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House Bill No. 5531

Public Act No. 04-249

AN ACT CONCERNING REGULATION OF OUTPATIENT SURGICAL FACILITIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 1 of public act 03-274 is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(a) As used in this section and subsection (a) of section 19a-490, as amended, "outpatient surgical facility" means any entity, individual, firm, partnership, corporation, limited liability company or association, other than a hospital, engaged in providing surgical services or diagnostic procedures for human health conditions that include the use of moderate or deep sedation, moderate or deep analgesia or general anesthesia, as such levels of anesthesia are defined from time to time by the American Society of Anesthesiologists, or by such other professional or accrediting entity [as] recognized by the Department of Public Health. An outpatient surgical facility shall not include a medical office owned and operated exclusively by a person or persons licensed pursuant to section 20-13, provided such medical office: (1) Has no operating room or designated surgical area; (2) bills no facility fees to third party payers; (3) administers no deep sedation or general anesthesia; (4) performs only minor surgical procedures incidental to the work performed in said medical office of the physician or physicians that own and operate such medical office; and (5) uses only light or moderate sedation or analgesia in connection with such incidental minor surgical procedures. Nothing in this subsection shall be construed to affect any obligation to comply with the provisions of section 19a-691.

(b) No entity, individual, firm, partnership, corporation, limited liability company or association, other than a hospital, shall individually or jointly establish or operate an outpatient surgical facility in this state without complying with chapter 368z, except as otherwise provided by this section, and obtaining a license within the time specified in this subsection from the Department of Public Health for such facility pursuant to the provisions of this chapter, unless such entity, individual, firm, partnership, corporation, limited liability company or association: [meets any of the following exceptions: ] (1) Provides to the Office of Health Care Access satisfactory evidence that it was in operation on or before July 1, 2003, [; (2) obtains] and (2) obtained, on or before July 1, 2003, from the Office of Health Care Access, a determination that a certificate of need is not required. [and provides the office with satisfactory evidence that it has commenced development of an outpatient surgical facility prior to July 1, 2003; or (3) obtains, between July 1, 2003, and June 30, 2004, inclusive, a certificate of need from the office in accordance with the policies and procedures utilized by the office in approving certificates of need as of July 1, 2003. If an] An entity, individual, firm, partnership, corporation, limited liability company or association [satisfies any of the exceptions in this subsection, it] otherwise in compliance with this section may operate an outpatient surgical facility without a license through March 30, 2007, and shall have until March 30, 2007, to obtain a license from the Department of Public Health. [No outpatient surgical facility may be established between July 1, 2003, and July 1, 2004, unless it satisfies one of the exceptions in this subsection. ]

[(c) The factors to be considered by the Commissioner of Health Care Access in making a determination pursuant to subdivision (2) of subsection (b) of this section as to whether development of an outpatient surgical facility has been commenced shall include, but need not be limited to, whether the applicant for such determination has (1) contractually committed to a site for a facility, (2) expended significant funds for predevelopment expenses for the facility, such as consultation and equipment purchases, or (3) entered into contractual arrangements with third-party payors for services related to the operation of the facility. If any application for a determination pursuant to subdivision (2) of subsection (b) of this section is denied, the applicant may request that such denial be reviewed and reconsidered by the commissioner. The commissioner shall give notice of the grounds for such denial and shall conduct a hearing concerning such denial in accordance with the provisions of chapter 54 concerning contested cases. ]

[(d)] (c) Notwithstanding the provisions of this section, [each] no outpatient surgical facility shall be required to comply with section 19a-617a, 19a-631, 19a-632, as amended, 19a-637a, as amended, 19a-644, as amended, 19a-645, 19a-646, 19a-648, 19a-649, as amended, 19a-650, 19a-652, or 19a-654 to 19a-683, inclusive, as amended. Each outpatient surgical facility shall continue to be subject to the obligations and requirements applicable to such facility, including, but not limited to, any applicable provision of chapter 368v [or chapter 368z] and those provisions of chapter 368z not specified in this subsection, except that a request for permission to undertake a transfer or change of ownership or control shall not be required pursuant to subsection (a) of section 19a-638, as amended, if the Office of Health Care Access determines that the following conditions are satisfied: (1) Prior to any such transfer or change of ownership or control, the outpatient surgical facility shall be owned and controlled exclusively by persons licensed pursuant to section 20-13, either directly or through a limited liability company, formed pursuant to chapter 613, a corporation, formed pursuant to chapters 601 and 602, or a limited liability partnership, formed pursuant to chapter 614, that is exclusively owned by persons licensed pursuant to section 20-13, or is under the interim control of an estate executor or conservator pending transfer of an ownership interest or control to a person licensed under section 20-13, and (2) after any such transfer or change of ownership or control, persons licensed pursuant to section 20-13, a limited liability company, formed pursuant to chapter 613, a corporation, formed pursuant to chapters 601 and 602, or a limited liability partnership, formed pursuant to chapter 614, that is exclusively owned by persons licensed pursuant to section 20-13, shall own and control no less than a sixty per cent interest in the outpatient surgical facility.

