WSR 03-03-097

PROPOSED RULES

DEPARTMENT OF HEALTH


[ Filed January 17, 2003, 3:33 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-14-047.

Title of Rule: Certificate of need (CON) methodology for in-home services agencies licensed to provide hospice or hospice care center services.

Purpose: (1) To update and place in rule the certificate of need methodology for hospice agencies to reflect significant changes that have occurred since the development of the current method; and (2) to develop a methodology implementing revisions to chapter 70.127 RCW in 2000 establishing a new category of in-home services, hospice care centers and requiring a certificate of need for those centers.

Statutory Authority for Adoption: Chapters 70.127 and 70.38 RCW.

Statute Being Implemented: Chapter 70.127 RCW.

Summary: Revises the current need methodology for hospice agencies (in-home services agencies licensed to provide hospice services) and places this methodology in rule.

Establishes a need methodology for the new category of in-home services, hospice care centers.

Reasons Supporting Proposal: The draft rules were developed in consultation with the Hospice Methodology Advisory Committee. The committee determined the current hospice methodology no longer accurately reflects the need for hospice services in Washington. The rules are also necessary to implement revisions to chapter 70.127 RCW requiring a CON for hospice care centers.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Bart Eggen, 2725 Harrison Avenue N.W., Suite 500, Olympia, WA 98504, (360) 705-6658.

Name of Proponent: Washington State Hospice Organization.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The existing certificate of need forecasting methodology for in-home services agencies licensed to provide hospice service was developed in the 1987 state health plan. The health care environment has changed significantly since the development of this method. This rule revises the current methodology and places it in rule. The revised methodology will more accurately predict the need for hospice services in the current health care environment and is also "self-adjusting" and will be able to reflect any future changes in hospice utilization.

Additionally, legislation revising chapter 70.127 RCW was enacted in 2000 defining a new category of in-home services, hospice care centers, and requiring that these centers receive a certificate of need prior to licensure. The proposed rules were also needed to implement this new requirement. This methodology has also been developed to reflect the current trends in hospice use and also to be sensitive to future changes in hospice utilization. WAC 246-310-990 is amended to reflect the new certificate of need review fee.

Proposal Changes the Following Existing Rules: Currently, the need methodology for hospice agencies is not in rule. The department uses the general certificate of need criteria in combination with the 1987 state health plan methodology to review applications. This proposal revises the methodology from the 1987 state health plan and places that methodology in rule. This proposal also adds a new section establishing a methodology for hospice care centers. The proposal adds two new sections to chapter 246-310 WAC, as well as adding a new license fee category to WAC 246-310-990.

No small business economic impact statement has been prepared under chapter 19.85 RCW. These rules do not result in significant costs to providers.

RCW 34.05.328 applies to this rule adoption. The rules set standards that must be followed to obtain a certificate of need. Therefore, the rules are legislatively significant.

Hearing Location: Department of Health, 1101 Eastside Street, Room 6, Olympia, WA 98504-7890, on March 4, 2003, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Yvette Harrison by February 28, 2003, TDD (800) 833-6388 or (360) 705-6661.

Submit Written Comments to: Yvette Harrison, Department of Health, P.O. Box 47852, Olympia, WA 98504-7852, e-mail Yvette.Harrison@doh.wa.gov, COMMENTS DUE BY MARCH 4, 2003.

Date of Intended Adoption: March 18, 2003.

January 17, 2003

M. C. Selecky

Secretary

OTS-5675.5


NEW SECTION
WAC 246-310-290   Hospice services -- Standards and need forecasting method.   The following rules apply to any in-home services agency licensed to provide hospice services which has declared an intent to become Medicare certified as a provider of hospice services in a designated service area.

(1) Definitions.

(a) "ADC" means average daily census and is calculated by:

(i) Multiplying projected annual agency admissions by the most recent average length of stay in Washington (based on Center for Medicare and Medicaid Services (CMS) data) to derive the total annual days of care; and

(ii) Dividing this total by three hundred sixty-five (days per year) to determine the ADC.

(b) "Current supply of hospice providers" means:

(i) Services of all providers that are licensed and Medicare certified as a provider of hospice services or that have a valid (unexpired) certificate of need but have not yet obtained a license; and

(ii) Hospice services provided directly by health maintenance organizations who are exempt from the certificate of need program. Health maintenance organization services provided by an existing provider will be counted under (b)(i) of this subsection.

(c) "Current hospice capacity" means:

(i) For hospice agencies that have operated (or been approved to operate) in the planning area for three years or more, the average number of admissions for the last three years of operation; and

(ii) For hospice agencies that have operated (or been approved to operate) in the planning area for less than three years, an ADC of thirty-five and the most recent Washington average length of stay data will be used to calculate assumed annual admissions for the agency as a whole for the first three years.

