TITLE 12. HEALTH

STATE BOARD OF HEALTH

Fast-Track Regulation

Title of Regulation: 12VAC5-220. Virginia Medical Care Facilities Certificate of Public Need Rules and Regulations (amending 12VAC5-220-10, 12VAC5-220-105, 12VAC5-220-110, 12VAC5-220-180, 12VAC5-220-355; adding 12VAC5-220-95).

Statutory Authority: §§ 32.1-12 and 32.1-102.2 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: June 8, 2022.

Effective Date: June 23, 2022.

Agency Contact: Erik Bodin, Director, Division of Certificate of Public Need, Virginia Department of Health, 9960 Mayland Drive, Suite 401, Richmond, VA 23233, telephone (804) 367-1889, or email erik.bodin@vdh.virginia.gov.

Basis: This regulation is promulgated under the authority of §§ 32.1-12 and 32.1-102.2 A 4 of the Code of Virginia. Section 32.1-12 of the Code of Virginia grants the State Board of Health the legal authority to make, adopt, promulgate, and enforce such regulations as may be necessary to carry out the provisions of Title 32.1 of the Code of Virginia and other laws of the Commonwealth administered by the board, the commissioner, or the department.

Chapter 1271 of the 2020 Acts of Assembly made extensive revisions to Article 1.1 (§ 32.1-102.1 et seq.) of Chapter 4 of Title 32.1 of the Code of Virginia, which governs the Certificate of Public Need (COPN) program. Section 32.1-102.2 A 5 of the Code of Virginia previously granted the board the authority to establish a fee schedule for COPN applications, but the fees were capped at the lesser of 1.0% of the proposed expenditure for the project or $20,000; this fee cap was created in 1996 and was an increase from the prior fee cap of $10,000. With the amendments introduced by Chapter 1271, the authority to establish a fee schedule has been renumbered as § 32.1-102.2 A 5 of the Code of Virginia, expanded to include registration applications, and the fee cap removed. Chapter 1271 also increased the review interval for the State Health Services Plan from four years to two years and placed new requirements on the department to have a publicly available electronic inventory of COPN-authorized capacity.

Purpose: The rationale or justification of the amendments is that the COPN program should be primarily, if not entirely, supported by fee revenue rather than general funds. The specific reasons the amendments are essential to protect the health, safety, or welfare of citizens is that the continued financial health of the COPN program ensures that the health care marketplace is not flooded with unneeded medical facilities or equipment and that charity care is being provided to indigent patients. There is a minimum patient volume needed to ensure continued competency of staff providing care, which is a consideration of COPN programs staff when evaluating COPN requests; COPNs are also conditioned on the provision of a prescribed amount of charity care to indigent patients, which allows health care to be accessible to more patients. The goal of the amendments is to ensure that the Virginia Department of Health receives sufficient revenue to support its COPN program and the mandated activities that the COPN program carries out. The problem the amendments are intended to solve is to update a fee cap that has not been changed in over 20 years and to create a fee for the registration process that currently lacks one.

Rationale for Using Fast-Track Rulemaking Process: It is anticipated that this action will be noncontroversial and therefore appropriate for the fast-track rulemaking process because the fee being charged for registration applications is nominal; the fee being charged for COPN applications retains a fee cap (although it has been adjusted higher) and still utilizes a formula of the lesser of 1.0% of the proposed project expenditure or the fee cap.

Substance: The amendments repeal of the definition for application fee, add a new section that creates a fee schedule for COPN applications and registration applications, and specify that the registration has to be accompanied by the fee prescribed in 12VAC5-220-95, the newly added section.

Issues: The primary advantage to the public is a sufficiently funded COPN program that can regulate the health care marketplace that maintains and updates the State Health Services Plan and that monitors compliance with charity care conditions on COPNs. The primary disadvantage to the public is the assessment of higher fees for COPN projects if the project cost is in excess of $2 million. The primary advantage to the department and the Commonwealth is that the COPN program will have sufficient fee revenue to support its current staff, the two new full-time employees, and the new mandates that the COPN program must meet. There is no primary disadvantage to the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. In response to Chapter 1271 of the 2020 Acts of Assembly,¹ the State Board of Health (Board) proposes to increase the cap on the fee for applications (application fee) for a Certificate of Public Need (COPN), and to establish a new fee for registrations (registration fee).

