PA 08-14—SB 622

Public Health Committee

AN ACT CONCERNING CERTIFICATES OF NEED ISSUED BY THE OFFICE OF HEALTH CARE ACCESS

SUMMARY: This act amends the Office of Health Care Access (OHCA) certificate of need (CON) review process by:

1. adding a new exemption for capital expenditures for nonclinical purposes if certain conditions are met;

2. changing certain registration and notice periods applicable to exempt facilities and institutions; and

3. specifying that, when reviewing CON applications for capital expenditures or for the acquisition of equipment by health care facilities, institutions, providers, or persons, OHCA must consider a set of existing statutory principles and guidelines concerning financial feasibility, impact on health care quality and accessibility, and the public need for the proposal.

The act also changes several deadlines in the CON process, mainly to reflect a change from business to calendar days. Similarly, it changes, to 14 days from 10 business days, the time a hospital has to adjust a patient's bill after OHCA notifies it that an item in the bill is greater than the hospital showed in the applicable schedule of charges it filed with OHCA. By law, the hospital is subject to a $500 civil penalty. The act changes the date for paying the penalty to 14 days, rather than 10 business days after OHCA's notification.

The act repeals obsolete statutes, including those related to OHCA's jurisdiction over CONs for nursing homes, which was transferred to the Department of Social Services in 1993.

EFFECTIVE DATE: Upon passage for the new CON exemption; July 1, 2008 for the other provisions.

NEW CON EXEMPTION FOR CERTAIN CAPITAL EXPENDITURES

The act adds a new exemption from CON review for capital expenditures for parking lots and garages, information and communications systems, physician and administrative office space, land acquisition for nonclinical purposes, and acquisition and replacement of nonmedical equipment. The latter category includes boilers; chillers; and heating, ventilation, and air conditioning systems.

In order to be exempt, (1) the health care facility or institution must provide OHCA with information concerning the type of capital expenditure, the total cost of the project, and other information OHCA requests and (2) the total capital expenditure cannot exceed $20 million.

The act specifies that OHCA's approval of an exemption for land acquisition for nonclinical purposes does not exempt the facility from CON requirements if the facility seeks to develop the land in the future.

EXEMPT FACILITIES - REGISTRATION WITH OHCA

Existing law requires entities exempt from CON to register with OHCA every two years in order to renew their exemption status. Previously, the exempt entity had to file the information required for a “letter of intent” (see BACKGROUND) between 10 business and 60 calendar days before beginning operations or changing, expanding, terminating, or relocating any facility or service otherwise subject to CON. The act changes the filing period to between 14 and 60 calendar days.

The act requires OHCA to provide the entity with a written acknowledgement of receiving the completed filing within 14 days instead of 10 business days.

Existing law exempts municipal, school, and health district outpatient clinics and programs; intermediate care residential facilities for people with mental retardation; certain outpatient rehabilitation services; clinical laboratories; assisted living services; outpatient dialysis units; HMO outpatient clinics; home health agencies; a clinic operated by Americares; and certain nursing and rest homes.

CON DEADLINE CHANGES

Table 1 describes changes the act makes to various deadlines in OHCA's CON process.

Table 1: CON Deadline Changes

Deadline For:

Prior Law

PA 08-14

OHCA to submit notice of a completed letter of intent for publication

15 business days after OHCA determines letter's completion

21 days after OHCA determines letter's completion

OHCA to accept or reject request to extend a letter of intent's current status.

5 business days from receipt of request

7 days from receipt of request

Applicant to submit request for OHCA to waive letter of intent requirement because of emergency nature underlying the CON application

At least 10 business days before the date a new function or service is to begin, a service or function is to terminate, the applicant's ownership or control is to change, or a proposed capital project is to begin

At least 14 days before such date

OHCA to grant, modify, or deny request to waive letter of intent in emergency

Within 10 business days of receiving request

Within 14 days of receiving request

Applicant to provide OHCA with data or information needed to complete letter of intent or CON application

15 business days after OHCA sends notice that letter of intent or CON application is incomplete

21 days after OHCA sends the notice

OHCA to notify applicant of its acceptance or refusal of a letter of intent or CON application for which applicant must submit additional data or information

15 business days (prior law does not specify when the clock for this notice begins to run; in practice OHCA begins it when it sends notice that the data or information is incomplete)

21 days (the act does not specify when the clock for this notice begins)

BACKGROUND

Certificate of Need (CON)

CON authorization is required from OHCA when a health care facility proposes a medical equipment purchase, introduction of an additional function or service, a reduction or termination in services, or changes in ownership or control. Connecticut health care facilities, including ambulatory care centers and outpatient behavioral health programs, also must obtain a CON prior to developing, expanding, or closing certain services and spending more than $3 million on a capital project. Additionally, any person is required to obtain a CON if he or she proposes to acquire major medical equipment with a capital cost of over $3 million.

CON approval, regardless of cost, is required for anyone acquiring, purchasing, or accepting donation of a CT scanner, PET scanner, PET/CT scanner, MRI, cineangiography equipment, a new linear accelerator, or similar equipment utilizing new technology that is being introduced to the state.

The CON process is a two-step procedure consisting of (1) a CON Determination and/or Letter of Intent (LOI) and (2) the application process. Through the LOI process, the applicant notifies OHCA of the project's intent, description, and cost. A CON determination form is submitted to OHCA if the applicant is unsure if a CON is required for the proposal.

OLR Tracking: JK; JR: JL: TS