(d) "Hospice agency" or "in-home services agency licensed to provide hospice services" means a person administering or providing hospice services directly or through a contract arrangement to individuals in places of temporary or permanent residence under the direction of an interdisciplinary team composed of at least a nurse, social worker, physician, spiritual counselor, and a volunteer and, for the purposes of certificate of need, is or has declared an intent to become Medicaid eligible or certified as a provider of services in the Medicare program.

(e) "Hospice services" means symptom and pain management provided to a terminally ill individual, and emotional, spiritual and bereavement support for the individual and family in a place of temporary or permanent residence and may include the provision of home health and home care services for the terminally ill individual.

(f) "Planning area" means each individual county designated by the department as the smallest geographic area for which hospice services are projected. For the purposes of certificate of need, a planning or combination of planning areas may serve as the service area.

(g) "Service area" means, for the purposes of certificate of need, the geographic area for which a hospice agency is approved to provide Medicare certified or Medicaid eligible services and which consist of one or more planning areas.

(2) The department shall review hospice applications using the concurrent review cycle in this section, except when the sole hospice provider in the service area ceases operation. Applications to meet this need may be accepted and reviewed in accordance with the regular review process.

(3) Applications must be submitted and reviewed according to the following schedule and procedures:

(a) Letters of intent must be submitted between the first working day and last working day of September of each year.

(b) Initial applications must be submitted between the first working day and last working day of October of each year.

(c) The department shall screen initial applications for completeness by the last working day of November of each year.

(d) Responses to screening questions must be submitted by the last working day of December of each year.

(e) The public review and comment for applications shall begin on January 16 of each year. If January 16 is not a working day in any year, then the public review and comment period must begin on the first working day after January 16.

(f) The public comment period is limited to ninety days, unless extended according to the provisions of WAC 246-310-120 (2)(d). The first sixty days of the public comment period must be reserved for receiving public comments and conducting a public hearing, if requested. The remaining thirty days must be for the applicant or applicants to provide rebuttal statements to written or oral statements submitted during the first sixty-day period. Also, any interested person that:

(i) Is located or resides within the applicant's health service area;

(ii) Testified or submitted evidence at a public hearing; and

(iii) Requested in writing to be informed of the department's decision, shall also be provided the opportunity to provide rebuttal statements to written or oral statements submitted during the first sixty-day period.

(g) The final review period shall be limited to sixty days, unless extended according to the provisions of WAC 246-310-120 (2)(d).

(4) Any letter of intent or certificate of need application submitted for review in advance of this schedule, or certificate of need application under review as of the effective date of this section, shall be held by the department for review according to the schedule in this section.

(5) When an application initially submitted under the concurrent review cycle is deemed not to be competing, the department may convert the review to a regular review process.

(6) Hospice agencies applying for a certificate of need must demonstrate that they can meet a minimum average daily census (ADC) of thirty-five patients by the third year of operation. An application projecting an ADC of under thirty-five patients may be approved if the applicant:

(a) Commits to maintain Medicare certification;

(b) Commits to serve one or more counties that do not have any Medicare certified providers; and

(c) Can document overall financial feasibility.

(7) Need projection. The following steps will be used to project the need for hospice services.

(a) Step 1. Calculate the following four statewide predicted hospice use rates using CMS and department of health data.

(i) The predicted percentage of cancer patients sixty-five and over who will use hospice services. This percentage is calculated by dividing the average number of hospice admissions over the last three years for patients the age of sixty-five or over with cancer by the average number of past three years statewide total deaths sixty-five and over from cancer.

(ii) The predicted percentage of cancer patients under sixty-five who will use hospice services. This percentage is calculated by dividing the average number of hospice admissions over the last three years for patients under the age of sixty-five with cancer by the current statewide total of deaths under sixty-five with cancer.

(iii) The predicted percentage of noncancer patients over sixty-five who will use hospice services. This percentage is calculated by dividing the average number of hospice admissions over the last three years for patients over the age of sixty-five with diagnoses other than cancer by the current statewide total of deaths over sixty-five with diagnoses other than cancer.

(iv) The predicted percentage of noncancer patients under sixty-five who will use hospice services. This percentage is calculated by dividing the average number of hospice admissions over the last three years for patients under the age of sixty-five with diagnoses other than cancer by the current statewide total of deaths under sixty-five with diagnoses other than cancer.

(b) Step 2. Calculate the average number of total resident deaths over the last three years for each planning area.

(c) Step 3. Multiply each hospice use rate determined in Step 1 by the planning areas average total resident deaths determined in Step 2.

(d) Step 4. Add the four subtotals derived in Step 3 to project the potential volume of hospice services in each planning area.

(e) Step 5. Inflate the potential volume of hospice service by the one-year estimated population growth (using OFM data).

(f) Step 6. Subtract the current hospice capacity in each planning area from the above projected volume of hospice services to determine unmet need.

