DEPARTMENT OF HEALTH

The definitions in this section apply to WAC 246-310-800 through 246-310-833, unless the context clearly indicates otherwise:

(1) "Affiliate" or "affiliated" means:

(a) Having at least a ten percent but less than one hundred percent ownership in a kidney dialysis facility;

(b) Having at least a ten percent but less than one hundred percent financial interest in a kidney dialysis facility; or

(c) Three years or more operational management responsibilities for a kidney dialysis facility.

(2) "Base year" means the most recent calendar year for which December 31 data is available as of the first day of the application submission period from the Northwest Renal Network's Modality Report.

(3) "Capital expenditures," as defined by Generally Accepted Accounting Principles (GAAP), means expenditures made to acquire tangible long-lived assets. Long-lived assets represent property and equipment used in a company's operations that have an estimated useful life greater than one year. Acquired long-lived assets are recorded at acquisition cost and include all costs incurred necessary to bring the asset to working order. Capital expenditure includes:

(a) A force account expenditure or acquisition (i.e., an expenditure for a construction project undertaken by a facility as its own contractor).

(b) The costs of any site planning services (architect or other site planning consultant) including, but not limited to, studies, surveys, designs, plans, working drawings, specifications, and other activities (including applicant staff payroll and employee benefit costs, consulting and other services which, under GAAP or Financial Accounting Standards Board (FASB) may be chargeable as an operating or nonoperating expense).

(c) Construction cost of shelled space.

(d) Building owner tenant improvements including, but not limited to: Asbestos removal, paving, concrete, contractor's general conditions, contractor's overhead and profit, electrical, heating, ventilation and air conditioning systems (HVAC), plumbing, flooring, rough and finish carpentry and millwork and associated labor and materials, and utility fees.

(e) Donations of equipment or facilities to a facility.

(f) Capital expenditures do not include routine repairs and maintenance costs that do not add to the utility of useful life of the asset.

(4) "Concurrent review" means the process by which applications competing to provide services in the same planning area are reviewed simultaneously by the department.

(5) "Dialysis facility report (DFR)" means the kidney dialysis facility reports produced annually for Centers for Medicare and Medicaid Services (CMS). The DFR is provided to individual dialysis facilities and contains summary data on each facility compiled from multiple sources. The DFR provides patient characteristics, treatment patterns, transplantation rates, hospitalization rates, and mortality rates to local and national averages.

(6) "Dialysis facility compare (DFC) report" means the kidney dialysis facility compare quarterly report that is produced by CMS and posted on the medicare DFC web site. This report provides information about statistically measurable practice patterns in kidney disease treatment facilities including, but not limited to, mortality, hospitalization, late shifts, and availability of home training.

(7) "End-of-year data" means data contained in the fourth quarter modality report or successor report from the Northwest Renal Network.

(8) "End-of-year in-center patients" means the number of in-center hemodialysis (HD) and self-dialysis training patients receiving in-center kidney dialysis at the end of the calendar year based on end-of-year data.

(9) "Exempt isolation station" means one certificate of need approved certified station per facility dedicated to patients requiring medically necessary isolation. This station may not be used for nonisolation treatments. This one approved station is included in the kidney dialysis facility's total CMS certified station count. However, for purposes of certificate of need, this one isolation station is not included in the facility's station count for projecting future station need or in calculating existing station use. Providers may operate more than one isolation station, but only one is excluded from the facility's station count for purposes of projecting future station need and in calculating existing station use.

(10) "Kidney disease treatment center" or "kidney dialysis facility" means any place, institution, building or agency or a distinct part thereof equipped and operated to provide services, including outpatient dialysis, to persons who have end-stage renal disease (ESRD). In no case will all stations at a given kidney disease treatment center or kidney dialysis facility be designated as self-dialysis training stations. For purposes of these rules, kidney disease treatment center and kidney dialysis facility have the same meaning.

(11) "Maximum treatment floor area square footage" means the sum of (a), (b), (c), and (d) of this subsection:

(a) One hundred fifty square feet multiplied for each general use in-center station and each nonisolation station;

(b) Two hundred square feet multiplied for each isolation station and each permanent bed station;

(c) Three hundred square feet for future expansion of two in-center treatment stations; and

(d) Other treatment floor space is seventy-five percent of the sum of (a), (b), and (c) of this subsection.

