00                       CS FOR HOUSE BILL NO. 407(HES)                                                                    
01 "An Act relating to the certificate of need program; relating to comprehensive health                                   
02 planning; and providing for an effective date."                                                                         
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 18.07.031(a) is repealed and reenacted to read:                                                   
05            (a)  Except as provided in (c) of this section, a person may not, unless                                     
06       authorized under the terms of a certificate of need issued by the department, make an                             
07       expenditure of                                                                                                    
08                 (1)  any amount for                                                                                     
09                      (A)  construction of a skilled nursing facility or psychiatric                                     
10            hospital;                                                                                                    
11                      (B)  an increase in the bed capacity of a skilled nursing facility                                 
12            or psychiatric hospital;                                                                                     
13                      (C)  conversion of a building or part of a building to a skilled                                   
14            nursing facility or psychiatric hospital;                                                                    
01                      (D)  conversion of a bed in a health care facility to a psychiatric                                
02            bed designated for care of a child under 21 years of age;                                                    
03                      (E)  conversion of the existing use of a bed in a health care                                      
04            facility to a new bed use other than new use as a psychiatric bed designated for                             
05            the care of a child under 21 years of age if the existing use required a                                     
06            certificate of need at the time the use was established and the health care                                  
07            facility is located in the unorganized borough or in an organized borough with                               
08            a population of less than 55,000 at the time of the proposed conversion,                                     
09            according to the latest reliable data approved by the Department of Community                                
10            and Economic Development; or                                                                                 
11                 (2)  $1,000,000 or more for                                                                             
12                      (A)  addition of a category of health services provided by a                                       
13            skilled nursing facility or a psychiatric hospital; or                                                       
14                      (B)  construction of a health care facility other than a skilled                                   
15            nursing facility or psychiatric hospital, alteration of the bed capacity of a health                         
16            care facility other than a skilled nursing facility or psychiatric hospital, or                              
17            addition of a category of health services provided by a health care facility other                           
18            than a skilled nursing facility or psychiatric hospital, if the health care facility                         
19            is located in the unorganized borough or in an organized borough with a                                      
20            population of less than 55,000 at the time of commencement of activities,                                    
21            according to the latest reliable data approved by the Department of Community                                
22            and Economic Development.                                                                                    
23    * Sec. 2.  AS 18.07.031(c) is amended to read:                                                                     
24            (c)  Notwithstanding (a) of this section, a person who is lawfully authorized to                         
25       operate [OPERATING] a health care facility [THAT IS AN AMBULATORY                                             
26       SURGICAL FACILITY] at a site may make an expenditure of any amount in order to                                    
27       replace the facility at the same site or relocate the services of that facility to a new                      
28       site in the same community without obtaining a certificate of need as long as neither                             
29       the bed capacity nor the number of categories of health services provided at the new                              
30       site or in the new facility is greater, the percentage of beds designated for each                        
31       type of use at the new site or in the new facility is not different from the                                  
01       percentage of beds designated for that type of use at the old site or in the previous                         
02       facility, and no new category of health services is provided at the new site or in                            
03       the new facility.  However, [NOTWITHSTANDING THE EXPENDITURE                                                  
04       THRESHOLD IN (a) OF THIS SECTION,] a person may not use the site from which                                       
05       the health care facility relocated for another health care facility unless the person                         
06       complies with the [AUTHORIZED UNDER A] certificate of need requirements of                                
07       (a) of this section [ISSUED BY THE DEPARTMENT].                                                               
08    * Sec. 3.  AS 18.07.035 is amended to read:                                                                        
09            Sec. 18.07.035.  Application and fees.  Application for a certificate of need                              
10       shall be made to the department upon a form provided by the department and must                                   
11       contain the information the department requires to reach a decision about whether to                          
12       issue the certificate of need [UNDER THIS CHAPTER].  Each application for a                                   
13       certificate of need must be accompanied by an application fee established by the                                  
14       department by regulation.  The department shall, by regulation, set a time limit by                           
15       which the department shall determine whether an application submitted under                                   
16       this section is complete and contains all of the information the department                                   
17       requires to reach a decision about whether to issue the certificate of need.                                  
18    * Sec. 4.  AS 18.07 is amended by adding new sections to read:                                                     
19            Sec. 18.07.037. Public hearing required.  Except as provided in                                            
20       AS 18.07.071, the department shall hold a public hearing within a reasonable time                                 
21       after determining that an application under AS 18.07.035 is complete.  By regulation,                             
22       the department shall establish                                                                                    
23                 (1)  a time limit by which a public hearing required under this section                                 
24       shall be held; and                                                                                                
25                 (2)  procedures for conducting a public hearing held under this section.                                