Background. This regulation requires health care providers seeking to open or expand a health care facility in Virginia to demonstrate that the community needs the services the facility would deliver and to receive approval from the State Health Commissioner. Approval is needed for projects involving services such as general acute care, perinatal, diagnostic imaging, cardiac, general surgical, organ transplantation, medical rehabilitation, psychiatric/substance abuse, mental retardation, and nursing facility.

The COPN program is supported by fees. Chapter 1271 removed the statutory restrictions on the application fee: a minimum fee of $1,000 and a maximum fee of not more than one percent of the proposed expenditure for the project or $20,000, whichever was less. This legislation also expanded the authority of the Board to assess a registration fee (in addition to the already existing application fee for certification). Moreover, the legislation decreased the review interval for the State Health Services Plan (formerly the State Medical Facilities Plan) from four years to two years, and placed new requirements on the Virginia Department of Health (VDH) to have a publicly available electronic inventory of COPN-authorized capacity.

According to the Board, the legislative changes require an additional two full-time-equivalent (FTE) positions. In order to support the existing COPN program, the new program obligations, and the new FTEs, the Board proposes to 1) revise the application fee to one percent of the proposed expenditure for the project, but not less than $1,000 and no more than $60,000 and 2) establish a registration fee of $70 for certain capital expenditures, the addition of medical equipment and services, and replacement of existing medical equipment.

Estimated Benefits and Costs. According to the Board, the fiscal year (FY) 2020 budget to administer the COPN program was $981,368. After adding two new FTEs (at $85,417 each) and other adjustments, the program's "annual revenue target" for FY 2021 is now $1,189,849. The number of applications received in the last five years has varied from a low of 38 to a high of 61, with 46 being the average. Based on historical data, setting the maximum application fee at $60,000 would be $4,751 short of the target in a year with the lowest expected number (38) of applications, and would exceed the target by $244,743 in a year with an average number (46) of expected applications.

It appears the Board has used the lowest expected number of applications (38) as the basis for establishing the $60,000 fee cap. This results in part from a limitation on program funding that prevents the program from retaining from one year to the next any unspent revenues in excess of one month's operating expenses. This limitation on "carryforward" is found in Item 300 A.1 of the 2020 Appropriation Act,² which provides that any application fees in excess of the amount required to operate the COPN program (less one month's operating expenses) shall not be retained by the program but shall instead be provided to the regional health planning agencies (RHPAs) as supplemental funding. For example, given the current statutory framework, if the actual number of applications turns out to be the average (46) rather than the lowest (38), the program would generate $244,743 in excess revenues. Pursuant to the budget language, the program would be allowed to keep $99,154 (one month's operating expenses) and would transfer the remaining $145,589 to the RHPAs. According to the Board, there used to be five RHPAs statewide, but currently only one RHPA, the Health Systems Agency of Northern Virginia, remains active.

The main effect of the revised application fee schedule is to increase the fee cap from $20,000 to $60,000. As before, the actual amount of the fee would be equal to one percent of the project's costs. Therefore, the proposed change would have a larger effect as the cost of the project increases. Projects with capital expenditures of $2 million or less would not be affected as they would continue to pay an application fee of no more than $20,000. Projects with a cost of between $2 million and $6 million would be assessed an application fee that would exceed the previous cap of $20,000, but would be less than the new cap of $60,000. Lastly, projects with a cost of greater than $6 million would be assessed an application fee of $60,000, which would represent an additional $40,000 in comparison to the fee that would have been charged under the previous cap of $20,000. In FY 2020, 63% of projects seeking COPN authorization had estimated capital costs of greater than $2 million, and thus would have paid a higher fee amount under the new cap proposed by the Board.