As of the effective date of these rules, maximum treatment floor area square footage identified in a successful application cannot be used for future station expansion, except as provided in (c) of this subsection. For example, the applicant may use the maximum allowable treatment floor area square footage. The number of stations may include one isolation station, one permanent bed, eight general use in-center stations, two future expansion stations, and maximum other treatment floor space. In this example, the total maximum treatment floor area square footage in this example would equal three thousand three hundred twenty-five square feet.

(12) "Operational" means the date when the kidney dialysis facility provides its first dialysis treatment in newly approved certificate of need stations, including relocated stations.

(13) "Patients per station" means the reported number of in-center patients at the kidney dialysis facility divided by counted certificate of need approved stations. The results are not rounded up. For example, 4.49 is not rounded to 4.5.

(14) "Permanent bed" means a bed that would commonly be used in a health care setting.

(15) "Planning area" or "service area" means an individual geographic area designated by the department for which kidney dialysis station need projections are calculated. For purposes of kidney dialysis projects, planning area and service area have the same meaning, and each county is considered a separate planning area, except for the planning subareas identified for King, Snohomish, Pierce, and Spokane counties. If the United States Postal Service (USPS) changes zip codes in the defined planning areas, the department will update areas to reflect the revisions to the zip codes to be included in the certificate of need definitions, analyses and decisions. Post office boxes are not included.

(a) King County is divided by zip code into twelve planning areas as follows:

(b) Pierce County is divided into five planning areas as follows:

(c) Snohomish County is divided into three planning areas as follows:

(d) Spokane County is divided into two planning areas as follows:

(16) "Projection year" means the fifth calendar year after the base year. For example, reviews using 2015 end-of-year data as the base year will use 2020 as the projection year.

(17) "QIP" means the end-stage renal disease (ESRD) quality incentive program (QIP) administered by the Centers for Medicare and Medicaid Services (CMS). The QIP measures kidney dialysis facility performance based on outcomes assessed through specific performance and quality measures that are combined to create a total performance score (TPS). The QIP and TPS are updated annually and are publically available on the CMS DFC web site.

(18) "Quintile" means any of five groups into which a population can be divided according to the distribution of values of a particular variable.

(19) "Resident in-center patients" means in-center hemodialysis (HD) patients who reside within the planning area. If more than fifty percent of a kidney dialysis facility's patients reside outside Washington state, these out-of-state patients would be considered resident in-center patients.

(20) "Shelled space" means space that is constructed to meet future needs; it is a space enclosed by a building shell but otherwise unfinished inside unless the space designated for future needs is part of an existing, finished building prior to an applicant's proposed project. In that case, there is no requirement to degrade the space. The shelled space may include:

(a) Electrical and plumbing that will support future needs;

(b) Insulation;

(c) Sheet rock that is taped or other similar wall coverings that are otherwise unfinished; and

(d) Heating, ventilation, and air conditioning.

(21) "Training services" means services provided by a kidney dialysis facility to train patients for home dialysis. Home training spaces are not used to provide in-center dialysis treatments. Spaces used for training are not included in the facility's station count for projecting future station need or in calculating existing station use. Stations previously designated as "training stations" may be used as in-center dialysis stations and will continue to be included in the facility's current station count for projecting future station need or in calculating existing station use. For the purpose of awarding the point for home training in the superiority criteria section (WAC 246-310-823), training services include the following:

(a) Home peritoneal dialysis (HPD); and

(b) Home hemodialysis (HHD).

(1) Between the first working day of February and the last working day of February of each year, each provider will electronically submit the following data elements for each of its kidney dialysis facilities in the state of Washington and each out-of-state kidney dialysis facility that might be used in an application review during the next year (an out-of-state kidney dialysis facility may be used as one of the three closest facilities for a future project during the next year):

(a) Cost report data for the most recent calendar or fiscal year reporting period for which data is available reported to the Centers for Medicare and Medicaid Services (CMS) that is used to calculate net revenue per treatment; and

(b) Data reported to providers by CMS for the most recent calendar or fiscal year reporting period for which data is available to identify the percentage of nursing home patients and the average number of comorbid conditions.

(2) A provider's failure to submit complete data elements identified in subsection (1)(a) and (b) of this section in the format identified by the department for a facility by the deadline in subsection (1) of this section or whose data for a facility is not complete on the DFC report or QIP report (medicare web site) will result in automatic rejection of concurrent review applications for that provider until the following year's data report deadline unless an exemption is granted pursuant to subsection (3) of this section. Corrections to the DFC report, as noted in WAC 246-310-827(7) do not require the filing on an exemption.