26            Sec. 18.07.039.  Time limit for decision on application.  Based on the                                     
27       standards for review under this chapter, the department shall, within 120 days after                              
28       determining that an application under AS 18.07.035 is complete, approve or deny the                               
29       application.                                                                                                      
30    * Sec. 5.  AS 18.07.043 is amended to read:                                                                        
31            Sec. 18.07.043.  Standard of review for applications for certificates of need                              
01       and applications to modify certificates of need [RELATING TO NURSING                                          
02       HOMES AND NURSING HOME BEDS].  (a)  The department shall develop                                                
03       review standards for an application for a certificate of need, or for a modification of a                         
04       certificate of need, issued under this chapter [FOR A HEALTH CARE FACILITY                                        
05       THAT IS A NURSING HOME OR HAS NURSING HOME BEDS].                                                                 
06            (b)  When determining whether to approve an application for a new                                        
07       certificate of need or to modify an existing certificate of need [IN DEVELOPING                               
08       THE REVIEW STANDARDS UNDER (a) OF THIS SECTION], the department may                                           
09       consider community-specific health information that may be available in a                                     
10       comprehensive health plan prepared by the department under AS 47.05.010(b)                                    
11       and shall consider whether                                                                                    
12                 (1)  a public process and existing appropriate statewide, regional, and                                 
13       local plans were included in planning and designing the project [ADDITIONAL                                   
14       NURSING HOME BEDS OR THE HEALTH CARE FACILITY];                                                                   
15                 (2)  the project will meet [ADDITIONAL NURSING HOME BEDS                                            
16       OR THE HEALTH CARE FACILITY MEETS] minimum required use rates for the                                         
17       proposed services without causing the [NEW NURSING BEDS, AND THE                                              
18       EFFECT ON] use rates for existing providers of the services to fall below minimum                             
19       required use rates [NURSING HOME BEDS];                                                                       
20                 (3)  the project [ADDITIONAL NURSING HOME BEDS OR THE                                               
21       HEALTH CARE FACILITY] demonstrates consideration of the community, regional,                                      
22       and statewide needs [FOR NEW NURSING HOME BEDS];                                                                  
23                 (4)  the project [ADDITIONAL NURSING HOME BEDS OR THE                                               
24       HEALTH CARE FACILITY] meets the minimum standards of the department that                                      
25       are designed [NUMBER OF NEW NURSING BEDS THAT SHOULD BE                                                       
26       REQUIRED IN A FACILITY] to ensure efficiency and economies of scale;                                              
27                 (5)  the project [ADDITIONAL NURSING HOME BEDS OR THE                                               
28       HEALTH CARE FACILITY] demonstrates the proposed service will provide a                                            
29       quality of care equivalent to existing community, regional, or statewide services;                                
30                 (6)  the project [ADDITIONAL NURSING HOME BEDS OR THE                                               
31       HEALTH CARE FACILITY] demonstrates financial feasibility, including long-term                                     
01       viability, and what the financial effect will be on consumers and the state; and                                  
02                 (7)  the sponsor has demonstrated cost effectiveness through                                            
03       considering the availability of appropriate, less costly alternatives of providing the                            
04       services planned.                                                                                                 
05            (c)  The department shall grant a sponsor a certificate of need or modify a                                  
06       certificate of need [THAT AUTHORIZES NURSING HOME BEDS OR THAT IS                                                 
07       FOR A HEALTH CARE FACILITY THAT IS A NURSING HOME] if the                                                         
08       department finds that the sponsor meets the standards established in or under this                                
09       chapter.                                                                                                          
10    * Sec. 6.  AS 18.07.071(b) is amended to read:                                                                     
11            (b)  The department may grant a sponsor a temporary certificate for the                                      
12       temporary operation of a category of health service if the sponsor shows by affidavit                             
13       or formal hearing                                                                                                 
14                 (1)  the necessity for early, immediate, or temporary relief; and                                       
15                 (2)  adverse effect to the public interest by reason of delay occasioned                                
16       by compliance with the requirements of AS 18.07.043 [AS 18.07.041, 18.07.043,] and                            
17       application procedures prescribed by regulations under this chapter.                                              
18    * Sec. 7.  AS 18.07.071(c) is amended to read:                                                                     
19            (c)  A temporary certificate granted under (b) of this section does not confer                               
20       vested rights on behalf of the applicant.  The department shall impose those special                              
21       limitations and restrictions concerning duration and right of extension that the                                  
22       department considers appropriate.  A temporary certificate may not be granted for a                               
23       period longer than necessary for the sponsor to obtain review of the action certified by                          
24       the temporary certificate under AS 18.07.051. Application for a certificate of need                               
25       that will be reviewed under AS 18.07.043 [AS 18.07.041 OR 18.07.043] must                                 
26       commence within 60 days after [OF] the date of issuance of the temporary certificate.                         