[(e)] (d) The provisions of this section shall not apply to persons licensed to practice dentistry or dental medicine pursuant to chapter 379 or to outpatient clinics licensed pursuant to this chapter.

[(f)] (e) Any outpatient surgical facility that is accredited as provided in section 19a-691 shall continue to be subject to the requirements of section 19a-691.

[(g) On and after July 1, 2004, any entity, individual, firm, partnership, corporation, limited liability company or association that meets the definition of outpatient surgical facility pursuant to subsection (a) of this section, shall be subject to the rights and obligations that exist under statutes in effect as of June 30, 2003, and nothing in this section shall be used or introduced in any proceeding to suggest or infer or otherwise indicate or imply that such entity, individual, firm, partnership, corporation, limited liability company or association is or is not a free standing outpatient surgical facility under section 19a-630. No implication shall be created by this section, or used in any manner in any proceeding of any kind, as to whether or not a certificate of need is required on or after July 1, 2004. ]

[(h)] (f) The Commissioner of Public Health may provide a waiver for outpatient surgical facilities from the physical plant and staffing requirements of the licensing regulations adopted pursuant to chapter 368v, provided no waiver may be granted unless the health, safety and welfare of patients is ensured.

Sec. 2. (NEW) (Effective July 1, 2004) (a) The Office of Health Care Access shall study the feasibility of, and may make recommendations for, establishment of an expedited process by which outpatient surgical facilities may obtain a certificate of need in accordance with section 1 of this act. Said commissioner shall consider as possible criteria for eligibility for such expedited process that an outpatient surgical facility: (1) Be required to obtain a certificate of need solely because of the establishment of such facility; (2) have only one operating room; (3) perform surgeries in only one medical specialty; (4) accept no facility fees for its services; (5) demonstrate in a business plan that such facility shall be a low volume outpatient surgical facility and shall have nominal adverse economic effect on other providers of similar surgical services in proximity to such facility; and (6) provide services to patients insured by Medicaid or state-administered general assistance. Such recommendations for an expedited process may apply to any certificate of need decision and certificate of need application required under chapter 368z of the general statutes. On or before January 1, 2005, said commissioner shall submit a report, in accordance with section 11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to public health summarizing the results of such study.

Sec. 3. (Effective from passage) There is established a task force to study issues related to outpatient surgical facilities. The task force shall consider (1) the need for licensure and whether the provisions of chapter 368z of the general statutes should apply to the performance of oral maxillofacial surgery, (2) licensure requirements for procedures not requiring moderate or deep sedation, moderate or deep analgesia or general anesthesia and other procedures being performed in settings other than hospitals or outpatient surgical facilities, and (3) transfer agreements between outpatient surgical facilities and hospitals and the appropriate compensation under such agreements. The task force shall consist of (A) the Commissioner of Public Health, or said commissioner's designee, (B) the Commissioner of the Office of Health Care Access, or said commissioner's designee, and (C) the cochairs, vicechairs and ranking members of the joint standing committee of the General Assembly having cognizance of matters relating to public health, or their designees. Not later than January 1, 2005, such task force shall report its findings and recommendations to the Governor, the president pro tempore, majority leader and minority leader of the Senate, the speaker, majority leader and minority leader of the House of Representatives, and the joint standing committee of the General Assembly having cognizance of matters relating to public health.

Sec. 4. Subdivision (1) of section 19a-630 of the general statutes, as amended by section 30 of public act 03-3 of the June 30 special session, is repealed and the following is substituted in lieu thereof (Effective July 1, 2004):

(1) "Health care facility or institution" means any facility or institution engaged primarily in providing services for the prevention, diagnosis or treatment of human health conditions, including, but not limited to: Outpatient clinics; [free standing] outpatient surgical facilities; imaging centers; home health agencies, as defined in section 19a-490, as amended; clinical laboratory or central service facilities serving one or more health care facilities, practitioners or institutions; hospitals; nursing homes; rest homes; nonprofit health centers; diagnostic and treatment facilities; rehabilitation facilities; and mental health facilities. "Health care facility or institution" includes any parent company, subsidiary, affiliate or joint venture, or any combination thereof, of any such facility or institution, but does not include any health care facility operated by a nonprofit educational institution solely for the students, faculty and staff of such institution and their dependents, or any Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts.

Approved June 3, 2004