(3) A provider may request an exemption from subsection (2) of this section in writing by the first working day in March. The exemption request must demonstrate that reasonable efforts were made to timely submit the required data elements in subsection (1)(a) and (b) of this section. An exemption request based on missing data in the DFC report or QIP report should demonstrate the absence of data is not the result of failure to report to medicare. The department has sole discretion to grant these exemptions. The department will review all submitted exemption requests and respond with a decision by the first working day in April.

(4) Within ten working days, providers must report to the department the date that kidney dialysis stations first became operational for the following:

(a) New kidney dialysis facility;

(b) Stations added to an existing kidney dialysis facility; or

(c) Relocated stations of a kidney dialysis facility.

(5) The department will confirm it has received the required data in subsections (1) and (4) of this section as well as any exemption requests in subsection (3) of this section via e-mail within ten working days of receipt.

(6) The department will publish on its web site the date that the stations in subsection (4) of this section became operational.

The department will review kidney dialysis facility applications using the concurrent review cycles described in this section. There are four concurrent review cycles each year.

(1) Applicants must submit applications for review according to the following table:

(2) The department should complete a nonspecial circumstance concurrent review cycle within nine months, which begins the first day after letters of intent are due for that particular review cycle. The department should complete the regular review process within six months, which begins the first day after the letters of intent are due for that particular review cycle.

(3) The department will notify applicants fifteen days prior to the scheduled decision date if it is unable to meet the decision deadline on the applications. In that event, the department will establish and commit to a new decision date.

(4) When two or more applications are submitted for the same planning area, the department will first evaluate each application independently for meeting the applicable standards described in WAC 246-310-210, 246-310-220, 246-310-230, and 246-310-240. If two or more applications independently meet those four standards, the department will apply the superiority criteria in WAC 246-310-827 to determine the superior application under WAC 246-310-240(1).

(5) An applicant receiving points for the purposes of the superiority criteria under WAC 246-310-827 (3)(e), (f), or (g) may only apply for station need in one planning area per review cycle.

(6) An applicant receiving points for purposes of the superiority criteria under WAC 246-310-827 (3)(e), (f), or (g) must operate the newly awarded stations for a period of time long enough to have a full year of data reporting medicare cost report worksheets and a full year of data reporting the kidney dialysis facility report prior to any future applications.

(7) The department will not accept new nonspecial circumstance applications for a planning area if there are any nonspecial circumstance applications for which the certificate of need program has not made a decision in that planning area filed under a previous concurrent review cycle. This restriction does not apply if the department has not made a decision on the pending applications within the review timelines of nine months for a concurrent review and six months for a regular review. This restriction also does not apply to special circumstance applications.

(8) The department may convert the review of a nonspecial circumstance application that was initially submitted under a concurrent review cycle to a regular review process if the department determines that the nonspecial circumstance application does not compete with another nonspecial circumstance application.

(1) The department will identify each certificate of need approved kidney dialysis facility and the total number of certificate of need approved stations as of the effective date of these rules.

(2) The department will make a one-time administrative station adjustment to each kidney dialysis facility to add one station as an approved exempt isolation station for those facilities that were approved prior to the effective date of these rules.

(3) The department will notify each kidney dialysis facility of its adjusted certificate of need approved station count.

A kidney dialysis facility that provides hemodialysis or peritoneal dialysis, training, or backup must meet the following standards in addition to applicable review criteria in WAC 246-310-210, 246-310-220, 246-310-230, and 246-310-240.

(1) Applications for new stations may only address projected station need in the planning area in which the facility is to be located.

(a) If there is no existing facility in an adjacent planning area, the application may also address the projected station need in that planning area.

(b) Station need projections must be calculated separately for each planning area within the application.

(2) Data used to project station need must be the most recent five-year resident end-of-year in-center patient data available from the Northwest Renal Network as of the first day of the application submission period, concluding with the base year at the time of application.

(3) Projected station need must be based on 4.8 resident in-center patients per station (4.8 planning area) for all planning areas except Adams, Columbia, Douglas, Ferry, Garfield, Jefferson, Kittitas, Klickitat, Lincoln, Okanogan, Pacific, Pend Oreille, San Juan, Skamania, Stevens, Wahkiakum, and Whitman counties. The projected station need for these exception planning areas must be based on 3.2 resident in-center patients per station (3.2 planning area).

