater than $500,000. The department and the CON review 3 board shall consult with national medical and surgical 4 speciality organizations recognized by the American Board of 5 Medical Specialities (ABMS) and other nationally recognized 6 scientific resources in the determination of what constitutes 7 new technological equipment. 8 Section 702. Certificates of need; notice of intent; 9 application; issuance. 10 (a) Projects requiring a certificate of need shall, at the 11 earliest possible time in their planning, but not later than 12 April 1 of the calendar year prior to the year of the proposed 13 project start date, be submitted to the department and the CON 14 review board in a letter of intent in such detail advising of 15 the scope and nature of the project as required by regulations. 16 Within 30 days after receipt of the letter of intent, the 17 department and the CON review board shall inform the applicant 18 providing the letter of intent whether the proposed project is 19 subject to a certificate of need review or if additional 20 information is required to make that determination. If the 21 department [determines] and the CON review board determine that 22 the project is subject to a certificate of need review, the 23 project shall be subject to the remaining provisions of this 24 act. 25 (b) A person desiring to obtain or amend a certificate of 26 need shall apply in writing to the department, supplying such 27 information as is required by the department and the CON review 28 board, including, but not limited to, a cost impact analysis as 29 further defined by the department in regulations implementing 30 this act, and certifying that all data, information and 20070H0305B0346 - 15 -
1 statements are factual to the best of their knowledge, 2 information and belief. The department and the CON review board 3 shall have 60 days after receipt of the application within which 4 to assess the application and in which to request specific 5 further information. If further information is requested, the 6 department and the CON review board shall complete its 7 preliminary assessment of the application within 45 days of 8 receipt of the same. No information shall be required that is 9 not specified in the rules and regulations promulgated by the 10 department. 11 (c) Timely notice of the beginning of review of the 12 application by the department shall be published after 13 preliminary assessment of the application is completed by the 14 department and the CON review board. The "date of notification" 15 of the beginning of review shall be the date such notice is 16 sent, or the date such notice is published in the Pennsylvania 17 Bulletin or in a newspaper of general circulation, whichever is 18 latest. 19 (d) The department and the CON review board shall approve or 20 disapprove the application within 90 days from the date of 21 notification of the beginning of the review unless the period 22 for review is extended by the applicant in writing. 23 (e) (1) Certificates of need shall be granted or refused by 24 the department. They shall not be conditioned upon the 25 applicant changing other aspects of its facilities or 26 services or requiring the applicant to meet other specified 27 requirements, and no such condition shall be imposed by the 28 department in granting or refusing approval of certificates 29 of need. 30 (2) A certificate of need shall state the maximum amount 20070H0305B0346 - 16 -
1 of expenditures which may be obligated under it and 2 applicants proceeding with an approved project may not exceed 3 this level of expenditure except as allowed under the 4 conditions and procedures established by the department 5 through regulation. 6 (f) (1) The department and the CON review board shall make 7 written findings which state the basis for any final decision 8 made by the department. Such findings shall be served upon 9 the applicant and provided to all persons expressing an 10 interest in the proceedings and shall be made available to 11 others upon written request. 12 (2) All decisions of the department and the CON review 13 board shall be based solely on the record. No ex parte 14 contact regarding the application between any employee of the 15 department or the CON review board who exercises 16 responsibilities respecting the application and the 17 applicant, any person acting on behalf of the applicant or 18 any person opposed to the issuance of the certificate of need 19 shall occur after the commencement of a hearing on the 20 application and before a decision is made by the department. 21 (g) Modification of the application at any stage of the 22 proceeding shall not extend the time limits provided by this act 23 unless the department and the CON review board expressly [finds] 24 find that the modification represents a substantial change in 25 the character of the application. 26 (h) The responsibility of performing certificate of need 27 review may not be delegated by the department and the CON review 28 board. The department and the CON review board shall consider 29 recommendations of [one or more community-based health services 30 planning committees] the local review committees whose 20070H0305B0346 - 17 -