27    * Sec. 8.  AS 18.07.081(c) is amended to read:                                                                     
28            (c)  A certificate of need shall be suspended if an accusation is filed before the                           
29       commencement of activities authorized under AS 18.07.043 [AS 18.07.041 OR                                     
30       18.07.043] that charges that factors upon which the certificate of need was issued have                           
31       changed or new factors have been discovered that significantly alter the need for the                             
01       activity authorized.  A suspension of a certificate may not exceed 60 days.  At the end                           
02       of this period or sooner, the department shall revoke or reinstate the certificate.                               
03    * Sec. 9.  AS 18.07.081(d) is amended to read:                                                                     
04            (d)  A certificate of need may be revoked if                                                                 
05                 (1)  the sponsor has not shown continuing progress toward                                             
06       commencement of the activities authorized under AS 18.07.043 within [AS 18.07.041                             
07       OR 18.07.043 AFTER] six months after the date of issuance of the certificate;                             
08                 (2)  the applicant fails, without good cause, to complete activities                                    
09       authorized by the certificate;                                                                                    
10                 (3)  the sponsor fails to comply with [THE PROVISIONS OF] this                                          
11       chapter or regulations adopted under this chapter;                                                                
12                 (4)  the sponsor knowingly misrepresents a material fact in obtaining                                   
13       the certificate;                                                                                                  
14                 (5)  the facts charged in an accusation filed under (c) of this section are                             
15       established; or                                                                                                   
16                 (6)  the sponsor fails to provide services authorized by the terms of the                               
17       certificate.                                                                                                      
18    * Sec. 10.  AS 18.07.111(2) is amended to read:                                                                    
19                 (2)  "certificate" means a certificate of need issued by the department                                 
20       under AS 18.07.043 or 18.07.071 [AS 18.07.041, 18.07.043, OR 18.07.071];                                      
21    * Sec. 11.  AS 47.05.010 is amended by adding a new subsection to read:                                            
22            (b)  The department shall develop a comprehensive health plan for the state.                                 
23       To the maximum extent possible, the department shall compile the plan from                                        
24       information available to the department from its data bases, from the data bases of                               
25       other agencies, and from local community efforts.  The department shall prepare the                               
26       plan in a manner designed to enable the department to use community-specific health                               
27       information in the plan to assist the department in evaluating applications for                                   
28       certificates of need submitted under AS 18.07  as well as for other purposes.                                     
29    * Sec. 12.  AS 18.07.031(b) and 18.07.041 are repealed.                                                            
30    * Sec. 13.  The uncodified law of the State of Alaska is amended by adding a new section to                        
31 read:                                                                                                                   
01       COMPREHENSIVE HEALTH PLAN; LIMITATIONS.  The plan required under                                                  
02 AS 47.05.010(b), enacted by sec. 11 of this Act,                                                                        
03            (1)  is not intended by the legislature to be updated periodically;                                          
04            (2)  shall be prepared by the Department of Health and Social Services by                                    
05 January 1, 2003, and a copy of it shall be given by the department to the legislature by that                           
06 date; and                                                                                                               
07            (3)  shall be prepared by using staff and other resources of the department that                             
08 are generally available to perform the duties of the department without an additional                                   
09 appropriation specifically designated for preparation of the plan or without an additional                              
10 appropriation to fund the indirect effect on existing personnel or resources.                                           
11    * Sec. 14.  The uncodified law of the State of Alaska is amended by adding a new section to                        
12 read:                                                                                                                   
13       APPLICABILITY.  AS 18.07, as amended by secs. 1 - 10 and 12 of this Act, applies                                  
14 to applications for certificates of need that are initially filed on or after the effective date of                     
15 this Act.                                                                                                               
16    * Sec. 15.  This Act takes effect immediately under AS 01.10.070(c).