Title of Regulation: 12VAC5-220. Virginia Medical Care Facilities Certificate of Public Need Rules and Regulations (amending 12VAC5-220-90, 12VAC5-220-105, 12VAC5-220-160, 12VAC5-220-180, 12VAC5-220-210, 12VAC5-220-280, 12VAC5-220-335, 12VAC5-220-345, 12VAC5-220-355, 12VAC5-220-375).

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

Effective Date: November 1, 2009.

Agency Contact: Carrie Eddie, Policy Analyst, Department of Health, 3600 West Broad Street, Richmond, VA 23230, telephone (804) 367-2157, or email carrie.eddy@vdh.virginia.gov.

Summary:

The amendments conform the regulations to Chapter 175 of the 2009 Acts of Assembly, which comprehensively amended Article 1.1 (§ 32.1-102.1 et seq.) of Chapter 4 of Title 32.1 of the Code of Virginia related to the Certificate of Public Need (COPN) program. The amendments (i) replace the 21 considerations used in making a determination of need with eight modified and abbreviated considerations; (ii) add beds for psychiatric or substance abuse treatment services and the establishment of new psychiatric or substance abuse treatment services to the Request for Applications (RFA) process currently used for distributing nursing facility beds; (iii) extend the expedited review process to certain capital expenditure projects; and (iv) modify the requirements of the annual report. In addition, a technical correction to 12VAC5-220-105 corrects a misquoted statutory citation.

12VAC5-220-90. Annual report.

The Pursuant to § 32.1-102.12 of the Code of Virginia, the commissioner shall annually report to the Governor and the General Assembly on the status of Virginia's certificate of public need program. The report shall be issued by October 1 of each year and shall include, but need not be limited to:

1. A summary of the commissioner's actions during the previous fiscal year pursuant to Virginia's certificate of public need law;

2. A five-year schedule for analysis of all project categories, which provides for the analysis of at least three project categories per year;

3. An analysis of the appropriateness of continuing the certificate of public need program for at least three project categories in accordance with the five-year schedule for analysis of all project categories;

4. An analysis of the effectiveness of the application review procedures used by the regional health planning agencies and the department required by § 32.1-102.6 of the Code of Virginia that details the review time required during the past year for various project categories, the number of contested or opposed applications and the project categories of these contested or opposed projects, the number of applications upon which the regional health planning agencies have failed to act in accordance with the timelines of § 32.1-102.6 B, and the number of deemed approvals from the department because of their failure to comply with the timelines required by § 32.1-102.6 E, and any other data determined by the commissioner to be relevant to the efficient operation of the program;

5. An analysis of health care market reform in the Commonwealth and the extent, if any, to which such reform obviates the need for the certificate of public need program;

6. An analysis of the accessibility by the indigent to care provided by medical care facilities regulated pursuant to Virginia's certificate of public need law;

7. An analysis of the relevance of Virginia's certificate of public need law to the quality of care provided by medical care facilities regulated pursuant to this law; and

8. An analysis of equipment registrations required pursuant to § 32.1-102.1:1, including type of equipment, whether an addition or replacement, and the equipment costs.

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 through issuance of a certificate of public need, registered pursuant to former § 32.1-102.3:4 of the Code of Virginia or exempted pursuant to § 32.1-102.11 of the Code of Virginia as allowed by law.

Part IV
Determination of Public Need (Required Considerations)

12VAC5-220-160. Required considerations.

In determining whether a public need exists for a proposed project, the following factors shall be taken into account when applicable: the applicable requirements of § 32.1-102.2:1 of the Code of Virginia will be considered.

1. The recommendation and the reasons therefor of the appropriate regional health planning agency.

2. The relationship of the project to the applicable health plans of the regional health planning agency and the Board of Health.

3. The relationship of the project to the long-range development plan, if any, of the person applying for a certificate.

4. The need that the population served or to be served by the project has for the project, including, but not limited to, the needs of rural populations in areas having distinct and unique geographic, socioeconomic, cultural, transportation, and other barriers to access to care.

5. The extent to which the project will be accessible to all residents of the area proposed to be served and the effects on accessibility of any proposed relocation of an existing service or facility.

6. The area, population, topography, highway facilities and availability of the services to be provided by the project in the particular part of the health planning region in which the project is proposed, in particular, the distinct and unique geographic, socioeconomic, cultural, transportation, and other barriers to access to care.

7. Less costly or more effective alternate methods of reasonably meeting identified health service needs.

8. The immediate and long-term financial feasibility of the project.

9. The relationship of the project to the existing health care system of the area in which the project is proposed; however, for projects proposed in rural areas, the relationship of the project to the existing health care services in the specific rural locality shall be considered.

10. The availability of resources for the project.

11. The organizational relationship of the project to necessary ancillary and support services.

12. The relationship of the project to the clinical needs of health professional training programs in the area in which the project is proposed.

13. The special needs and circumstances of an applicant for a certificate, such as a medical school, hospital, multidisciplinary clinic, specialty center or regional health service provider, if a substantial portion of the applicant's services or resources or both is provided to individuals not residing in the health planning region in which the project is to be located.

14. The need and the availability in the health planning region for osteopathic and allopathic services and facilities and the impact on existing and proposed institutional training programs for doctors of osteopathy and medicine at the student, internship, and residency training levels.