The Board also proposes to establish a new $70 registration fee for certain capital expenditures, the addition of medical equipment and services, and replacement of existing medical equipment. Currently, registration is required, but no fee is assessed. In the past five years, VDH has issued an average of 30 registrations per year. As a result, it appears that in a typical year only $2,100 in new revenues would be collected from the proposed registration fee; this equates to 0.18% of the program's $1,189,849 "annual revenue target." It is understandable that registration process results in costs that are separate and apart from the application process, and as such these costs could be estimated from available data and so assessed. However, the introduction of a brand new fee would also be accompanied by administrative complexities in assessing it, keeping track of it, depositing it, and correcting any errors in its administration both for VDH and the regulated entities. It is not clear whether the administrative costs to assessing a new fee, given the small revenue impact relative to overall program revenues, would outweigh the benefits from implementing it.

Businesses and Other Entities Affected. The individuals, businesses, or other entities likely to be directly affected by the regulatory change are those that seek to apply for a COPN for projects that are valued at more than $2 million, and also those that seek registration of qualified projects. This potentially includes hospitals, nursing homes, intermediate care facilities for individuals with intellectual disabilities (ICF/IIDs), and some physician's offices. There are 104 general hospitals, 65 outpatient surgical hospitals, eight psychiatric hospitals, 283 nursing homes, 61 ICF/IIDs, and 37,567 doctors of medicine in the Commonwealth. In the past five years, the number of COPN applications ranged from a low of 38 to a high of 61 per year, 46 being the average. Of those, 63% were projects with greater than $2 million capital expenditures. In addition, approximately 30 registrations have been issued per year on average. An adverse economic impact³ on such affected entities is therefore indicated.

Additionally, to the extent proposed fee changes result in excess revenue more than the program's one month's operating expenses, the RHPA may receive supplemental funding.

Small Businesses⁴ Affected.

Types and Estimated Number of Small Businesses Affected. According to VDH, no data are available to indicate how many doctors of medicine operate a physician's office, and how many of that number would be engaging in services or utilizing equipment that would require either COPN application or registration; however, it is likely that all doctors of medicine would qualify as a small business if they did operate a physician's office. Over the past five years, COPN requests from physician groups made up an average of 18.85 of all requests, which translates to an average of 8.8 requests per year.

Costs and Other Effects. The costs and other effects on doctors of medicine that would qualify as a small business if they did operate a physician's office would be the additional fees for applications involving more than $2 million and the $70 registration fee for services or equipment requiring registration as discussed.

Alternative Method that Minimizes Adverse Impact. Given the small relative size of the expected revenue from the registration fee as a portion of total program revenues and the implied recordkeeping costs and other administrative complexities, it appears this fee could be eliminated without any discernible negative impact on the COPN program.

Localities⁵ Affected.⁶ A locality would be affected by the proposed changes to the extent it is involved in medical services or equipment requiring COPN application or registration. According to VDH, there are no pending applications involving a locality. However, there were three COPN authorizations in the past 25 years that could be identified as issued to a locality: in 2003 to Bedford County for nursing home beds, in 2004 to Orange County for nursing home beds, and in 2005 to the City of Virginia Beach for a 24 bed ICF/IID.

Projected Impact on Employment. The proposed amendments would provide direct funding for two full time program staff at VDH.

Effects on the Use and Value of Private Property. The proposed increase in COPN application fees and the establishment of a new registration fee would add to the costs of projects requiring such fees. Consequently, the value of the entities subject to the higher application fee and the new registration fee may be moderately reduced. The proposed amendments do not appear to directly affect real estate development costs.

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¹https://lis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP1271

²https://budget.lis.virginia.gov/item/2020/2/HB5005/Chapter/1/300/

³Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

⁴Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁵"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁶Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Virginia Department of Health (VDH) has reviewed the economic impact analysis (EIA) prepared by the Department of Planning and Budget (DPB). VDH concurs in part and disagrees in part with the EIA. VDH disagrees with the DPB's EIA to the extent that it asserts the $70 registration fee for services or equipment requiring registration should be eliminated. DPB contends that eliminating this $70 registration fee would not have "any discernible impact on the Certificate of Public Need (COPN) program" because the expected revenue from this fee is small by comparison to the other application fees proposed in this regulatory action. VDH believes that any "implied recordkeeping costs and other administrative complexities" would be covered by the $70 registration fee. VDH also asserts that there is an intangible benefit of the $70 registration fee, namely that the assessment of a fee conveys the level of importance attached to the action and accounts for the Commonwealth's time in processing the registration that benefits the constituent facility. Fees, including the registration fees, were set at the minimum amount to cover the cost to the agency for performing the tasks. While the proposed registration fees are nominal, they do support the concept that the regulated facility pays for the process of regulation, rather than relying on general funds from taxpayers.