(4) The number of dialysis stations projected as needed in a planning area will be determined by using the following methodology:

(a) Determine the type of regression analysis to be used to project resident in-center station need by calculating the annual growth rate in the planning area using the end-of-year number of resident in-center patients for each of the previous six consecutive years, concluding with the base year.

(i) If the planning area has experienced less than six percent growth in any of the previous five annual changes calculations, use linear regression to project station need; or

(ii) If the planning area has experienced six percent or greater growth in each of the previous five annual changes, use nonlinear (exponential) regression to project station need.

(b) Project the number of resident in-center patients in the projection year using the regression type determined in (a) of this subsection. When performing the regression analysis use the previous five consecutive years of end-of-year data concluding with the base year. For example, if the base year is 2015, use end-of-year data for 2011 through 2015 to perform the regression analysis.

(c) Determine the number of dialysis stations needed to serve resident in-center patients in the planning area in the projection year by dividing the result of (b) of this subsection by the appropriate resident in-center patient per station number from subsection (3) of this section. In order to assure access, fractional numbers are rounded up to the nearest whole number. For example, 5.1 would be rounded to 6.0. Rounding to a whole number is only allowed for determining the number of stations needed.

(d) To determine the net station need for a planning area, subtract the number calculated in (c) of this subsection from the total number of certificate of need approved stations located in the planning area. This number does not include the one department recognized exempt isolation station defined in WAC 246-310-800(9). For example, a kidney dialysis facility that is certificate of need approved and certified for eleven stations would subtract the one exempt isolation station and use ten stations for the methodology calculations.

(5) Before the department approves new in-center kidney dialysis stations in a 4.8 planning area, all certificate of need counted stations at each facility in the planning area must be operating at 4.5 in-center patients per station. However, when a planning area has one or more facilities with stations not meeting the in-center patients per stations standard, the department will consider the 4.5 in-center patients per station standard met for those facilities when:

(a) All stations for a facility have been in operation for at least three years; or

(b) Certificate of need approved stations for a facility have not become operational within the timeline as represented in the approved application. For example, an applicant states the stations will be operational within eight months following the date of the certificate of need approval. The eight months would start from the date of an uncontested certificate of need approval. However, the department, at its sole discretion, may approve a one-time modification of the timeline for purposes of this subsection upon submission of documentation that the applicant was prevented from meeting the initial timeline due to circumstances beyond its control.

Both resident and nonresident patients using the kidney dialysis facility are included in this calculation. Data used to make this calculation must be from the most recent quarterly modality report from the Northwest Renal Network as of the letter of intent submission date.

(6) Before the department approves new in-center kidney dialysis stations in a 3.2 planning area, all certificate of need counted stations at each facility in the planning area must be operating at or above 3.2 in-center patients per station. However, when a planning area has facilities with stations not meeting the in-center patients per station standard, the department will consider the 3.2 in-center patients per station standard met for those facilities when:

(a) All stations for a facility have been in operation for at least three years; or

(b) Certificate of need approved stations for a facility have not become operational within the timeline as represented in the approved application. For example, an applicant states the stations will be operational within eight months following the date of the certificate of need approval. The eight months would start from the date of an uncontested certificate of need approval. However, the department, at its sole discretion, may approve a one-time modification of the timeline for the purposes of this subsection upon submission of documentation that the applicant was prevented from meeting the initial timeline due to circumstances beyond its control.

Both resident and nonresident patients using the kidney dialysis facility are included in this calculation. Data used to make this calculation must be from the most recent quarterly modality report from the Northwest Renal Network as of the letter of intent submission date.

(7) When there are relocated stations within a planning area pursuant to WAC 246-310-830(3) and data is not available for the relocated stations, the department will use the station use rate from the previous location as reported on the last quarterly modality report from Northwest Renal Network.

(8) If a provider, including any affiliates, submits multiple applications for projected need in a planning area, the department will use the following process:

(a) Each application will be scored as an individual application to determine superiority.

(b) The sum of the stations requested in the applications cannot exceed the projected need at the time of applications in the planning area.

(1) The kidney dialysis facility must demonstrate positive net income by the third full year of operation.

(a) The calculation of net income is subtraction of all operating and nonoperating expenses, including appropriate allocated and overhead expenses, amortization and depreciation of capital expenditures from total revenue generated by the kidney dialysis facility.

(b) Existing facilities. Revenue and expense projections for existing facilities must be based on that facility's current payor mix and current expenses.

(c) New facilities.

(i) Revenue projections must be based on the net revenue per treatment of the applicant's three closest dialysis facilities.