1 localities are affected by specific applications in reviewing 2 the applications. 3 (i) The department and the CON review board may provide that 4 categories of projects shall receive simultaneous and 5 comparative review. 6 (j) Once the department and the CON review board have 7 finished the initial review of an application and determined 8 that the application shall be reviewed by a local review 9 committee, the department and the CON review board shall notify 10 the Pennsylvania Health Care Cost Containment Council in writing 11 that a community review is pending and request analyses to 12 assist the review process. The council shall offer its analyses 13 to the department and the CON review board prior to the 14 completion of the review process. The department and the CON 15 review board shall share these analyses with the local review 16 committee. If the council determines that it does not have the 17 requisite data and information to provide analyses to the 18 department and the CON review board, the council shall notify 19 the department in writing. The department and the CON review 20 board shall notify the local review committee about the 21 council's determination. In carrying out its responsibilities, 22 the council shall have all the powers and duties of the council 23 enumerated by the act of July 8, 1986 (P.L.408, No.89), known as 24 the "Health Care Cost Containment Act." 25 Section 5. Section 703 of the act, amended July 12, 1980 26 (P.L.655, No.136), is reenacted and amended to read: 27 Section 703. Notice and hearings before [health systems 28 agencies] the department and CON review board. 29 (a) Notice of completed applications for certificates of 30 need or amendment thereto and of the beginning of review shall 20070H0305B0346 - 18 -
1 be published by the [health systems agency] department in the 2 appropriate news media and by the department in the Pennsylvania 3 Bulletin in accordance with 45 Pa.C.S. [Chap. 7B] Ch. 7 Subch. B 4 (relating to publication of documents), and the [health systems 5 agency] department shall notify all affected persons with notice 6 of the schedule for review, the date by which a public hearing 7 must be demanded, and of the manner notice will be given of a 8 hearing, if one is to be held. Notice to affected persons (other 9 than members of the public who are to be served by the proposed 10 new institutional health service) shall be by mail (which may be 11 part of a newsletter). Members of the public may be notified 12 through newspapers of general circulation. Directly affected 13 persons may file objections within 15 days of such publication 14 with the [local health systems agency] department setting forth 15 specifically the reasons such objections were filed. Persons 16 filing the objections shall be parties to the proceeding, unless 17 and until such objections are withdrawn. 18 (b) Affected persons may request a public hearing or the 19 [health systems agency] department may require a public hearing 20 during the course of such review. Fourteen days written notice 21 of the hearing shall be given to affected persons in the same 22 manner as a notice of a completed application is provided in 23 subsection (a). In the hearing, any person shall have the right 24 to be represented by counsel and to present oral or written 25 arguments and relevant evidence. Any person directly affected 26 may conduct reasonable questioning of persons who make relevant 27 factual allegations. A record of the hearing shall be 28 maintained. 29 Section 6. Sections 704 and 705 of the act, amended December 30 18, 1992 (P.L.1602, No.179), are reenacted to read: 20070H0305B0346 - 19 -
1 Section 704. Notice of public meetings. 2 (a) Notification of the beginning of review of a certificate 3 of need application shall be published by the department in the 4 appropriate news media and in the Pennsylvania Bulletin in 5 accordance with 45 Pa.C.S. Ch. 7 Subch. B (relating to 6 publication of documents). The notice shall identify the 7 schedule for review, the date by which a public meeting must be 8 requested and the manner in which notice will be given of a 9 meeting, if one is held. 10 (b) Interested persons may request a public meeting within 11 15 days of publication, and the department shall hold such a 12 meeting or the department may require a public meeting during 13 the course of such review. The department shall publish written 14 notice of the meeting in the appropriate news media and the 15 Pennsylvania Bulletin at least 14 days prior to the public 16 meeting date. In the meeting, the applicant and any interested 17 person providing prior notice to the department shall have the 18 right to present oral or written comments and relevant evidence 19 on the application in the manner prescribed by the department. 20 The department shall prepare a transcript of the oral testimony 21 presented at the meeting. Meetings shall be held in accordance 22 with the guidelines and procedures established by the department 23 and published in the Pennsylvania Code as a statement of policy. 24 The department may require the applicant to provide copies of 25 the application to any interested person making a request for 26 such application, at the expense of the interested person. 27 (c) The applicant may, for good cause shown, request in 28 writing a public hearing for the purpose of reconsideration of a 29 decision of the department within ten days of service of the 30 decision of the department. The department shall treat the 20070H0305B0346 - 20 -
1 request in accordance with the provisions of 1 Pa. Code § 35.241 2 (relating to application for rehearing or reconsideration). The 3 department shall set forth the cause for the hearing and the 4 issues to be considered at such hearing. If such hearing is 5 granted, it shall be held no sooner than six days and no later 6 than 30 days after the notice to grant such a hearing and shall 7 be limited to the issues submitted for reconsideration. A 8 transcript shall be made of the hearing and a copy of the 9 transcript shall be provided at cost to the applicant. The 10 department shall affirm or reverse its decision and submit the 11 same to the person requesting the hearing within 30 days of the 12 conclusion of such hearing. Any change in the decision shall be 13 supported by the reasons for the change. 14 (d) Where hearings under subsection (b) are held on more 15 than two days, consecutive days of hearings and intervening 16 weekends and holidays shall be excluded in calculating the time 17 permitted for the department to conduct its review, and, if 18 briefs are to be filed, ten days subsequent to the adjournment 19 of the hearing shall also be excluded. 20 Section 705. Good cause. 21 Good cause shall be deemed to have been shown if: 22 (1) there is significant, relevant information not 23 previously considered; 24 (2) there is significant change in factors or 25 circumstances relied on in making the decision; 26 (3) there has been material failure to comply with the 27 procedural requirements of this act; or 28 (4) good cause is otherwise found to exist. 29 Section 7. Sections 706, 707 and 708.1 of the act, amended 30 or added December 18, 1992 (P.L.1602, No.179), are reenacted and 20070H0305B0346 - 21 -