(g) Determine the number of hospice agencies in the proposed planning area which could support the unmet need with an ADC of thirty-five.

(8) In addition to demonstrating need under subsection (7) of this section, hospice agencies must meet the other certificate of need requirements including WAC 246-310-210 - Determination of need, WAC 246-310-220 - Determination of financial feasibility, WAC 246-310-230 - Criteria for structure and process of care, and WAC 246-310-240 - Determination of cost containment.

(9) If two or more hospice agencies are competing to meet the same forecasted net need, the department shall consider at least the following factors when determining which proposal best meets forecasted need:

(a) Improved service in geographic areas and to special populations;

(b) Most cost efficient and financially feasible service;

(c) Minimum impact on existing programs;

(d) Greatest breadth and depth of hospice services;

(e) Historical provision of services; and

(f) Plans to employ an experienced and credentialed clinical staff with expertise in pain and symptom management.

(10) Failure to operate the hospice agency in accordance with the certificate of need standards may be grounds for revocation or suspension of an agency's certificate of need, or other appropriate action.

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NEW SECTION
WAC 246-310-295   Hospice care center -- Standards.   The following rules apply to any in-home services agency licensed to provide hospice services, that is or has declared an intent to become additionally licensed to provide hospice care center services.

(1) Definitions.

(a) "Applicant" means an in-home services agency licensed to provide hospice services under chapter 246-335 WAC.

(b) "Hospice care center" means a homelike, noninstitutional facility where hospice services are provided, and that meet the requirements for operation under RCW 70.127.280 and chapter 246-335 WAC.

(2) The department shall review hospice care center applications using the concurrent review cycle in this section.

(3) Applications must be submitted and reviewed according to the following schedule and procedures.

(a) Letters of intent must be submitted between the first working day and last working day of October of each year.

(b) Initial applications must be submitted between the first working day and last working day of November of each year.

(c) The department shall screen initial applications for completeness by the last working day of December of each year.

(d) Responses to screening questions must be submitted by the last working day of January of each year.

(e) The public review and comment for applications begins on February 16 of each year. If February 16 is not a working day in any year, then the public review and comment period must begin on the first working day after February 16.

(f) The public comment period is limited to ninety days, unless extended under WAC 246-310-120 (2)(d). The first sixty days of the public comment period must be reserved for receiving public comments and conducting a public hearing, if requested. The remaining thirty days must be for the applicant or applicants to provide rebuttal statements to written or oral statements submitted during the first sixty-day period. Any interested person that:

(i) Is located or resides within the applying hospice agency's health service area;

(ii) Testified or submitted evidence at a public hearing; and

(iii) Requested in writing to be informed of the department's decision, shall also be provided the opportunity to provide rebuttal statements to written or oral statements submitted during the first sixty-day period.

(g) The final review period is limited to sixty days, unless extended under WAC 246-310-120 (2)(d).

(4) Any letter of intent or certificate of need application submitted for review in advance of this schedule, or certificate of need application under review as of the effective date of this section, shall be held by the department for review according to the schedule in this section.

(5) If an application initially submitted under the concurrent review cycle is deemed not to be competing, the department may convert the review to a regular review process.

(6) An applicant must provide the following documentation to demonstrate that the applicant's existing patient base is sufficient to support the creation of the hospice care center.

(a) Step 1. Determine the average total days of care provided in the applicant's preceding three years of operation. If the applicant has been in operation for less than three years, assume an ADC of thirty-five to calculate potential days of care;

(b) Step 2. Multiply the above average days of care by the applicant's annual percentage of patients requiring care in settings other than their private home to estimate the number of potential patient days. If the applicant has been in operation for less than three years, multiply the potential days of care by the statewide percentage of hospice patients requiring care in settings other than their private home;

(c) Step 3. Divide the estimated number of patient days by three hundred sixty-five (days per year) to estimate the average daily census for the applicant;

(d) Step 4. Assume a minimum occupancy of sixty-five percent to determine the number of beds the applicant could request in their application.

(7) If applying for more beds than provided for in subsection (6) of this section, the applicant must provide documentation, methodology and assumptions that support the applicant's ability to sustain the additional beds.

(8) The following occupancy requirements apply to all applicants:

(a) The average occupancy rate of the beds in the center must be projected to be at least fifty percent for the first three years following completion of the project;

(b) A minimum occupancy rate of sixty-five percent should be maintained after the first three years of operation; and

(c) If applying to add beds to an existing hospice care center the applicant must document that the average occupancy of the beds in the hospice care center was at least eighty percent for the nine months immediately preceding the submittal of the proposal.

(9) The applicant must document that they can maintain the minimum occupancy rate and still meet the following requirements:

(a) No more than forty-nine percent of the hospice agency's patient care days, in the aggregate on a biennial basis, can be provided in the hospice care center, under RCW 70.127.280; and

(b) The maximum number of beds in a hospice care center is twenty, under chapter 70.127 RCW.