(ii) Known expenses must be used in the pro forma income statement. Known expenses may include, but are not limited to, rent, medical director agreement, and other types of contracted services.

(iii) All other expenses not known must be based on the applicant's three closest dialysis facilities.

(iv) If an applicant has no experience operating kidney dialysis facilities, the department will use its experience in determining the reasonableness of the pro forma financial statements provided in the application.

(v) If an applicant has one or two kidney dialysis facilities, revenue projections and unknown expenses must be based on the applicant's operational facilities.

(2) An applicant proposing to construct finished treatment floor area square footage that exceeds the maximum treatment floor area square footage defined in WAC 246-310-800(11) will be determined to have an unreasonable impact on costs and charges and the application will be denied. This does not preclude an applicant from constructing shelled space.

(1) The department will approve one or two additional special circumstance stations for an existing kidney dialysis facility (facility) if it meets the following criteria, regardless of whether the need methodology in WAC 246-310-812 projects a need for additional stations in the planning area:

(a) For 4.8 planning areas, the facility has operated at or above an average of 5.0 patients per station for the most recent six consecutive month period preceding the date of application for which data is available. Data used to determine patients per station must be obtained from the Northwest Renal Network; or

(b) For 3.2 planning areas, the facility has operated at or above an average of 3.5 patients per station for the most recent six consecutive month period preceding the date of application for which data is available. Data used to determine patients per station must be obtained from the Northwest Renal Network; and

(c) The facility can accommodate one or two additional stations within its existing building, which may include shelled space. If renovation is needed to accommodate the additional station(s), renovation must be within the existing building.

(2) The department may approve special circumstance station expansions even if other kidney dialysis facilities not owned or affiliated with the applicant in the planning area are below the minimum patients per station operating thresholds set by WAC 246-310-812 (5) or (6).

(3) A facility approved for two special circumstance stations under subsection (1) of this section is not eligible for further special circumstance expansions under this subsection until the department awards additional nonspecial circumstances kidney dialysis stations in the planning area.

(4) As of the effective date of these rules, a facility that has relocated all or part of its stations may not request a special circumstance one- or two-station expansion until three years have lapsed from the date the stations become operational. The three-year prohibition applies to any new kidney dialysis facility or facilities whose station count is changed by the relocation of stations. The three-year prohibition will be retrospectively applied only to kidney dialysis facilities that were approved for partial or complete relocation after January 1, 2015.

(5) For 4.8 planning areas, a facility is ineligible for a special circumstance one- or two-station expansion if the owner or affiliate has approved certificate of need stations in the planning area that have operated below an average of 4.5 patients per station for the most recent six consecutive month period preceding the date of application. Data used to calculate patients per station must be obtained from the Northwest Renal Network.

(6) For 3.2 planning areas, a facility is ineligible for a special circumstance one- or two-station expansion if the owner or affiliate has approved certificate of need stations in the planning area that have operated below an average of 3.2 patients per station for the most recent six consecutive month period preceding the date of application. Data used to calculate patients per station must be obtained from the Northwest Renal Network.

(7) For 4.8 planning areas, a special circumstance one- or two-station expansion will not be approved if, with the requested new station(s), the applicant's kidney dialysis facility would fall below a calculated 4.5 patients per station. Data used to make this calculation is the average patients per station from subsection (1)(a) of this section.

(8) For 3.2 planning areas, a special circumstance one- or two-station expansion will not be approved if, with the requested new stations(s), the applicant's kidney dialysis facility would fall below a calculated 3.0 patient per station. Data used to make this calculation is the average patients per station from subsection (1)(b) of this section.

(9) If a provider operates one or more kidney dialysis facilities within a planning area and applies for a special circumstance one- or two-station expansion in the planning area the department will not accept a letter of intent from that provider for additional stations to meet projected planning area need in the next nonspecial circumstance concurrent review cycle.

(10) Station(s) approved under this section must be operational within six months of approval, otherwise the approval is revoked.

(11) The department will provide a special circumstance one- or two-station expansion application form that incorporates the criteria for certificate of need approval. The application will not be approved unless the criteria are met.

(12) Applicants must submit special circumstance one- or two-station expansion applications according to the schedule set forth in WAC 246-310-806(1).

(13) Special circumstance station applications will be treated as approved and will reduce net station need in the planning area when no nonspecial circumstance applications decisions are pending within the planning area. Special circumstance application approvals will not result in a reduction of net station need in the planning area when nonspecial circumstance application approvals decisions are pending within the planning area.