1 amended to read: 2 Section 706. Information during review. 3 During the course of review the department and the CON review 4 board shall upon request of any person set forth the status, any 5 findings made in the proceeding and other appropriate 6 information requested. The department and the CON review board 7 may require such request in writing. 8 Section 707. Criteria for review of applications for 9 certificates of need or amendments. 10 (a) An application for certificate of need shall be 11 considered for approval when the department [determines] and the 12 CON review board determine that the application substantially 13 meets the requirements listed below: 14 (1) There is need by the population served or to be 15 served by the proposed service or facility. 16 (2) The proposed service or facility will provide care 17 consistent with quality standards established by the [State 18 health services plan] department. 19 (3) The proposed service or facility will meet the 20 standards identified [in the State health services plan] by 21 the department for access to care by medically underserved 22 groups, including individuals eligible for medical assistance 23 and persons without health insurance. 24 (4) The applicant has submitted a data-based cost 25 analysis that includes an analysis demonstrating that: 26 (i) There is not a more appropriate, less costly or 27 more effective alternative method of providing the 28 proposed services. 29 (ii) The service or facility is financially and 30 economically feasible, considering anticipated volume of 20070H0305B0346 - 22 -
1 care and the availability of reasonable financing based 2 on information from the applicant and other sources 3 during the review process. 4 (iii) The proposed service or facility will not have 5 an inappropriate, adverse impact on the overall level of 6 health care expenditures in the area. 7 (iv) The proposed service or facility does not 8 adversely impact the maintenance and development of rural 9 and inner-city health services generally and, in 10 particular, those services provided by health care 11 providers which are based in rural and inner-city 12 locations and which have an established history of 13 providing services to medically underserved populations. 14 [(b) The department shall issue a certificate of need if the 15 project substantially meets the criteria of subsection (a)(1), 16 (2) and (3) and the project is consistent with the State health 17 services plan unless the department can demonstrate: 18 (1) There is a more appropriate, less costly or more 19 effective alternative method of providing the proposed 20 services. 21 (2) The service or facility is not financially and 22 economically feasible, considering anticipated volume of care 23 and the availability of reasonable financing based on 24 information received from the applicant and other sources 25 during the review process. 26 (3) The proposed service or facility will have an 27 inappropriate, adverse impact on the overall level of health 28 care expenditures in the area. 29 (4) The proposed service or facility adversely impacts 30 the maintenance and development of rural and inner-city 20070H0305B0346 - 23 -
1 health services generally and, in particular, those services 2 provided by health care providers which are based in rural 3 and inner-city locations and which have an established 4 history of providing services to medically underserved 5 populations.] 6 (c) Notwithstanding the provisions of [subsections (a) and 7 (b)] subsection (a), applications for projects described in 8 subsection (d) shall be approved unless the department [finds] 9 and the CON review board find that the facility or service with 10 respect to such expenditure as proposed is not needed [or that 11 the project is not consistent with the State health services 12 plan]. An application made under this subsection shall be 13 approved only to the extent that the department and the CON 14 review board [determines] determine it is required to overcome 15 the conditions described in subsection (d). 16 (d) Subject to the provisions of subsection (c), 17 [subsections (a) and (b)] subsection (a) shall not apply to 18 capital expenditures required to: 19 (1) eliminate or prevent imminent safety hazards as a 20 result of violations of safety codes or regulations; 21 (2) comply with State licensure standards; or 22 (3) comply with accreditation standards, compliance with 23 which is required to receive reimbursement or payments under 24 Title XVIII or XIX of the Federal Social Security Act. 25 Section 708.1. Monitoring certificate of need; expiration of a 26 certificate of need. 27 A certificate of need or an amendment to it shall expire two 28 years from the date issued unless substantially implemented, as 29 defined by regulation. The department and the CON review board 30 may grant extensions for a specified time upon request of the 20070H0305B0346 - 24 -
1 applicant and upon a showing that the applicant has or is making
2 a good faith effort to substantially implement the project. An
3 expired certificate of need shall be invalid, and no person may
4 proceed to undertake any activity pursuant to it for which a
5 certificate of need or amendment is required. The applicant
6 shall report to the department, on forms prescribed by the
7 department, the status of the project until such time as the
8 project is licensed or operational, if no license is required.
