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ACT NO. 53


Health; Health Care Facilities; Planning and Regulation

This act amends the laws concerning the regulation of hospitals and other health care facilities. Among other things, it requires the commissioner of banking, insurance, securities, and health care administration (BISHCA), in consultation with the secretary of the agency of human services, to prepare a four-year health resource allocation plan (HRAP), which will include a statement of principles, an inventory of existing health care resources, and recommendations for the allocation of resources pursuant to the principles. The law authorizes the commissioner of BISHCA to assess hospitals up to $300,000.00 for expenses incurred in the preparation of the HRAP.

In addition, the law requires hospitals to conduct four-year community needs assessments and publish community reports, which will include measures of quality, patient safety, financial health, and costs; an openness process; a summary of the community needs assessment; and governance information.

The public oversight commission (POC) no longer plays a formal role in reviewing hospital budgets, though it does look at hospital one-year and four-year capital expenditure plans. In addition, the commission is consulted with respect to the development and updating of hospital quality and financial measures as well as the health resource allocation plan.

With regard to the certificate of need (CON) process, the monetary thresholds triggering review are raised but the commissioner of BISHCA has the authority to require complete review for some smaller health care projects if the project (1) may be inconsistent with the HRAP, (2) may significantly increase utilization or rates, (3) may substantially change the type, scope, or volume of service, or, (4) in the case of hospitals, may place an undue financial burden on the hospital’s resources. In addition, the new law creates a two-step review process for projects having a value exceeding $20 million. Also, upon adoption of the HRAP, the criteria for reviewing an application are amended, in large part to reflect the recommendations contained in the HRAP.

Regarding CON procedures, applications, information, and testimony shall be submitted under oath and subject to prosecution for perjury. The amended definition of “interested party” is broadened to include organizations, and it also eliminates the requirement that interested parties be “adversely” affected by the proposed health care project. Persons able to offer material assistance only are not permitted party status, but may be admitted in an amicus curiae capacity. The health care and long-term care ombudsmen are given authority to intervene in any proceeding. Parties are given the opportunity to appear before the commissioner if he or she proposes to render a decision adverse to the POC’s recommendation or to render a decision denying an application or approving a contested application. And, finally, if the commissioner’s final decision is contrary to the POC’s recommendation, the standard of review on appeal to the supreme court shall require that the commissioner’s decision be supported by a preponderance of the evidence in the record.

Regarding hospital budget reviews, the commissioner of BISHCA shall take into consideration the HRAP when reviewing budgets. Budget reviews may be waived for up to two consecutive years, except in the case of tertiary hospitals. Information is required to be filed under oath and subject to perjury, and a civil administrative penalty is added for violations of the budget review process.

Effective Date: July 1, 2003