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 AS 18.07.031(a) is repealed and reenacted to read: 05 (a) Except as provided in (c) of this section, a person may not, unless 06 authorized under the terms of a certificate of need issued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).