9 Section 8. Section 709 of the act, amended December 18, 1992
10 (P.L.1602, No.179), is reenacted to read:
11 Section 709. Emergencies.
12 Notwithstanding any other provision of this act, in the event
13 of an emergency the department may suspend the foregoing
14 application process and permit such steps to be taken as may be
15 required to meet the emergency including the replacement of
16 equipment or facilities.
17 Section 9. Section 710 of the act is reenacted to read:
18 Section 710. Notice of termination of services.
19 For informational purposes only, at least 30 days prior to
20 termination or substantial reduction of a service or a permanent
21 decrease in the bed complement, the provider shall notify the
22 health systems agency and the department of its intended action.
23 Section 10. Section 711 of the act, amended December 18,
24 1992 (P.L.1602, No.179), is reenacted and amended to read:
25 Section 711. Review of activities.
26 (a) The department and the CON review board shall prepare
27 and publish not less frequently than annually reports of reviews
28 conducted under this act, including a statement on the status of
29 each such review and of reviews completed by it and statements
30 of the decisions made in the course of such reviews since the
20070H0305B0346 - 25 -
1 last report. The department and the CON review board shall also 2 make available to the general public for examination at 3 reasonable times of the business day all applications reviewed 4 by it. Such reports and applications shall be considered public 5 records. 6 (b) The department's and the CON review board's report which 7 shall be submitted to the members of the Health and Welfare 8 Committees of the Senate and House of Representatives shall 9 contain the following information: 10 (1) The volume of applications submitted, by project 11 type, their dollar value, and the numbers and costs 12 associated with those approved and those not approved. 13 (2) The assessment of the extent of competition in 14 specific service sectors that guided decisions. 15 (3) A detailed description of projects involving 16 nontraditional or innovative service delivery methods or 17 organizational arrangements and the decisions made on each of 18 these projects. 19 (4) The average time for review, by level of review. 20 (5) The fees collected for reviews and the cost of the 21 program. 22 Section 11. Section 712 of the act, added July 12, 1980 23 (P.L.655, No.136) and repealed in part December 20, 1982 24 (P.L.1409, No.326), is reenacted and amended to read: 25 Section 712. Actions against violations of law and rules and 26 regulations[; bonds]. 27 (a) Whenever any person, regardless of whether such person 28 is a licensee, has willfully violated any of the provisions of 29 this act or the rules and regulations adopted thereunder, the 30 department may maintain any action in the name of the 20070H0305B0346 - 26 -
1 Commonwealth for an injunction or other process restraining or 2 prohibiting such person from engaging in such activity. 3 Section 12. Section 808 of the act, amended December 18, 4 1992 (P.L.1602, No.179) and July 7, 2006 (P.L.334, No.69), is 5 reenacted and amended to read: 6 Section 808. Issuance of license. 7 (a) Standards.--The department shall issue a license to a 8 health care provider when it is satisfied that the following 9 standards have been met: 10 (1) that the health care provider is a responsible 11 person; 12 (2) that the place to be used as a health care facility 13 is adequately constructed, equipped, maintained and operated 14 to safely and efficiently render the services offered; 15 (3) that the health care facility provides safe and 16 efficient services which are adequate for the care, treatment 17 and comfort of the patients or residents of such facility; 18 (4) that there is substantial compliance with the rules 19 and regulations adopted by the department pursuant to this 20 act; and 21 (5) that a certificate of need has been issued if one is 22 necessary. 23 (b) Separate and limited licenses.--Separate licenses shall 24 not be required for different services within a single health 25 care facility except that home health care, home care, hospice 26 or long-term nursing care will require separate licenses. A 27 limited license, excluding from its terms a particular service 28 or portion of a health care facility, may be issued under the 29 provisions of this act. 30 (c) Addition of services.--When the certificate of need for 20070H0305B0346 - 27 -