15. The special needs and circumstances of health maintenance organizations. When considering the special needs and circumstances of health maintenance organizations, the commissioner may grant a certificate for a project if the commissioner finds that the project is needed by the enrolled or reasonably anticipated new members of the health maintenance organizations or the beds or services to be provided are not available from providers which are not health maintenance organizations or from other health maintenance organizations in a reasonable and cost effective manner.

16. The special needs and circumstances for biomedical and behavioral research projects which are designed to meet a national need and for which local conditions offer special advantages.

17. The costs and benefits of the construction associated with the proposed project.

18. The probable impact of the project on the costs of and charges for providing health services by the applicant for a certificate and on the costs and charges to the public for providing health services by other persons in the area.

19. Improvements or innovations in the financing and delivery of health services which foster competition and serve to promote quality assurance and cost effectiveness.

20. In the case of health services or facilities proposed to be provided, the efficiency and appropriateness of the use of existing services and facilities in the area similar to those proposed, including, in the case of rural localities, any distinct and unique geographic, socioeconomic, cultural, transportation, and other barriers to access to care.

21. In the case of proposed health services or facilities, the extent to which a proposed service or facility will increase citizen accessibility, demonstrate documented community support, and introduce institutional competition into a health planning region.

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 fee required for an application shall be 1.0% of the proposed expenditure for the project, but not less than $1,000 and no more than $20,000.

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. All applications including the required data and information shall be prepared in triplicate; two copies to be submitted to the department; one copy to be submitted to the appropriate regional health planning agency. 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 shall deliver the document 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.)

12VAC5-220-210. Requests for application (RFA).

The commissioner may request the submission of applications for his consideration which address a specific need for services and facilities as identified in the State Medical Facilities Plan. The department shall give notice of such RFA in a newspaper of general circulation in the locality or the planning district where the specific services or facility is requested. Such notice shall be published at least 120 days prior to the first day of the appropriate review cycle for the type of project being requested. A written copy of an RFA shall also be available upon request from the department and the regional health planning agency in the appropriate geographic area. The process for adoption of an RFA by the commissioner for projects other than nursing home bed projects (see 12VAC5-220-325) shall be set forth in the State Medical Facilities Plan listed in § 32.1-102.3:2 A, B, and C of the Code of Virginia are set forth in 12VAC5-220-335.

Part VI
Expedited Review Process

12VAC5-220-280. Applicability.

Projects of medical care facilities Capital expenditures as contained in subdivision 8 of "project" as defined in § 32.1-102.1 of the Code of Virginia or projects that involve relocation at the same site of 10 beds or 10% of the beds, whichever is less, from one existing physical facility to another, when the cost of such relocation is less than $5 million, shall be subject to an expedited review process.

12VAC5-220-335. Request for Applications (RFA).

A. Frequency. The Pursuant to § 32.1-102.3:2 A, B, and C of the Code of Virginia, the commissioner shall periodically issue, in consultation and cooperation with the Department of Medical Assistance Services, a Request for Applications (RFA) from project applicants proposing projects which would result in an increase in the number of beds in which nursing facility or extended care services are provided. An RFA shall be issued at least annually. (See 12VAC5-220-325)

B. Issuance. At least 60 days prior to the issuance of a RFA, the board shall publish the proposed RFA in the Virginia Register for public comment together with an explanation of (i) the regulatory basis for the planning district bed needs set forth in the proposed RFA and (ii) the rationale for the RFA's planning district designations. Any person objecting to the contents of the proposed RFA may notify, within 14 days of the publication, the board and the commissioner of his objection and the objection's regulatory basis. The commissioner shall prepare, and deliver by registered mail, a written response to each such objection within two weeks of the date of receiving the objection. The objector may file a rebuttal to the commissioner's response in writing within five days of receiving the commissioner's response. If objections are received, the board shall, after considering the provisions of the RFA, any objections, the commissioner's responses, and if filed, any written rebuttals of the commissioner's responses, hold a public hearing to receive comments on the specific RFA. Prior to making a decision on the RFA, the commissioner shall consider any recommendations made by the board.

C. Content. A RFA from project applicants proposing projects which would result in an increase in the number of beds in which nursing facility or extended care services are provided shall be based on analyses of the need for increases in the nursing home bed supply in each of Virginia's planning districts in accordance with the applicable standards included in the State Medical Facilities Plan. Such RFAs shall also include a schedule for the review of applications submitted in response to the RFA which allows for at least 120 days between the day on which the RFA is issued and the first day of the review cycle for such applications.

12VAC5-220-345. Limitation on acceptance of nursing home bed RFA applications.

Applications for projects which would result in an increase in the number of beds in which nursing facility or extended care services are provided (see 12VAC5-22-325) listed in § 32.1-102.3:2 A, B, and C of the Code of Virginia shall only be accepted for review when properly filed in response to a RFA. Furthermore, the commissioner shall only accept for review applications which propose projects located in the planning districts from which applications are requested in the RFA and propose authorization of a number of new beds in which nursing facility or extended care services are provided which is less than or equal to the total number of beds identified as needed for the planning district in which the project will be located.

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

A. Letter of intent. A nursing home bed 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 nursing home bed certificate of public need. 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. 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. All applications including the required data and information shall be prepared in triplicate; two copies to be submitted to the department; and one copy to be submitted to the appropriate regional health planning agency. 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 shall deliver the document by hand, with the 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.

12VAC5-220-375. Consideration of RFA applications.

Nursing home bed RFA applications proposed for the same planning district shall be considered as competing applications by the commissioner. The commissioner shall determine whether an application is competing and provide written notification to the competing applicants and the regional health planning agency.