(10) Failure to operate the hospice care center in accordance with the application relied upon by the department in making its decision may be grounds for revocation or suspension of a center's certificate of need, or other appropriate action.

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OTS-6020.3


AMENDATORY SECTION(Amending WSR 02-14-051, filed 6/27/02, effective 7/28/02)

WAC 246-310-990   Certificate of need review fees.   (1) An application for a certificate of need under chapter 246-310 WAC ((shall)) must include payment of a fee consisting of the following:

(a) A review fee based on the facility/project type;

(b) ((When)) If more than one facility/project type applies to an application, the review fee for each type of facility/project must be included.


Facility/Project Type Review Fee
Ambulatory Surgical Centers/Facilities $12,964
Amendments to Issued Certificates of Need $8,171
Emergency Review $5,259
Exemption Requests
$5,259
Bed Banking/Conversions $856
Determinations of Nonreviewability $1,222
Hospice Care Center $1,101
Nursing Home Replacement/Renovation Authorizations $1,101
Nursing Home Capital Threshold under RCW 70.38.105 (4)(e) (Excluding Replacement/Renovation Authorizations) $1,101
Rural Hospital/Rural Health Care Facility $1,101
Extensions
Bed Banking $489
Certificate of Need/Replacement Renovation Authorization Validity Period $489
Home Health Agency $15,654
Hospice Agency $13,942
Hospice Care Centers $8,171
Hospital (Excluding Transitional Care Units-TCUs, Ambulatory Surgical Center/Facilities, Home Health, Hospice, and Kidney Disease Treatment Centers) $25,684
Kidney Disease Treatment Centers $15,900
Nursing Homes (Including CCRCs and TCUs) $29,354

(2) The fee for amending a pending certificate of need application ((shall be)) is determined as follows:

(a) ((When)) If an amendment to a pending certificate of need application results in the addition of one or more facility/project types, the review fee for each additional facility/project type must accompany the amendment application;

(b) ((When)) If an amendment to a pending certificate of need application results in the removal of one or more facility/project types, the department shall refund to the applicant the difference between the review fee previously paid and the review fee applicable to the new facility/project type; or

(c) ((When)) If an amendment to a pending certificate of need application results in any other change as identified in WAC 246-310-100, a fee of one thousand three hundred nine dollars must accompany the amendment application.

(3) ((When)) If a certificate of need application is returned by the department ((in accordance with the provisions of)) under WAC 246-310-090 (2)(b) or (e), the department shall refund seventy-five percent of the review fees paid.

(4) ((When)) If an applicant submits a written request to withdraw a certificate of need application before the beginning of review, the department shall refund seventy-five percent of the review fees paid by the applicant.

(5) ((When)) If an applicant submits a written request to withdraw a certificate of need application after the beginning of review, but before the beginning of the ex parte period, the department shall refund one-half of all review fees paid.

(6) ((When)) If an applicant submits a written request to withdraw a certificate of need application after the beginning of the ex parte period the department shall not refund any of the review fees paid.

(7) Review fees for exemptions and extensions ((shall be)) are nonrefundable.

[Statutory Authority: RCW 70.38.105 and 2002 c 371. 02-14-051, 246-310-990, filed 6/27/02, effective 7/28/02. Statutory Authority: RCW 70.38.105(5) and 43.70.110. 01-15-094, 246-310-990, filed 7/18/01, effective 8/18/01. Statutory Authority: RCW 70.38.105(5). 99-23-089, 246-310-990, filed 11/16/99, effective 12/17/99. Statutory Authority: Chapter 70.38 RCW. 96-24-052, 246-310-990, filed 11/27/96, effective 12/28/96. Statutory Authority: RCW 70.38.135, 43.70.250 and 70.38.919. 92-02-018 (Order 224), 246-310-990, filed 12/23/91, effective 1/23/92. Statutory Authority: RCW 43.70.040. 91-02-049 (Order 121), recodified as 246-310-990, filed 12/27/90, effective 1/31/91. Statutory Authority: Chapter 70.38 RCW. 90-15-001 (Order 070), 440-44-030, filed 7/6/90, effective 8/6/90. Statutory Authority: RCW 43.20A.055. 89-21-042 (Order 2), 440-44-030, filed 10/13/89, effective 11/13/89; 87-16-084 (Order 2519), 440-44-030, filed 8/5/87; 87-12-049 (Order 2494), 440-44-030, filed 6/1/87; 84-13-006 (Order 2109), 440-44-030, filed 6/7/84; 83-21-015 (Order 2037), 440-44-030, filed 10/6/83. Statutory Authority: 1982 c 201. 82-13-011 (Order 1825), 440-44-030, filed 6/4/82.]

Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.

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