Summary:

Pursuant to Chapter 1271 of the 2020 Acts of Assembly, the amendments create a fee schedule for the Certificate of Public Need program and revise the fee cap on applications.

12VAC5-220-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Acquisition" means an expenditure of $600,000 or more that changes the ownership of a medical care facility. It shall also include the donation or lease of a medical care facility. An acquisition of a medical care facility shall not include a capital expenditure involving the purchase of stock. See 12VAC5-220-120.

"Amendment" means any modification to an application that is made following the public hearing and prior to the issuance of a certificate and includes those factors that constitute a significant change as defined in this chapter. An amendment shall not include a modification to an application that serves to reduce the scope of a project.

"Applicant" means the owner of an existing medical care facility or the sponsor of a proposed medical care facility project submitting an application for a certificate of public need.

"Application" means a prescribed format for the presentation of data and information deemed necessary by the board to determine a public need for a medical care facility project.

"Application fees" means fees required for a project application and application for a significant change. Fees shall not exceed the lesser of 1.0% of the proposed capital expenditure or cost increase for the project or $20,000.

"Board" means the State Board of Health.

"Capital expenditure" means any expenditure by or in behalf of a medical care facility that, under generally accepted accounting principles, is not properly chargeable as an expense of operation and maintenance. Such expenditure shall also include a series of related expenditures during a 12-month period or a financial obligation or a series of related financial obligations made during a 12-month period by or in behalf of a medical care facility. Capital expenditures need not be made by a medical care facility so long as they are made in behalf of a medical care facility by any person. See definition of "person."

"Certificate of public need" means a document that legally authorizes a medical care facility project as defined herein and which that is issued by the commissioner to the owner of such project.

"Clinical health service" means a single diagnostic, therapeutic, rehabilitative, preventive, or palliative procedure as defined in § 32.1-102.1 of the Code of Virginia.

"Commissioner" means the State Health Commissioner who has authority to make a determination respecting the issuance or revocation of a certificate.

"Competing applications" means applications for the same or similar services and facilities that are proposed for the same planning district or medical service area and which that are in the same review cycle. See 12VAC5-220-220.

"Completion" means conclusion of construction activities necessary for substantial performance of the contract.

"Construction" means the building of a new medical facility or the expansion, remodeling, or alteration of an existing medical care facility.

"Construction, initiation of" means that a project shall be considered under construction for the purpose of certificate extension determinations upon the presentation of evidence by the owner of: (i) a signed construction contract; (ii) the completion of short term financing and a commitment for long term (permanent) financing when applicable; (iii) the completion of predevelopment site work; and (iv) the completion of building foundations.

"Date of issuance" means the date of the commissioner's decision awarding a certificate of public need.

"Department" means the Virginia Department of Health.

"Designated medically underserved areas" means (i) areas designated as medically underserved areas pursuant to § 32.1-122.5 of the Code of Virginia; (ii) federally designated Medically Underserved Areas (MUA); or (iii) federally designated Health Professional Shortage Areas (HPSA).

"Ex parte" means any meeting that takes place between (i) any person acting in behalf of the applicant or holder of a certificate of public need or any person opposed to the issuance or in favor of the revocation of a certificate of public need and (ii) any person who has authority in the department to make a decision respecting the issuance or revocation of a certificate of public need for which the department has not provided 10 days written notification to opposing parties of the time and place of such meeting. An ex parte contact shall not include a meeting between the persons identified in clause (i) and staff of the department.

