WSR 97-18-090

PROPOSED RULES

DEPARTMENT OF HEALTH

[Filed September 3, 1997, 11:55 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-12-084.

Title of Rule: Nonprofit hospital acquisitions.

Purpose: To implement SSB 5227 by establishing a procedure by which the acquisition of a nonprofit hospital or public hospital district hospital is reviewed and approved or disapproved by the department.

Statutory Authority for Adoption: Section 14, chapter 332, Laws of 1997.

Statute Being Implemented: Section 3, chapter 332, Laws of 1997.

Summary: Proposed rule states purpose of statute and identifies fees.

Reasons Supporting Proposal: To develop fee schedule for acquisition of nonprofit hospital reviews.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Stephen A. Boruchowitz, 1112 Quince Street S.E., (360) 753-0719.

Name of Proponent: Department of Health, governmental.

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

Explanation of Rule, its Purpose, and Anticipated Effects: Establishes procedure by which acquisition of nonprofit hospitals or public health district hospitals are reviewed and approved or disapproved by the department. Processing and review fees are established. Refund schedule and attorney general fees are provided for. The department will reassess the fee structure after two completed reviews of applications or by the end of the biennium.

Proposal does not change existing rules.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Does not impact small businesses.

RCW 34.05.328 does not apply to this rule adoption. The rule does not adopt substantive provisions of law pursuant to delegated authority, the violation of which subjects the violator to a penalty or sanction; establish, alter or revoke any qualification or standard for issuance, suspension or revocation of license or permit; or adopt a new, or make significant amendments to a policy or regulatory program.

Hearing Location: Labor and Industries Building, Tumwater, on October 9, 1997, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact Arika Atkins by September 22, 1997, (360) 664-0398.

Submit Written Comments to: Stephen A. Boruchowitz, FAX (360) 664-0398, by October 9, 1997.

Date of Intended Adoption: October 10, 1997.

September 3, 1997

Bruce Miyahara

Secretary

NEW SECTION

WAC 246-312-010 Purpose. The purpose of this chapter is to implement chapter 332, Laws of 1997, the nonprofit hospital sales review program. The legislature has determined that the state has an interest to assure the continued existence of accessible, affordable health care facilities. To achieve this goal the department of health is responsible for reviewing and approving the acquisition of nonprofit hospitals by for-profit entities. The department may approve an acquisition of a nonprofit hospital only if it determines that the nonprofit hospital has taken appropriate steps to safeguard charitable assets and any proceeds of the acquisition are used for appropriate charitable health and health care purposes.

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NEW SECTION

WAC 246-312-020 Fees. (1) The department will assess on the acquiring party a nonrefundable application processing fee, a review fee and other charges as authorized in chapter 332, Laws of 1997. The fees shall consist of the following:

Processing Fees Nonrefundable

Processing Fee

Each New Application will be subject

to a $1,000

Each Amendment to an application

undergoing review will be subject

to a $ 500

Type of Acquisition Description Review Fee

Acquisition of 20% or more of the

assets of the hospital $40,000

Change in current ownership position

that results in acquiring party

holding or controlling 50% or more

of the hospital assets $50,000

Any Other Change in Ownership $60,000

Amendment to an approved Change of

Ownership $15,000

Other Fees (When Applicable) Fee Amount

Exemption Determinations $ 250

Fair Market Value Determin-

ation-Nonrefundable $ Based on

Contracted

Amount

Public Health Services District-

Voluntary Review $ To be billed

at Cost

On-Site Compliance Visit-Non-

refundable $ To be billed

at Cost

Attorney General Opinion-Non-

refundable $ As billed to

the department

by the attorney

general's office

(2) When an applicant submits a written request to withdraw an application, the department shall refund the review fee using the following schedule:

Amount of

Review Fee

Time Period For Requesting to be

Withdrawal of Application Refunded

Within 10 working days after receipt

of the completed application 100%

Between the 11th working day and the

45th working day after receipt of

the completed application 50%

After the 45th working day 0%

(3) Fees for the fair market value determination shall be paid in addition to the applicable processing and application review fees. These fees shall be based on the contracted amount for consultants with the expertise to make such an evaluation. The acquiring party is responsible for this payment. If payment of this fee is not made within ten working days following being billed, the review of the application shall be suspended until payment is made.

(4) Fees for the public health services district voluntary review shall be paid by the public health services district. These fees shall be billed at cost and must be paid within ten working days of being billed.

(5) Fees for the attorney general's opinion shall be paid in addition to the applicable processing and application review fees. These fees shall be based on the charges billed to the department and then billed to the acquiring party. Fees must be paid within ten working days of being billed or the review of the application shall be suspended until payment is made.