BILL REQ. #: S-3958.1
State of Washington | 61st Legislature | 2010 Regular Session |
Read first time 01/20/10. Referred to Committee on Health & Long-Term Care.
AN ACT Relating to emergency departments that are not physically connected to a hospital; amending RCW 70.38.025; reenacting and amending RCW 70.38.105; adding a new section to chapter 70.38 RCW; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that freestanding
emergency rooms are a growing phenomenon across the country and in this
state, as hospital networks seek to expand emergency outpatient
services into growing suburban communities.
The legislature further finds that hospital networks can use
freestanding emergency rooms to grow market share in rapidly growing
communities with an eye toward future development plans.
The legislature further finds that overdevelopment of freestanding
emergency departments could potentially undermine community hospitals
in the same service area that also serve many uninsured and
underinsured patients and may suffer a disparate impact based on
referral patterns and other business practices of the freestanding
emergency room.
The legislature further finds that there is a clear public interest
in subjecting freestanding emergency room plans to the certificate of
need process to ensure that an adequate health planning process can
occur, being mindful of existing community-based health care facilities
as well as the vital needs of rapidly growing communities for both
inpatient and outpatient health care services.
Sec. 2 RCW 70.38.105 and 2009 c 315 s 1 and 2009 c 242 s 3 are
each reenacted and amended to read as follows:
(1) The department is authorized and directed to implement the
certificate of need program in this state pursuant to the provisions of
this chapter.
(2) There shall be a state certificate of need program which is
administered consistent with the requirements of federal law as
necessary to the receipt of federal funds by the state.
(3) No person shall engage in any undertaking which is subject to
certificate of need review under subsection (4) of this section without
first having received from the department either a certificate of need
or an exception granted in accordance with this chapter.
(4) The following shall be subject to certificate of need review
under this chapter:
(a) The construction, development, or other establishment of a new
health care facility including, but not limited to, a hospital
constructed, developed, or established by a health maintenance
organization or by a combination of health maintenance organizations
except as provided in subsection (7)(a) of this section;
(b) The sale, purchase, or lease of part or all of any existing
hospital as defined in RCW 70.38.025 including, but not limited to, a
hospital sold, purchased, or leased by a health maintenance
organization or by a combination of health maintenance organizations
except as provided in subsection (7)(b) of this section;
(c) The construction, development, or other establishment of a
freestanding emergency room, including the continued operation any
existing freestanding emergency room that was established before July
1, 2010, upon the next relicensing period;
(d) The sale, purchase, or lease of part or all of any existing
freestanding emergency room;
(e) Any capital expenditure for the construction, renovation, or
alteration of a nursing home which substantially changes the services
of the facility after January 1, 1981, provided that the substantial
changes in services are specified by the department in rule;
(((d))) (f) Any capital expenditure for the construction,
renovation, or alteration of a nursing home which exceeds the
expenditure minimum as defined by RCW 70.38.025. However, a capital
expenditure which is not subject to certificate of need review under
(a), (b), (((c))) (e), or (((e))) (g) of this subsection and which is
solely for any one or more of the following is not subject to
certificate of need review:
(i) Communications and parking facilities;
(ii) Mechanical, electrical, ventilation, heating, and air
conditioning systems;
(iii) Energy conservation systems;
(iv) Repairs to, or the correction of, deficiencies in existing
physical plant facilities which are necessary to maintain state
licensure, however, other additional repairs, remodeling, or
replacement projects that are not related to one or more deficiency
citations and are not necessary to maintain state licensure are not
exempt from certificate of need review except as otherwise permitted by
(((d))) (f)(vi) of this subsection or RCW 70.38.115(13);
(v) Acquisition of equipment, including data processing equipment,
which is not or will not be used in the direct provision of health
services;
(vi) Construction or renovation at an existing nursing home which
involves physical plant facilities, including administrative, dining
areas, kitchen, laundry, therapy areas, and support facilities, by an
existing licensee who has operated the beds for at least one year;
(vii) Acquisition of land; and
(viii) Refinancing of existing debt;
(((e))) (g) A change in bed capacity of a health care facility