"Gamma knife surgery" means stereotactic radiosurgery, where stereotactic radiosurgery is the noninvasive therapeutic procedure performed by directing radiant energy beams from any source at a treatment target in the head to produce tissue destruction. See definition of "project."

"Health planning region" means a contiguous geographical area of the Commonwealth as defined in § 32.1-102.1 of the Code of Virginia.

"Informal fact-finding conference" means a conference held pursuant to § 2.2-4019 of the Code of Virginia.

"Inpatient beds" means accommodations within a medical care facility with continuous support services (such as food, laundry, housekeeping) and staff to provide health or health-related services to patients who generally remain in the medical care facility in excess of 24 hours. Such accommodations are known by varying nomenclatures including but not limited to: nursing beds, intensive care beds, minimal or self care beds, isolation beds, hospice beds, observation beds equipped and staffed for overnight use, and obstetric, medical, surgical, psychiatric, substance abuse, medical rehabilitation, and pediatric beds, including pediatric bassinets and incubators. Bassinets and incubators in a maternity department and beds located in labor or birthing rooms, recovery rooms, emergency rooms, preparation or anesthesia inductor rooms, diagnostic or treatment procedures rooms, or on-call staff rooms are excluded from this definition.

"Medical care facility" means any institution, place, building, or agency as defined in § 32.1-102.1 § 32.1-3 of the Code of Virginia.

"Medical service area" means the geographic territory from which at least 75% of patients come or are expected to come to existing or proposed medical care facilities, the delineation of which is based on such factors as population characteristics, natural geographic boundaries, and transportation and trade patterns, and all parts of which are reasonably accessible to existing or proposed medical care facilities.

"Modernization" means the alteration, repair, remodeling, replacement, or renovation of an existing medical care facility or any part thereto, including that which is incident to the initial and subsequent installation of equipment in a medical care facility. See definition of "construction."

"Operating expenditure" means any expenditure by or in behalf of a medical care facility that, under generally accepted accounting principles, is properly chargeable as an expense of operation and maintenance and is not a capital expenditure.

"Operator" means any person having designated responsibility and legal authority from the owner to administer and manage a medical care facility. See definition of "owner."

"Other plans" means any plan(s) which plan that is formally adopted by an official state agency or regional health planning agency and which that provides for the orderly planning and development of medical care facilities and services and which that is not otherwise defined in this chapter.

"Owner" means any person who has legal responsibility and authority to construct, renovate, or equip or otherwise control a medical care facility as defined herein.

"Person" means an individual, corporation, partnership, association, or any other legal entity, whether governmental or private. Such person may also include the following:

1. The applicant for a certificate of public need;

2. The regional health planning agency for the health planning region in which the proposed project is to be located;

3. Any resident of the geographic area served or to be served by the applicant;

4. Any person who regularly uses health care facilities within the geographic area served or to be served by the applicant;

5. Any facility or health maintenance organization (HMO) established under § 38.2-4300 et seq. of the Code of Virginia that is located in the health planning region in which the project is proposed and that provides services similar to the services of the medical care facility project under review;

6. Third party payors who provide health care insurance or prepaid coverage to 5.0% or more patients in the health planning region in which the project is proposed to be located; and

7. Any agency that reviews or establishes rates for health care facilities.

"Physician's office" means a place, owned, or operated by a licensed physician or group of physicians practicing in any legal form whatsoever, which that is designed and equipped solely for the provision of fundamental medical care whether diagnostic, therapeutic, rehabilitative, preventive, or palliative to ambulatory patients and which that does not participate in cost-based or facility reimbursement from third party health insurance programs or prepaid medical service plans excluding pharmaceuticals and other supplies administered in the office. See definition of "medical care facility."

"Planning district" means a contiguous area within the boundaries established by the Department of Housing and Community Development as set forth in § 15.2-4202 of the Code of Virginia, except that for purposes of this chapter, Planning District 23 shall be divided into two planning districts: Planning District 20, consisting of the counties of Isle of Wight and Southampton and the cities Cities of Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk, and Virginia Beach; and Planning District 21, consisting of the counties Counties of James City and York and the cities Cities of Hampton, Newport News, Poquoson, and Williamsburg.