(1) Columbia, Ferry, Garfield, Klickitat, Lincoln, Pend Oreille, San Juan, Skamania, Stevens, Wahkiakum, and Whitman counties do not have an existing kidney dialysis facility as of the effective date of these rules. The department will award the first project proposing to establish a facility in each of these planning areas as follows:

(a) A minimum of four stations, provided the project meets applicable review criteria and standards; and

(b) The facility must be projected to operate at 3.2 in-center patients per station by the third full year of operation. For purposes of this subsection, the applicant may supplement data obtained from the Northwest Renal Network with other documented demographic and utilization data to demonstrate station need.

(2) Once a county no longer qualifies under subsection (1) of this section, the county remains a 3.2 in-center patient per station county. As of the effective date of these rules, Adams, Douglas, Jefferson, Kittitas, Okanogan, Pacific, and Stevens counties are also identified as 3.2 in-center patient per station counties.

The department will not approve new stations in a planning area if the projections in WAC 246-310-812(4) show no net need, and will not approve more than the number of stations projected as needed unless:

(1) The proposed project qualifies under WAC 246-310-818 for special circumstances one- or two-station expansions; or

(2) All other applicable review criteria and standards have been met; and

(3) One or more of the following have been met:

(a) The department finds the additional stations are needed to be located reasonably close to the people they serve; or

(b) Existing dialysis stations in the kidney dialysis facility requesting the exception are operating at 5.5 patients for a 4.8 planning area or, 3.7 patients per station for the 3.2 planning areas. Data used to make this calculation must be from the most recent quarterly modality report from the Northwest Renal Network as of the application submission date; or

(c) The applicant documents a significant change in ESRD treatment practice has occurred, affecting dialysis station use in the planning area; and

(4) The department finds that exceptional circumstances exist within the planning area and explains the approval of additional stations in writing.

For purposes of determining which of the competing applications should be approved, the criteria in this section will be used as the only means for comparing two or more applications to each other. No other criteria or measures will be used in comparing two or more applications to each other under any of the applicable subcriteria within WAC 246-310-210, 246-310-220, 246-310-230 or 246-310-240.

(1) An application will be denied if it fails to meet any criteria under WAC 246-310-210, 246-310-220, 246-310-230, or 246-310-240 (2) or (3).

(2) An application will be denied if the applicant has one or more kidney dialysis facilities in the planning area not meeting the 4.5 or 3.2 in-center patients per station standards required in WAC 246-310-812 (5) or (6) as of the most recent quarterly report from the Northwest Renal Network as of the date of the letter of intent.

(3) When available, the applicant's closest existing Washington facilities (comparables) are determined as follows:

(a) For existing kidney dialysis facilities proposing to expand, use data for the existing facility plus the next two closest Washington facilities (comparables) owned by or affiliated with the applicant as measured by a straight line. Straight lines will be calculated using "Google Maps" or equivalent mapping software (mileage calculated out to two decimal points, no rounding).

(b) For new kidney dialysis facilities, use data for the next three closest facilities (comparables) owned by or affiliated with the applicant as measured by a straight line from the proposed new kidney dialysis facility location. Straight lines will be calculated using "Google Maps" or equivalent mapping software (mileage calculated out to two decimal points, no rounding).

(c) The number of applications per concurrent review cycle that rely on the same three comparables is limited to two.

(d) If complete medicare data is not available for any of the kidney dialysis facilities and a facility has been granted a department exemption in WAC 246-310-803(3), then that facility will not be used as a comparable and the next closest facility should be included as a comparable.

(e) If the applicant currently does not own or is not affiliated with any kidney dialysis facility, the department will assign the following points:

(i) The median quintile points for those superiority measures using quintiles (excluding net revenue per treatment);

(ii) Two points for standardized mortality ratio (SMR);

(iii) Two points for standardized hospitalization ratio (SHR); and

(iv) Any remaining points for other measures will be based on the representations made in the application.

(f) If the applicant owns or is affiliated with one existing kidney dialysis facility in total, the department will assign the facility's actual points as follows:

(i) The actual quintile points for those superiority measures using quintiles;

(ii) The actual points for SMR;

(iii) The actual points for SHR; and

(iv) Any remaining points for other measures will be based on the representations made in the application.

(g) If the applicant owns or is affiliated with two existing kidney dialysis facilities in total, the department will average the facility's scores as follows:

(i) The average quintile points for those superiority measures using quintiles;

(ii) The average points for SMR;

(iii) The average points for SHR; and

(iv) The average of the remaining points for other measures will be based on the representations made in the applications.