1 a facility is amended as to services which can be offered, the 2 department shall issue an appropriate license for those services 3 upon demonstration of compliance with licensure requirements. 4 (d) Monitoring.-- 5 (1) One year after the certificate of need has been 6 issued, the department shall monitor quality of the facility 7 or service by requesting from the council relevant data, 8 which may include mortality rates and the number of 9 procedures performed. 10 (2) If the department finds that the facility or service 11 is not meeting the standards set forth in subsection (a), the 12 department shall take disciplinary action pursuant to this 13 act and existing regulations. 14 Section 13. The act is amended by adding a section to read: 15 Section 808.1. Prohibition of referrals and claims of payment. 16 (a) Referrals.--A provider may not: 17 (1) Refer a person for treatment and services if the 18 provider has a financial interest with the person or in the 19 entity that receives the referral. 20 (2) Enter into an arrangement or scheme, including, but 21 not limited to, a cross-referral arrangement, that the 22 provider knows or should know has a principal purpose of 23 assuring referrals by the provider to a particular entity 24 which, if the provider directly made referrals to the entity, 25 would be in violation of this act. 26 (b) Claim for payment.--No claim for payment may be 27 presented by an entity to any individual, third-party payor or 28 other entity for a service furnished pursuant to conduct 29 prohibited under subsection (a). 30 (c) Refund.--If an entity collects any amount that was 20070H0305B0346 - 28 -
1 billed in violation of this section, the entity shall refund 2 that amount on a timely basis to the payor or individual. 3 Section 14. Section 901 of the act, amended July 12, 1980 4 (P.L.655, No.136), is reenacted and amended to read: 5 Section 901. Existing facilities and institutions. 6 (a) (1) No certificate of need shall be required for any 7 buildings, real property and equipment owned, leased or being 8 operated, or under contract for construction, purchase, or lease 9 and for all services being rendered by licensed or approved 10 providers [on April 1, 1980.] prior to the effective date of 11 this paragraph. 12 (2) Nor shall a certificate of need be required for any new 13 institutional health services for which an approval has been 14 granted under section 1122 of the Social Security Act of for 15 which an application is found pursuant to such section to be in 16 conformity with the standards, criteria or plans to which such 17 section refers, or as to which the Federal Secretary of Health 18 and Human Services makes a finding that reimbursement shall be 19 granted.[: Provided, however, That such approval is in force on 20 August 1, 1980 or such application shall have been filed prior 21 to August 1, 1980 or the acceptance of applications for reviews 22 under this act, whichever shall last occur.] 23 (b) However, existing facilities and institutions shall be 24 required to obtain a certificate of need for projects outlined 25 in section 701. 26 Section 15. Section 902.1 of the act, added December 18, 27 1992 (P.L.1602, No.179), is reenacted and amended to read: 28 Section 902.1. Fees for review of certificate of need 29 applications. 30 (a) The department shall charge a fee of [$150] $500 for 20070H0305B0346 - 29 -
1 each letter of intent filed. The letter of intent fee shall be 2 deducted from the total application fee required under 3 subsection (b) if an application is submitted on the project 4 proposed in the letter of intent. 5 (b) For each application the department shall charge a fee, 6 payable on submission of an application. The fee shall not be 7 less than $500 plus up to [$3] $10 per $1,000 of proposed 8 capital expenditure and shall not be more than [$20,000] 9 $50,000. 10 (c) The department shall publish a fee schedule in the 11 Pennsylvania Bulletin which shall explain the procedure for 12 filing fees. 13 (d) All fees payable under this section are due upon the 14 date of filing a letter of intent or application. If a person 15 fails to file the appropriate fee, all time frames required of 16 the department under this act, with respect to review of a 17 letter of intent or application, are suspended until the 18 applicable fee is paid in full. 19 (e) Each local review committee may apply for up to $10,000 20 in funding from the department for administrative functions 21 associated with reviewing certificate of need proposals. This 22 funding is to be allocated from the Patient Safety Authority 23 appropriation. 24 Section 16. Section 904.1 of the act, added December 18, 25 1992 (P.L.1602, No.179), is repealed: 26 [Section 904.1. Sunset. 27 The authority, obligations and duties arising under Chapter 7 28 and all other provisions of this act pertaining to certificates 29 of need shall terminate four years after the effective date of 30 this section. Twelve months prior to this expiration, the 20070H0305B0346 - 30 -
1 Legislative Budget and Finance Committee shall commence a review 2 of the impact of the certificate of need program on quality, 3 access and cost of health care services, including the costs of 4 appeals, reviewable under this act.] 5 Section 17. This act shall take effect immediately. B5L35MSP/20070H0305B0346 - 31 -