Current Status Introducing Body:Senate Bill Number:1436 Primary Sponsor:Leatherman Type of Legislation:GB Subject:Certificate of need and health Residing Body:Senate Companion Bill Number:4639 Computer Document Number:BR1/2376.AC Introduced Date:Mar 30, 1992 Last History Body:Senate Last History Date:Apr 29, 1992 Last History Type:Read second time, notice of general amendments Scope of Legislation:Statewide All Sponsors:Leatherman Peeler J. Verne Smith Helmly Matthews Nell W. Smith Type of Legislation:General Bill
Bill Body Date Action Description CMN
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1436 Senate Apr 29, 1992 Read second time, notice of
general amendments
1436 Senate Apr 29, 1992 Polled out of Committee 13
1436 Senate Mar 30, 1992 Introduced, read first time, 13
referred to Committee
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COMMITTEE REPORT
April 29, 1992
S. 1436
Introduced by SENATORS Leatherman, Peeler, J. Verne Smith, Helmly, Matthews and Nell W. Smith
S. Printed 4/29/92--S.
Read the first time March 30, 1992.
To whom was referred a Bill (S. 1436), to amend Section 44-7-120, as amended, Code of Laws of South Carolina, 1976, relating to the purpose of the Certificate of Need and Health Licensure Act, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass:
ALEXANDER S. MACAULAY, for Committee.
TO AMEND SECTION 44-7-120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PURPOSE OF THE CERTIFICATE OF NEED AND HEALTH LICENSURE ACT, SO AS TO CHANGE REFERENCES FROM THE STATE MEDICAL FACILITIES PLAN TO THE STATE HEALTH PLAN; TO AMEND SECTION 44-7-130, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO REVISE THE DEFINITION OF "AFFECTED PERSON", "HEALTH CARE FACILITY", "HEALTH SERVICE", AND TO ADD THE DEFINITION OF "LIKE EQUIPMENT WITH SIMILAR CAPABILITIES"; TO AMEND SECTION 44-7-160, AS AMENDED, RELATING TO CIRCUMSTANCES REQUIRING CERTIFICATE OF NEED, SO AS TO DELETE PROVISIONS RELATING TO ACQUISITION OF MEDICAL EQUIPMENT OWNED BY OR LOCATED IN A HEALTH CARE FACILITY; TO AMEND SECTION 44-7-170, AS AMENDED, RELATING TO TRANSACTIONS AND INSTITUTIONS EXEMPT FROM THE ARTICLE, SO AS TO DELETE PROVISIONS RELATING TO THE INITIATION OF SERVICES THROUGH CONTRACTUAL ARRANGEMENTS FOR SHARED MOBILE DIAGNOSTIC AND THERAPEUTIC DEVICES; TO AMEND SECTION 44-7-180, AS AMENDED, RELATING TO THE STATE MEDICAL FACILITIES PLAN, SO AS TO CHANGE THIS PLAN TO THE STATE HEALTH PLAN, TO PROVIDE FOR A HEALTH PLANNING COMMITTEE, ITS MEMBERS AND TERMS, AND TO PROVIDE THAT THE COMMITTEE SHALL ADVISE IN THE PREPARATION OF THE PLAN, TO REVISE THE CONTENT, APPROVAL, AND REVISION PROCEDURES FOR THE PLAN; TO AMEND SECTION 44-7-200, AS AMENDED, RELATING TO CERTIFICATE OF NEED APPLICATIONS, SO AS TO PROHIBIT CERTAIN DEPARTMENT PERSONNEL FROM COMMUNICATING WITH OTHER PERSONS ABOUT PENDING APPLICATIONS; TO AMEND SECTION 44-7-210, AS AMENDED, RELATING TO PROCEDURES FOLLOWING COMPLETION OF A CERTIFICATE OF NEED APPLICATION, SO AS TO PROVIDE FOR PROJECT REVIEW CRITERIA AND PROCEDURES; TO AMEND SECTION 44-7-230, AS AMENDED, RELATING TO THE NONTRANSFERABILITY OF CERTIFICATE OF NEED, SO AS TO REQUIRE PROJECT REPORTS AND INSPECTIONS TO ASSURE COMPLIANCE AND TO EXTEND A CERTIFICATE OF NEED FROM SIX MONTHS TO ONE YEAR ON MAJOR HOSPITAL CONSTRUCTION PROJECTS; TO AMEND SECTION 44-7-240, AS AMENDED, RELATING TO A STATE CONSTRUCTION PROGRAM, SO AS TO CHANGE THE REFERENCE FROM STATE FACILITIES PLAN TO STATE HEALTH PLAN; TO PROVIDE FOR CERTIFICATE OF NEED EXEMPTIONS FOR MEDICAL EQUIPMENT UNDER CERTAIN CONDITIONS; AND TO PROVIDE FOR STAGGERED TERMS FOR MEMBERS APPOINTED TO THE HEALTH PLANNING COMMITTEE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 44-7-120 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-120. The purpose of this article is to promote cost containment, prevent unnecessary duplication of health care facilities and services, guide the establishment of health facilities and services which will best serve public needs, and ensure that high quality services are provided in health facilities in this State. To achieve these purposes, this article requires:
(1) the issuance of a Certificate of Need prior to the before undertaking of any a project prescribed by this article;
(2) adoption of procedures and criteria for submittal of an application and appropriate review prior to before issuance of a Certificate of Need;
(3) preparation and publication of a State Health Medical Facilities Plan;
(4) the licensure of facilities rendering medical, nursing, and other health care."
