SENATE BILL REPORT

SB 5386

BYSenators Vognild, West and Barr

Requiring hospital certification.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):February 2, 1989; February 14, 1989

Majority Report:  That Substitute Senate Bill No. 5386 be substituted therefor, and the substitute bill do pass.

      Signed by Senators West, Chairman; Smith, Vice Chairman; Amondson, Johnson.

Minority Report:  Do not pass.

      Signed by Senators Kreidler, Niemi, Wojahn.

Senate Staff:Don Sloma (786-7414)

                  February 16, 1989

AS REPORTED BY COMMITTEE ON HEALTH CARE & CORRECTIONS, FEBRUARY 14, 1989

BACKGROUND:

Certificate of need (CON) is a regulatory program applied to health care institutions to ensure that new health care services and facilities are needed, and that such services and facilities contribute to improved access to high quality, economical health care.  The program was first authorized in 1972, and has been modified several times to comply with federal law and to strengthen its cost containment emphasis. 

Current law requires that a state health plan be prepared periodically which details the needs for various health care services and facilities within each region of the state.  Applications to construct health care facilities and expand certain services are assessed against the plan and granted certificates of need if they conform.  Facility construction, expansion or transfer, the purchase of certain expensive medical equipment by health care facilities, and the provision of certain complex medical procedures may only occur after obtaining a CON.

In recent years the CON program has come under criticism by health care providers, purchasers and others.  Studies on the program's effectiveness at reducing unnecessary capital expenditures have been mixed, and have frequently shown no significant impact on health care costs.  Providers and others complain that CON procedures are unnecessarily complex, and result in administrative expenses which are not offset by health care cost savings or increases in access or quality of health care.

SUMMARY:

Hospitals providing nursing home or home health services are required to obtain certificates of need.  Otherwise, hospitals are removed from certificate of need requirements.

Tertiary services are those which are highly specialized and require sufficient patient volume to optimize quality and improve outcomes.  The department of health, if created, or DSHS must define specific tertiary services, and develop standards to certify hospitals that provide such services.  Hospitals providing such tertiary services on or before January 1, 1989 must be automatically certified.  Their certification may be revoked only upon demonstration of clear noncompliance with certification standards adopted under this act.

EFFECT OF PROPOSED SUBSTITUTE:

Hospitals that provide tertiary services without having been certified may have their license suspended or revoked and may be found guilty of a misdemeanor.

Hospitals must obtain certificates of need when providing hospice or home dialysis services.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 23, 1989

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: Dan Rubin, DSHS (con); Dave Broderick, Hospital Association (pro); Gail Toraason, Home Care Association of Washington