(4) The following table identifies the data measures and the data sources:

(5) The department will obtain the medicare QIP total performance scores (QIP Report) and the kidney dialysis facility compare reports (DFC Report) from the medicare web site on the first working day in February.

(6) The department will determine the quintile scores and nonquintile scores. The department will calculate the quintile scores using the following process for each quintile measure:

(a) For all kidney dialysis facilities for which data is available, sort the facilities from most favorable to least favorable according to the identified data.

(b) Use the percent rank formula using Excel to create the percentile ranking for each kidney dialysis facility in the data set. The array used in the formula is the data set of available facility data identified for that measure.

(c) Assign quintile and nonquintile scores using the following methods:

(i) Quintile measures. For nursing home resident percentage, number of comorbidities, and QIP total performance score measures, the department will determine the quintile scores using the following process:

(A) Dialysis facilities with a percentile ranking of eighty percent or higher get five points.

(B) Dialysis facilities with a percentile ranking less than eighty percent and greater than or equal to sixty percent get four points.

(C) Dialysis facilities with a percentile ranking less than sixty percent and greater than or equal to forty percent get three points.

(D) Dialysis facilities with a percentile ranking less than forty percent and greater than or equal to twenty percent get two points.

(E) Dialysis facilities with a percentile ranking below twenty percent get one point.

(ii) Quintile measure. For the net revenue per treatment measure, the department will determine the quintile scores using the following process:

(A) Dialysis facilities with a percentile ranking of eighty percent or higher get one point.

(B) Dialysis facilities with a percentile ranking less than eighty percent and greater than or equal to sixty percent get two points.

(C) Dialysis facilities with a percentile ranking less than sixty percent and greater than or equal to forty percent get three points.

(D) Dialysis facilities with a percentile ranking less than forty percent and greater than or equal to twenty percent get four points.

(E) Dialysis facilities with a percentile ranking below twenty percent get five points.

(F) Hospitals that do not have a cost report may submit net revenue per treatment actuals from the previous year. Hospitals must also submit a signed attestation stating the net revenue per treatment data is accurate.

(iii) Nonquintile measures. The department will determine the nonquintile scores using the following process:

(A) Dialysis facilities that offer training services are given one point.

(B) Dialysis facilities that offer a shift that begins after 5 p.m. are given one point.

(C) The department will determine SMR points for dialysis facilities as follows:

(I) "Better than expected" get four points.

(II) "As expected" get two points.

(III) "Worse than expected" get 0 points.

(D) The department will determine SHR points for dialysis facilities as follows:

(I) "Better than expected" get four points.

(II) "As expected" get two points.

(III) "Worse than expected" get 0 points.

(E) The department will assign two points for an "as expected" score for dialysis facilities missing only SMR data from the DFC report, provided the facility was granted an exception under WAC 246-310-803(3).

(7) The department will publish the data set including resulting scores and quintiles for all kidney dialysis facilities for review no later than the first working day in April. The data set, including resulting scores and quintiles, will remain open for review and any person may propose the correction of data to the department until the last working day in April. Correction of data may be proposed as follows:

(a) Training services (HPD and HHD): The department will accept a copy of a medicare certification for training services (HPD and HHD) as evidence that a kidney dialysis facility provides these services, regardless of what is represented in the DFC report.

(b) Data related to a shift beginning after 5 p.m.: The department will accept an attestation that a facility either operates a shift beginning after 5 p.m. or will operate that shift if there is a need, regardless of what is represented in the DFC report.

(c) The department will publish the final data set, including resulting scores and quintiles, no later than March 15th or the first working day thereafter.

(8) The department will do the following analysis in order to determine the superior application:

(a) Create the comparable kidney dialysis facility set for each application per subsection (3) of this section.

(b) Determine the individual measure scores for each application by taking the simple average of the comparable scores for each measure.

(c) Determine the total score in the following manner according to the table below:

(9) The application with the highest total score will be the superior alternative for the purpose of meeting WAC 246-310-240(1).

(10) After applying the superiority criterion in this section, if applications are tied, the department will use the following process to determine the superior alternative:

(a) An applicant that was assigned points under subsection (3)(e) of this section in the superiority analysis will be considered the superior alternative; if no applicant was assigned points under subsection (3)(e) of this section, apply (b) of this subsection:

(b) The applicant with the highest average QIP total performance score will be considered the superior alternative;

(c) If applications have the same average QIP total performance score, the applicant with the lowest average net revenue per treatment will be considered the superior alternative.