"Predevelopment site work" means any preliminary activity directed towards preparation of the site prior to the completion of the building foundations. This includes, but is not limited to, soil testing, clearing, grading, extension of utilities, and power lines to the site.

"Primary medical care services" means first-contact, whole-person medical and health services delivered by broadly trained, generalist physicians, nurses, and other professionals, intended to include, without limitation, obstetrics/gynecology, family practice, internal medicine, and pediatrics.

"Progress" means actions that are required in a given period of time to complete a project for which a certificate of public need has been issued. See 12VAC5-220-450, Demonstration of progress.

"Project" means any plan or proposal as defined in § 32.1-102.1 of the Code of Virginia that is subject to Certificate of Public Need approval.

"Public hearing" means a proceeding conducted by a regional health planning agency at which an applicant for a certificate of public need and members of the public may present oral or written testimony in support or opposition to the application that is the subject of the proceeding and for which a verbatim record is made. See subsection A of 12VAC5-220-230.

"Regional health plan" means the regional plan adopted by the regional health planning agency board.

"Regional health planning agency" means the regional agency as defined in § 32.1-102.1 of the Code of Virginia.

"Rural" means territory, population, and housing units that are classified as "rural" by the Bureau of the Census of the United States U.S. Department of Commerce, Economics and Statistics Administration.

"Schedule for completion" means the timetable that identifies the major activities required to complete a project as identified by the applicant and set forth on the certificate of public need. The timetable is used by the commissioner to evaluate the applicant's progress in completing an approved project.

"Significant change" means any alteration, modification, or adjustment to a reviewable project for which a certificate of public need has been issued or requested following the public hearing which that:

1. Changes the site;

2. Increases the capital expenditure amount authorized by the commissioner on the certificate of public need issued for the project by 10% or more;

3. Changes the service(s) service proposed to be offered; or

4. Extends the schedule for completion of the project beyond three years (36 months) from the date of certificate issuance or beyond the time period approved by the commissioner at the date of certificate issuance, whichever is greater. See 12VAC5-220-440 and 12VAC5-220-450.

"Standard review process" means the process utilized in the review of all certificate of public need requests with the exception of:

1. Certain bed relocations as specified in 12VAC5-220-280; or

2. Certain projects that involve an increase in the number of beds in which nursing facility or extended care services are provided as specified in 12VAC5-220-325.

"State Medical Facilities Plan" means the planning document as contained in Article 1.1 (§ 32.1-102.1 et seq.) of Chapter 4 of Title 32.1 of the Code of Virginia, used to make medical care facilities and services needs decisions.

12VAC5-220-95. Fee schedule.

A. Unless otherwise provided, fees established by the board in this chapter shall not be refundable.

B. The fee for any application that requests a certificate of public need shall be 1.0% of the proposed expenditure for the project but not less than $1,000 and no more than $60,000.

C. The fee for any application that requests registration of certain capital expenditures under 12VAC5-220-110 shall be $70.

D. The fee for any application that requests registration of the addition of medical equipment and services shall be $70.

E. The fee for any application that requests registration of replacement of existing medical equipment shall be $70.

12VAC5-220-105. Requirements for registration of the replacement of existing medical equipment.

Within 30 days of any person contracting to make, or otherwise legally obligating to make, a capital expenditure for the replacement of medical equipment or otherwise acquiring replacement medical equipment for the provision of services listed in subdivision 7 of the definition of "project" in 12VAC5-220-10, the person shall register in writing such equipment replacement with the commissioner and the appropriate regional health planning agency. Such registration shall be made on forms provided by the department. The registration shall identify the specific unit of equipment to be replaced and the estimated capital cost of the replacement and, shall include documentation that the equipment to be replaced has previously been authorized or exempted as allowed by law, and shall include the fee prescribed by subsection E of 12VAC5-220-95.

12VAC5-220-110. Requirements for registration of certain capital expenditures.

A. At least 30 days before any person contracts to make or is otherwise legally obligated to make a capital expenditure by or on behalf of a medical care facility as defined in this chapter that has not been previously authorized by the commissioner, such expenditure shall be registered in writing with the commissioner. The threshold amount for capital expenditure project registration shall be determined using the formula contained in subsection B of this section.

