AN
ACT Relating to the notice requirements for bringing beds out of the bank under
certificate of need provisions; and amending RCW 70.38.111 and 70.38.025.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
70.38.111 and 1995 1st sp.s. c 18 s 71 are each amended to read as follows:
(1)
The department shall not require a certificate of need for the offering of an
inpatient tertiary health service by:
(a)
A health maintenance organization or a combination of health maintenance
organizations if (i) the organization or combination of organizations has, in
the service area of the organization or the service areas of the organizations
in the combination, an enrollment of at least fifty thousand individuals, (ii)
the facility in which the service will be provided is or will be geographically
located so that the service will be reasonably accessible to such enrolled
individuals, and (iii) at least seventy-five percent of the patients who can
reasonably be expected to receive the tertiary health service will be
individuals enrolled with such organization or organizations in the
combination;
(b)
A health care facility if (i) the facility primarily provides or will provide
inpatient health services, (ii) the facility is or will be controlled, directly
or indirectly, by a health maintenance organization or a combination of health
maintenance organizations which has, in the service area of the organization or
service areas of the organizations in the combination, an enrollment of at
least fifty thousand individuals, (iii) the facility is or will be
geographically located so that the service will be reasonably accessible to
such enrolled individuals, and (iv) at least seventy-five percent of the
patients who can reasonably be expected to receive the tertiary health service
will be individuals enrolled with such organization or organizations in the
combination; or
(c)
A health care facility (or portion thereof) if (i) the facility is or will be
leased by a health maintenance organization or combination of health
maintenance organizations which has, in the service area of the organization or
the service areas of the organizations in the combination, an enrollment of at
least fifty thousand individuals and, on the date the application is submitted
under subsection (2) of this section, at least fifteen years remain in the term
of the lease, (ii) the facility is or will be geographically located so that
the service will be reasonably accessible to such enrolled individuals, and
(iii) at least seventy-five percent of the patients who can reasonably be
expected to receive the tertiary health service will be individuals enrolled
with such organization;
if,
with respect to such offering or obligation by a nursing home, the department
has, upon application under subsection (2) of this section, granted an
exemption from such requirement to the organization, combination of
organizations, or facility.
(2)
A health maintenance organization, combination of health maintenance
organizations, or health care facility shall not be exempt under subsection (1)
of this section from obtaining a certificate of need before offering a tertiary
health service unless:
(a)
It has submitted at least thirty days prior to the offering of services
reviewable under RCW 70.38.105(4)(d) an application for such exemption; and
(b)
The application contains such information respecting the organization,
combination, or facility and the proposed offering or obligation by a nursing
home as the department may require to determine if the organization or
combination meets the requirements of subsection (1) of this section or the
facility meets or will meet such requirements; and
(c)
The department approves such application. The department shall approve or
disapprove an application for exemption within thirty days of receipt of a
completed application. In the case of a proposed health care facility (or
portion thereof) which has not begun to provide tertiary health services on the
date an application is submitted under this subsection with respect to such
facility (or portion), the facility (or portion) shall meet the applicable
requirements of subsection (1) of this section when the facility first provides
such services. The department shall approve an application submitted under
this subsection if it determines that the applicable requirements of subsection
(1) of this section are met.
(3)
A health care facility (or any part thereof) with respect to which an exemption
was granted under subsection (1) of this section may not be sold or leased and
a controlling interest in such facility or in a lease of such facility may not
be acquired and a health care facility described in (1)(c) which was granted an
exemption under subsection (1) of this section may not be used by any person
other than the lessee described in (1)(c) unless:
(a)
The department issues a certificate of need approving the sale, lease,
acquisition, or use; or
(b)
The department determines, upon application, that (i) the entity to which the
facility is proposed to be sold or leased, which intends to acquire the
controlling interest, or which intends to use the facility is a health
maintenance organization or a combination of health maintenance organizations
which meets the requirements of (1)(a)(i), and (ii) with respect to such
facility, meets the requirements of (1)(a)(ii) or (iii) or the requirements of
(1)(b)(i) and (ii).
(4)
In the case of a health maintenance organization, an ambulatory care facility,
or a health care facility, which ambulatory or health care facility is
controlled, directly or indirectly, by a health maintenance organization or a
combination of health maintenance organizations, the department may under the
program apply its certificate of need requirements only to the offering of inpatient
tertiary health services and then only to the extent that such offering is not
exempt under the provisions of this section.