(1) When an existing facility proposes to relocate any of its stations to another planning area, a new health care facility is considered to be established under WAC 246-310-020 (1)(a).

(2) When an existing kidney dialysis facility proposes to relocate a portion but not all of its stations within the same planning area, a new health care facility is considered to be established under WAC 246-310-020 (1)(a).

(3) When an existing kidney dialysis facility proposes to relocate a portion but not all of its stations to an existing facility, it will be considered a station addition under WAC 246-310-020 (1)(e).

(4) When an entire existing kidney dialysis facility proposes to relocate all of its stations within the same planning area, a new health care facility is not considered to be established under WAC 246-310-020 (1)(a) if:

(a) The existing kidney dialysis facility ceases operation after the relocation;

(b) No new stations are added to the replacement kidney dialysis facility. The maximum treatment floor area square footage as defined in WAC 246-310-800 (11)(a) is limited to the number of certificate of need stations that were approved at the existing facility;

(c) There is no break in service between the closure of the existing kidney dialysis facility and the operation of the replacement facility;

(d) The existing facility has been in operation for at least five years at its present location; and

(e) The existing kidney dialysis facility has not been purchased, sold, or leased within the past five years.

(5) Station use rates at new facilities created by the total relocation of an existing facility or the partial relocation of an existing facility should not be a barrier to the addition of new stations projected as needed for the planning area. In 4.8 planning areas, the station use rate will be counted as 4.5 in-center patients per station. If the department has had to count the station use at 4.5 under the need methodology described in WAC 246-310-812(5), the facility may not request additional stations at the new facility for three years from the date the stations become operational or the facility meets the 4.5 station use standard, whichever comes first. Data used to make this determination will be the most recent Northwest Renal Network quarterly modality report available as of the application submission date.

(6) Station use rates at new facilities created by the total relocation of an existing facility or the partial relocation of an existing facility should not be a barrier to the addition of new stations projected as needed for the planning area. In 3.2 planning areas, the station use rate will be counted as 3.2 in-center patients per station. If the department has had to count the station use at 3.2 under the need methodology described in WAC 246-310-812(6), the facility may not request additional stations at the new facility for three years from the date the stations become operational or the facility meets the 3.2 station use standard, whichever comes first. Data used to make this determination will be the most recent Northwest Renal Network quarterly modality report available as of the application submission date.

(1) When an existing owner-operator of a Washington state kidney dialysis facility is also the owner-operator of a kidney dialysis facility in a contiguous Idaho or Oregon county, the department will not consider a facility that combines the Washington facility and the out-of-state facility to be a new health care facility under WAC 246-310-020(1) provided all of the following criteria are satisfied:

(a) The Washington state kidney dialysis facility is located in Asotin, Benton, Clark, Columbia, Cowlitz, Garfield, Klickitat, Pend Oreille, Skamania, Wahkiakum, Walla Walla, or Whitman counties;

(b) The kidney dialysis facility is the sole provider of dialysis services in the Washington state county;

(c) The kidney dialysis facility is the sole provider of dialysis services in the contiguous Idaho or Oregon county;

(d) The replacement kidney dialysis facility will be located in the same county or planning area as the current Washington state facility;

(e) Both existing kidney dialysis facilities cease operation;

(f) There is no break in service between the closure of the existing kidney dialysis facilities and the operation of the replacement facility;

(g) There has been no change in ownership of either the Washington kidney dialysis facility or out-of-state kidney dialysis facility for at least five years prior to applying for the exemption under this section;

(h) Each existing kidney dialysis facility has been operated by the current provider for a minimum of five years prior to applying for the exemption under this section;

(i) Each existing kidney dialysis facility has been operating at its current location for a minimum of five years prior to applying for the exemption under this section;

(j) The department has not granted a previous exemption under the provisions of this section; and

(k) The number of stations at the replacement kidney dialysis facility does not exceed the total of:

(i) All stations from the Washington state kidney dialysis facility; and

(ii) Using the 4.8 patients per station standard, the stations necessary for the number of patients receiving dialysis at the out-of-state kidney dialysis facility as reported on the most recent Northwest Renal Network quarterly modality report.

(2) Once a Washington state provider has requested and received its one-time exemption under the provisions of this section, the kidney dialysis facility's "resident in-center patient" will have the same meaning as all patients at the facility.