SECTION 2. Section 44-7-130(1) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(1) `Affected person' means the applicant, any a person residing within the geographic area served or to be served by the applicant, health care facilities persons located in the health service area in which the project is to be located and which who provide similar services to the proposed project, health care facilities which prior to persons who before receipt by the department of the proposal being reviewed have formally indicated an intention to provide similar services in the future, persons who pay for health services in the health service area in which the project is to be located and who have notified the department of their interest in certificate of need applications, the State Consumer Advocate, and the State Ombudsman. Persons from another state who would otherwise be considered `affected persons' are not included unless that state provides for similar involvement of persons from South Carolina in its certificate of need process."
SECTION 3. 44-7-130(10) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(10) `Health care facility" means acute care hospitals, psychiatric hospitals, alcohol and substance abuse hospitals, tuberculosis hospitals, nursing homes, kidney disease treatment centers, including free-standing hemodialysis centers, ambulatory surgical facilities, rehabilitation facilities, residential treatment facilities for children and adolescents, habilitation centers for mentally retarded persons or persons with related conditions, and any other facility for which Certificate of Need review is required by federal law."
SECTION 4. Section 44-7-130(11) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(11) `Health service' means clinically related, diagnostic, treatment, or rehabilitative services, and includes alcohol, drug abuse, and mental health services for which specific standards or criteria are prescribed in the State Medical Facilities Health Plan."
SECTION 5. Section 44-7-130 of the 1976 Code, as last amended by Part II, Section 64, Act 612 of 1990, is further amended by adding an appropriately numbered item to read:
"( ) `Like equipment with similar capabilities' means medical equipment which does not increase the potential volume or type of procedures possible."
SECTION 6. Section 44-7-160 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-160. Any A person or health care facility as defined in this article is required to obtain a Certificate of Need from the department prior to before undertaking any of the following:
(1) the construction or other establishment of a new health care facility;
(2) a change in the existing bed complement of a health care facility through the addition of one or more beds or change in the classification of licensure of one or more beds;
(3) an expenditure by or on behalf of a health care facility in excess of an amount to be prescribed by regulation which, under generally acceptable accounting principles consistently applied, is considered a capital expenditure except those expenditures exempted in Section 44-7-170(B)(1). The cost of any studies, surveys,
designs, plans, working drawings, specifications, and other activities essential to the development, acquisition, improvement, expansion, or replacement of any plant or equipment must be included in determining if the expenditure exceeds the prescribed amount;
(4) a capital expenditure by or on behalf of a health care facility which is associated with the addition or substantial expansion of a health service for which specific standards or criteria are prescribed in the State Medical Facilities Health Plan;
(5) the offering of any a health service by or on behalf of a health care facility which has not been offered by the facility in the preceding twelve months and which has an annual operating cost in excess of an amount to be prescribed by regulation and for which specific standards or criteria are prescribed in the State Medical Facilities Health Plan;
(6) the acquisition of medical equipment to be owned by or located in a health care facility, if the total project cost is in excess of that prescribed by regulation;
(7)(6) the acquisition of medical equipment which is to be used for diagnosis or treatment of an inpatient of a health care facility if the total project cost is in excess of that prescribed by regulation;
(8)(7) the acquisition or change in ownership or in controlling interest of a health care facility or entity owning a health care facility directly or indirectly by purchase, lease, gift, donation, sale of stock, or comparable arrangement if the acquisition or change in ownership or controlling interest may result in an increase in cost to the facility or increase in government-sponsored reimbursement;
(9)(8) the acquisition of an existing health care facility by any a person who has failed to notify the department and seeks an exemption prior to before entering into a contractual arrangement to acquire an existing facility;
(10)(9) an expenditure or financial obligation made in preparation for the offering or developing of any a project which requires certification of need pursuant to this section if the expenditure or financial obligation is in excess of an amount to be prescribed by regulation."