(5)(a)
The department shall not require a certificate of need for the construction,
development, or other establishment of a nursing home, or the addition of beds
to an existing nursing home, that is owned and operated by a continuing care
retirement community that:
(i)
Offers services only to contractual members;
(ii)
Provides its members a contractually guaranteed range of services from
independent living through skilled nursing, including some assistance with
daily living activities;
(iii)
Contractually assumes responsibility for the cost of services exceeding the
member's financial responsibility under the contract, so that no third party,
with the exception of insurance purchased by the retirement community or its
members, but including the medicaid program, is liable for costs of care even
if the member depletes his or her personal resources;
(iv)
Has offered continuing care contracts and operated a nursing home continuously
since January 1, 1988, or has obtained a certificate of need to establish a
nursing home;
(v)
Maintains a binding agreement with the state assuring that financial liability
for services to members, including nursing home services, will not fall upon
the state;
(vi)
Does not operate, and has not undertaken a project that would result in a
number of nursing home beds in excess of one for every four living units
operated by the continuing care retirement community, exclusive of nursing home
beds; and
(vii)
Has obtained a professional review of pricing and long-term solvency within the
prior five years which was fully disclosed to members.
(b)
A continuing care retirement community shall not be exempt under this
subsection from obtaining a certificate of need unless:
(i)
It has submitted an application for exemption at least thirty days prior to
commencing construction of, is submitting an application for the licensure of,
or is commencing operation of a nursing home, whichever comes first; and
(ii)
The application documents to the department that the continuing care retirement
community qualifies for exemption.
(c)
The sale, lease, acquisition, or use of part or all of a continuing care
retirement community nursing home that qualifies for exemption under this
subsection shall require prior certificate of need approval to qualify for
licensure as a nursing home unless the department determines such sale, lease,
acquisition, or use is by a continuing care retirement community that meets the
conditions of (a) of this subsection.
(6)
A rural hospital, as defined by the department, reducing the number of licensed
beds to become a rural primary care hospital under the provisions of Part A
Title XVIII of the Social Security Act Section 1820, 42 U.S.C., 1395c et seq.
may, within three years of the reduction of beds licensed under chapter 70.41
RCW, increase the number of licensed beds to no more than the previously
licensed number without being subject to the provisions of this chapter.
(7)
A rural health care facility licensed under RCW 70.175.100 formerly licensed as
a hospital under chapter 70.41 RCW may, within three years of the effective
date of the rural health care facility license, apply to the department for a
hospital license and not be subject to the requirements of RCW 70.38.105(4)(a)
as the construction, development, or other establishment of a new hospital,
provided there is no increase in the number of beds previously licensed under
chapter 70.41 RCW and there is no redistribution in the number of beds used for
acute care or long-term care, the rural health care facility has been in
continuous operation, and the rural health care facility has not been purchased
or leased.
(8)(a)
A nursing home that voluntarily reduces the number of its licensed beds to
provide assisted living, licensed boarding home care, adult day care, adult day
health, respite care, hospice, outpatient therapy services, congregate meals,
home health, or senior wellness clinic, or to reduce to one or two the number
of beds per room or to otherwise enhance the quality of life for residents in
the nursing home, may convert the original facility or portion of the facility
back, and thereby increase the number of nursing home beds to no more than the
previously licensed number of nursing home beds without obtaining a certificate
of need under this chapter, provided the facility has been in continuous
operation and has not been purchased or leased. Any conversion to the original
licensed bed capacity, or to any portion thereof, shall comply with the same
life and safety code requirements as existed at the time the nursing home
voluntarily reduced its licensed beds; unless waivers from such requirements
were issued, in which case the converted beds shall reflect the conditions or
standards that then existed pursuant to the approved waivers.
(b)
To convert beds back to nursing home beds under this subsection, the nursing
home must:
(i)
Give notice of its intent to preserve conversion options to the department of
health no later than thirty days after the effective date of the license
reduction; and
(ii)
Give notice to the department of health and to the department of social and
health services of the intent to convert beds back. If construction is
required for the conversion of beds back, the notice of intent to convert beds
back must be given ((no later than two years)), at a minimum, one
year prior to the effective date of license modification reflecting the
restored beds; otherwise, the notice must be given ((no later than one year))
a minimum of ninety days prior to the effective date of license
modification reflecting the restored beds. Prior to any license
modification to convert beds back to nursing home beds under this section, the
licensee must demonstrate that the nursing home meets the certificate of need
exemption requirements of this section.
The
term "construction," as used in (b)(ii) of this subsection, is
limited to those projects that are expected to equal or exceed the expenditure
minimum amount, as determined under this chapter.
(c)
Conversion of beds back under this subsection must be completed no later than
four years after the effective date of the license reduction. However, for
good cause shown, the four-year period for conversion may be extended by the
department of health for one additional four-year period.
(d)
Nursing home beds that have been voluntarily reduced under this section shall
be counted as available nursing home beds for the purpose of evaluating need
under RCW 70.38.115(2) (a) and (k) so long as the facility retains the ability
to convert them back to nursing home use under the terms of this section.
(e)
When a building owner has secured an interest in the nursing home beds, which
are intended to be voluntarily reduced by the licensee under (a) of this
subsection, the applicant shall provide the department with a written statement
indicating the building owner's approval of the bed reduction.
Sec.
2. RCW
70.38.025 and 1991 c 158 s 1 are each amended to read as follows:
When
used in this chapter, the terms defined in this section shall have the meanings
indicated.
(1)
"Board of health" means the state board of health created pursuant to
chapter 43.20 RCW.