which increases the total number of licensed beds or redistributes beds
among acute care, nursing home care, and boarding home care if the bed
redistribution is to be effective for a period in excess of six months,
or a change in bed capacity of a rural health care facility licensed
under RCW 70.175.100 that increases the total number of nursing home
beds or redistributes beds from acute care or boarding home care to
nursing home care if the bed redistribution is to be effective for a
period in excess of six months. A health care facility certified as a
critical access hospital under 42 U.S.C. 1395i-4 may increase its total
number of licensed beds to the total number of beds permitted under 42
U.S.C. 1395i-4 for acute care and may redistribute beds permitted under
42 U.S.C. 1395i-4 among acute care and nursing home care without being
subject to certificate of need review. If there is a nursing home
licensed under chapter 18.51 RCW within twenty-seven miles of the
critical access hospital, the critical access hospital is subject to
certificate of need review except for:
(i) Critical access hospitals which had designated beds to provide
nursing home care, in excess of five swing beds, prior to December 31,
2003;
(ii) Up to five swing beds; or
(iii) Up to twenty-five swing beds for critical access hospitals
which do not have a nursing home licensed under chapter 18.51 RCW
within the same city or town limits. Up to one-half of the additional
beds designated for swing bed services under this subsection (4)(((e)))
(g)(iii) may be so designated before July 1, 2010, with the balance
designated on or after July 1, 2010.
Critical access hospital beds not subject to certificate of need
review under this subsection (4)(((e))) (g) will not be counted as
either acute care or nursing home care for certificate of need review
purposes. If a health care facility ceases to be certified as a
critical access hospital under 42 U.S.C. 1395i-4, the hospital may
revert back to the type and number of licensed hospital beds as it had
when it requested critical access hospital designation;
(((f))) (h) Any new tertiary health services which are offered in
or through a health care facility or rural health care facility
licensed under RCW 70.175.100, and which were not offered on a regular
basis by, in, or through such health care facility or rural health care
facility within the twelve-month period prior to the time such services
would be offered;
(((g))) (i) Any expenditure for the construction, renovation, or
alteration of a nursing home or change in nursing home services in
excess of the expenditure minimum made in preparation for any
undertaking under this subsection (4) ((of this section)) and any
arrangement or commitment made for financing such undertaking.
Expenditures of preparation shall include expenditures for
architectural designs, plans, working drawings, and specifications.
The department may issue certificates of need permitting predevelopment
expenditures, only, without authorizing any subsequent undertaking with
respect to which such predevelopment expenditures are made; and
(((h))) (j) Any increase in the number of dialysis stations in a
kidney disease center.
(5) The department is authorized to charge fees for the review of
certificate of need applications and requests for exemptions from
certificate of need review. The fees shall be sufficient to cover the
full cost of review and exemption, which may include the development of
standards, criteria, and policies.
(6) No person may divide a project in order to avoid review
requirements under any of the thresholds specified in this section.
(7)(a) The requirement that a health maintenance organization
obtain a certificate of need under subsection (4)(a) of this section
for the construction, development, or other establishment of a hospital
does not apply to a health maintenance organization operating a group
practice that has been continuously licensed as a health maintenance
organization since January 1, 2009;
(b) The requirement that a health maintenance organization obtain
a certificate of need under subsection (4)(b) of this section to sell,
purchase, or lease a hospital does not apply to a health maintenance
organization operating a group practice that has been continuously
licensed as a health maintenance organization since January 1, 2009.
NEW SECTION. Sec. 3 A new section is added to chapter 70.38 RCW
to read as follows:
To promote the stability of Washington's health care delivery
system, by January 1, 2011, the department of health shall adopt rules
establishing criteria for the issuance of a certificate of need for
freestanding emergency rooms, as provided in RCW 70.38.105.
Sec. 4 RCW 70.38.025 and 2000 c 175 s 22 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, hospice care centers,
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 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))) (4); or as a
psychiatric hospital under chapter 71.12 RCW.
(16) "Freestanding emergency room" means an emergency department
that is not physically connected or adjacent to a hospital licensed
under chapter 70.41 RCW.