SECTION 7. Section 44-7-170(B) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(B) The Certificate of Need provisions of this article do not apply to:
(1) an expenditure by or on behalf of a health care facility for nonmedical projects for services such as refinancing existing debt, parking garages, laundries, roof replacements, computer systems, telephone systems, heating and air conditioning systems, upgrading facilities which do not involve additional square feet or additional health services, replacement of like equipment with similar capabilities, or similar projects as described in regulations;
(2) the initiation of services through contractual arrangements for shared mobile diagnostic and therapeutic devices such as computerized tomography, magnetic resonance imaging, lithotripsy, or nuclear medicine services;
(3)(2) facilities owned and operated by the South Carolina State Department of Mental Health and the South Carolina Department of Mental Retardation, except an addition of one or more beds to the total number of beds of the departments' health care facilities existing on July 1, 1988;
(4)(3) educational and penal institutions maintaining infirmaries for the exclusive use of their respective student bodies and inmate populations;
(5)(4) any federal health care facility sponsored and operated by this State."
SECTION 8. Section 44-7-180 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-180. (A) There is created a health planning committee comprised of fourteen members. The Governor shall appoint twelve members, at least one member from each congressional district. Each of the following groups must be equally represented among the Governor's appointees: health care consumers, health care financiers to include business and insurance, and health care providers. The chairman of the board shall appoint one member. The South Carolina Consumer Advocate or the Consumer Advocate's designee is an ex officio nonvoting member. Members are appointed for four-year terms, may serve only two consecutive terms, and are allowed the usual mileage and subsistence as provided for members of boards, committees, and commissions.
(A)(B) With the advice of the health planning committee, the department shall prepare and submit to the board for adoption a State Medical Facilities Health Plan for use in the administration of the Certificate of Need Program provided in this article. The plan at a minimum must include:
(1) an inventory of existing health care facilities, beds, specified health services, and equipment;
(2) projections of need for additional health care facilities, beds, health services, and equipment; and
(3) standards for distribution of health care facilities, beds, specified health services, and equipment including scope of services to be provided, utilization, and occupancy rates, travel time, regionalization, other factors relating to proper placement of services, and proper planning of health care facilities; and
(4) a general statement as to the project review criteria considered most important in evaluating certificate of need applications for each type of facility, service, and equipment.
(B) The State Medical Facilities Health Plan must address and include projections and standards for specified health services and equipment which have a potential to substantially impact health care cost and accessibility.
(C) Upon approval by the health planning committee, the State Health Plan must be submitted at least once every two years to the board for final revision and adoption. Once adopted by the board, the This plan may later be revised through the same planning and approval process upon approval of the board. The department shall adopt by regulation a procedure to allow public review and comment, including regional public hearings, prior to before adoption or revision of the plan."
SECTION 9. Section 44-7-200 of the 1976 Code, as last amended by Act 471 of 1990, is further amended to read:
"Section 44-7-200. (A) An application for a Certificate of Need must be submitted to the department in a form established by regulation. The application must address all applicable standards and requirements set forth in departmental regulations, Project Review Criteria of the department, and the State Medical Facilities Health Plan. The application must include the payment of a non-refundable initial application fee of five hundred dollars. The department shall deduct this fee from the Certificate of Need filing fee which is payable in accordance with departmental regulations when the application is determined to be complete.
(B) Within twenty days before submission of an application, the applicant shall publish notification that an application is to be submitted to the department in a newspaper serving the area where the project is to be located for three consecutive days. The notification must contain a brief description of the scope and nature of the project. No application may be accepted for filing by the department unless accompanied by proof that publication has been made for three consecutive days within the prior twenty-day period and payment of the initial application fee has been received.
(C) Upon publication of this notice and until a contested case hearing is requested pursuant to Section 44-7-210:
(1) members of the board and persons appointed by the board to hear appeals from department staff decisions may not communicate directly or indirectly with any person in connection with the application; and
(2) no person shall communicate, or cause another to communicate, as to the merits of the application with members of the board and persons appointed by the board to hear appeals from department staff decisions.
A person who violates this subsection is subject to the penalties provided in Section 1-23-360.
(C)(D) After receipt of an application with proof of publication and payment of the initial application fee, the department shall publish in the State Register a notice that an application has been accepted for filing. Within thirty days of acceptance of the application, the department may request additional information as may be necessary to complete the application. The applicant has thirty days from the date of the request to submit the additional information. If the applicant fails to submit the requested information within the thirty-day period, the application is considered withdrawn."