B. The threshold contained in subsection A of this section shall be adjusted annually using the percentage increase listed in the Consumer Price Index for All Urban Consumers (CPI-U) for the most recent year as follows:

A x (1 + B)

where:

A = the capital expenditure threshold amount for the previous year

and

B = the percent increase for the expense category "Medical Care" listed in the most recent year available of the CPI-U of the U.S. Bureau of Labor Statistics.

C. The format for application requesting registration shall include information concerning the purpose of such expenditure and, the projected impact that the expenditure will have upon the charges for services, and the fee prescribed by subsection C of 12VAC5-220-95. For purposes of registration, the owner shall include any person making the affected capital expenditure. See definition of "project."

D. Annually, the department shall (i) publish the threshold amount in the General Notices section of the Virginia Register of Regulations and (ii) post the threshold amount on its website.

12VAC5-220-180. Application forms.

A. Letter of intent. An applicant shall file a letter of intent with the commissioner to request appropriate application forms, and submit a copy of that letter to the appropriate regional health planning agency, by the later of (i) 30 days prior to the submission of an application for a project included within a particular batch group or (ii) 10 days after the first letter of intent is filed for a project within a particular batch group for the same or similar services and facilities which are proposed for the same planning district or medical service area. The letter shall identify the owner, the type of project for which an application is requested, and the proposed scope (size) and location of the proposed project. The department shall transmit application forms to the applicant within seven days of the receipt of the letter of intent. A letter of intent filed with the department shall be considered void one year after the date of receipt of such letter. (See 12VAC5-220-310 C.)

B. Application fees. The department shall collect application fees for applications that request a certificate of public need. The applicant shall pay the fee required prescribed by subsection B of 12VAC5-220-95 for an any application shall be 1.0% of the proposed expenditure for the project, but not less than $1,000 and no more than $20,000 that requests a certificate of public need.

No application will be deemed to be complete for review until the required application fee is paid. (See 12VAC5-220-310 C.)

C. Filing application forms. Applications must be submitted at least 40 days prior to the first day of a scheduled review cycle to be considered for review in the same cycle. In order to verify the date of the department's and the appropriate regional health planning agency's receipt of the application, the applicant shall transmit the document electronically, or prepare in triplicate two copies to be submitted to the department and one copy to be submitted to the appropriate regional health planning agency and sent by certified mail or a delivery service, return receipt requested, or by hand, with a signed receipt to be provided. No application shall be deemed to have been submitted until required copies have been received by the department and the appropriate regional health planning agency. (See 12VAC5-220-200.)

12VAC5-220-355. RFA project application forms.

A. Letter of intent. A An RFA project applicant shall file a letter of intent with the commissioner to request appropriate application forms, and submit a copy of that letter to the appropriate regional health planning agency by the letter of intent deadline specified in the RFA. The letter shall identify the owner, the type of project for which an application is requested, and the proposed scope (size) and location of the proposed project. The department shall transmit application forms to the applicant within seven days of the receipt of the letter of intent. A letter of intent filed with the department shall be considered void if an application is not filed for the project by the application deadline specified in the RFA.

B. Application fees. The department shall collect application fees for RFA applications that request a certificate of public need. The applicant shall pay the fee required for an application is 1.0% of the proposed capital expenditure for the project but no less than $1,000 and no more than $20,000 prescribed by subsection B of 12VAC5-220-95. No application will be deemed to be complete for review until the required application fee is paid.

C. Filing application forms. Applications must be submitted to the department and the appropriate regional health planning agency by the application filing deadline specified in the RFA. In order to verify the department and the appropriate regional health planning agency's receipt of the application, the applicant shall transmit the document electronically, or prepare in triplicate two copies to be submitted to the department and one copy to be submitted to the appropriate regional health planning agency and sent by certified mail or a delivery service, return receipt requested, or by hand, with a signed receipt to be provided. No application shall be deemed to have been submitted until required copies have been received by the department and the appropriate regional health planning agency.