(2)
"Capital expenditure" is an expenditure, including a force account
expenditure (i.e., an expenditure for a construction project undertaken by a
nursing home facility as its own contractor) which, under generally accepted
accounting principles, is not properly chargeable as an expense of operation or
maintenance. Where a person makes an acquisition under lease or comparable
arrangement, or through donation, which would have required review if the
acquisition had been made by purchase, such expenditure shall be deemed a
capital expenditure. Capital expenditures include donations of equipment or
facilities to a nursing home facility which if acquired directly by such
facility would be subject to certificate of need review under the provisions of
this chapter and transfer of equipment or facilities for less than fair market
value if a transfer of the equipment or facilities at fair market value would
be subject to such review. The cost of any studies, surveys, designs, plans,
working drawings, specifications, and other activities essential to the
acquisition, improvement, expansion, or replacement of any plant or equipment
with respect to which such expenditure is made shall be included in determining
the amount of the expenditure.
(3)
"Continuing care retirement community" means an entity which provides
shelter and services under continuing care contracts with its members and which
sponsors or includes a health care facility or a health service. A
"continuing care contract" means a contract to provide a person, for
the duration of that person's life or for a term in excess of one year, shelter
along with nursing, medical, health-related, or personal care services, which
is conditioned upon the transfer of property, the payment of an entrance fee to
the provider of such services, or the payment of periodic charges for the care
and services involved. A continuing care contract is not excluded from this
definition because the contract is mutually terminable or because shelter and
services are not provided at the same location.
(4)
"Department" means the department of health.
(5)
"Expenditure minimum" means, for the purposes of the certificate of
need program, one million dollars adjusted by the department by rule to reflect
changes in the United States department of commerce composite construction cost
index; or a lesser amount required by federal law and established by the
department by rule.
(6)
"Health care facility" means hospices, hospitals, psychiatric
hospitals, nursing homes, kidney disease treatment centers, ambulatory surgical
facilities, and home health agencies, and includes such facilities when owned
and operated by a political subdivision or instrumentality of the state and
such other facilities as required by federal law and implementing regulations,
but does not include ((Christian Science sanatoriums operated, listed, or
certified by the First Church of Christ Scientist, Boston, Massachusetts)) any
health facility or institution conducted by and for those who rely exclusively
upon treatment by prayer or spiritual means in accordance with the creed or
tenets of any well-recognized church or religious denomination, or any health
facility or institution operated for the exclusive care of members of a convent
as defined in RCW 84.36.800 or rectory, monastery, or other institution
operated for the care of members of the clergy. In addition, the term does
not include any nonprofit hospital: (a) Which is operated exclusively to
provide health care services for children; (b) which does not charge fees for
such services; and (c) if not contrary to federal law as necessary to the
receipt of federal funds by the state.
(7)
"Health maintenance organization" means a public or private
organization, organized under the laws of the state, which:
(a)
Is a qualified health maintenance organization under Title XIII, section
1310(d) of the Public Health Services Act; or
(b)(i)
Provides or otherwise makes available to enrolled participants health care
services, including at least the following basic health care services: Usual
physician services, hospitalization, laboratory, x-ray, emergency, and
preventive services, and out-of-area coverage; (ii) is compensated (except for
copayments) for the provision of the basic health care services listed in
(b)(i) to enrolled participants by a payment which is paid on a periodic basis
without regard to the date the health care services are provided and which is
fixed without regard to the frequency, extent, or kind of health service
actually provided; and (iii) provides physicians' services primarily (A)
directly through physicians who are either employees or partners of such
organization, or (B) through arrangements with individual physicians or one or
more groups of physicians (organized on a group practice or individual practice
basis).
(8)
"Health services" means clinically related (i.e., preventive,
diagnostic, curative, rehabilitative, or palliative) services and includes
alcoholism, drug abuse, and mental health services and as defined in federal
law.
(9)
"Health service area" means a geographic region appropriate for
effective health planning which includes a broad range of health services.
(10)
"Person" means an individual, a trust or estate, a partnership, a
corporation (including associations, joint stock companies, and insurance
companies), the state, or a political subdivision or instrumentality of the
state, including a municipal corporation or a hospital district.
(11)
"Provider" generally means a health care professional or an organization,
institution, or other entity providing health care but the precise definition
for this term shall be established by rule of the department, consistent with
federal law.
(12)
"Public health" means the level of well-being of the general
population; those actions in a community necessary to preserve, protect, and
promote the health of the people for which government is responsible; and the
governmental system developed to guarantee the preservation of the health of
the people.
(13)
"Secretary" means the secretary of health or the secretary's
designee.
(14)
"Tertiary health service" means a specialized service that meets
complicated medical needs of people and requires sufficient patient volume to
optimize provider effectiveness, quality of service, and improved outcomes of
care.
(15)
"Hospital" means any health care institution which is required to
qualify for a license under RCW 70.41.020(2); or as a psychiatric hospital
under chapter 71.12 RCW.