SECTION 10. Section 44-7-210 of the 1976 Code, as last amended by Act 471 of 1990, is further amended to read:
"Section 44-7-210. (A) After the department has determined that an application is complete, affected persons must be notified in accordance with departmental regulations. The notification of affected persons begins the review period. During the review period, the department shall determine the relative importance of the project review criteria for this project and shall notify the applicant of this determination. The applicant has thirty days from the date of the receipt of this notice to submit any additional information. The review period for a completed application is sixty days from the date of notification of affected persons, or up to sixty days from the date that applicants are notified of the relative importance of project review criteria provided for in this section, whichever is longer. One extension of up to sixty days may be granted by the department in accordance with departmental regulations with the exception of an extension that is granted to comply with a request for a public hearing.
(B) The department may hold a public hearing, if timely requested, to gather information and obtain public comment and opinion about the proposed project.
(C) The department may not issue a Certificate of Need unless an application complies is in substantial compliance with the State Medical Facilities Health Plan, Project Review Criteria, and other regulations. Based on project review criteria and other regulations, the department may refuse to issue a Certificate of Need even if an application complies with the State Health Plan. In the case of competing applications, the department shall award a Certificate of Need, if appropriate, on the basis of which, if any, most fully complies with the requirements, goals, and purposes of this article and the State Medical Facilities Health Plan, Project Review Criteria, and the regulations adopted by the department.
(D) On the basis of staff review of the application, the staff of the department shall make a proposed decision to grant or deny the Certificate of Need. Notice of the proposed decision must be sent to the applicant and affected persons who have asked to be notified. The proposed decision becomes the final agency decision within ten days after the receipt of a notice of the proposed decision by the applicant unless one of the following occurs:
(1) A reconsideration hearing before by the staff of the department is requested in writing within the ten-day period by an affected a person showing good cause for reconsideration of the proposed decision.; or
(2) A contested case hearing before the board, or its designee, regarding the grant or denial of the Certificate of Need is requested in writing within the ten-day period by the applicant or other affected person with standing to contest the grant or denial of the application.
A reconsideration hearing must be conducted Reconsideration by the staff must occur within thirty days from receipt of the request.
(E) The department's proposed decision is not final until the completion of reconsideration or contested case proceedings. The burden of proof in a reconsideration or contested case hearing must be upon the moving party. The contested case hearing before the board or its designee is conducted as a contested case under the Administrative Procedures Act. The issues considered at the contested case hearing are limited to those presented or considered during the staff review and decision process."
SECTION 11. Section 44-7-230(A) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(A) The Certificate of Need, if issued, is valid only for the project described in the application including location, beds and services to be offered, physical plant, capital or operating costs, or other factors as set forth in the application, except as may be modified in accordance with regulations. The department shall require periodic reports and make inspections to determine compliance with the Certificate of Need. Implementation of the project or operation of the facility or medical equipment that is not in accordance with the Certificate of Need application or conditions subsequently agreed to by the applicant and the department may be considered a violation of this article."
SECTION 12. Section 44-7-230(D) of the 1976 Code, as last amended by Act 471 of 1990, is further amended to read:
"(D) A Certificate of Need is valid for six months from the date of issuance except for projects involving construction or replacement of, or major renovations or additions to, an acute care hospital. For these projects the Certificate of Need is valid for one year from the date of issuance. A Certificate of Need must be issued with a timetable submitted by the applicant and approved by the department to be followed for completion of the project. The holder of the Certificate of Need shall submit periodic progress reports on meeting the timetable as may be required by the department. Failure to meet the timetable results in the revocation of the Certificate of Need by the department unless the department determines that extenuating circumstances beyond the control of the holder of the Certificate of Need are the cause of the delay. The department may grant two extensions of up to six months each upon evidence that substantial progress has been made in accordance with procedures set forth in regulations. The board may grant further extensions of up to six months each only if it determines that substantial progress has been made in accordance with the procedures set forth in regulations."
SECTION 13. Section 44-7-240 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-240. The department may establish a construction program providing for adequate facilities in this State and, insofar as possible, shall provide for the distribution of facilities and services throughout this State in such manner as to make all types of health services reasonably accessible to all persons in this State. The State Medical Facilities Health Plan as required by this article may be used for purposes of establishing the relative need of projects for which applications are submitted under this construction program. Submittal of applications and review and approval of projects for which federal funds are requested must be in accordance with regulations adopted by the department and applicable federal act."
SECTION 14. Medical equipment lawfully leased or purchased before the effective date of this act is exempt from the provisions of Section 44-7-160(6) provided that an application for an exemption is made within six months of the effective date of this act. The application must be in the form required by the department and must include current utilization data for the equipment.
SECTION 15. Of the twelve members initially appointed by the Governor to the health planning committee created by this act, six members, to be designated by the Governor, are appointed for two- year terms.
SECTION 16. This act takes effect upon approval by the Governor.