Certificate of Need Reform

PUBLIC CHAPTER 557

What would be regulated by CON under Public Chapter 557?

Initiation, modification, or substantial relocation of:

▪ Hospitals

▪ Nursing Homes

▪ Recuperation Centers

▪ Ambulatory Surgical Treatment Centers (ASTCs)

▪ Mental Health Hospitals

▪ Intellectual Disability Institutional Habilitation Facilities

▪ Home Care Organizations (Home Health and Hospice)

▪ Outpatient Diagnostic Centers (ODCs)

▪ Rehabilitation Facilities

▪ Residential Hospice

▪ Nonresidential Substitution-based Treatment Centers for Opiate Addiction

▪ Burn Units

▪ Neonatal Intensive Care Units

▪ Open Heart Surgery Services

▪ Positron Emission Tomography Services in counties with a population of 175,000 or less

▪ Organ Transplantation Services

▪ Pediatric (14 years or younger) Magnetic Resonance Imaging Services

▪ Magnetic Resonance Imaging Services in counties with populations of 250,000 175,000 or less

▪ Cardiac Catheterization Services

▪ Linear Accelerator Services

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Other CON Exemptions under Public Chapter 557

▪ Elimination of all CON regulation in economically distressed counties without a hospital:▪ Currently Lake, Clay, and Grundy▪ Distressed county list is determined by the TN Department of Economic and Community

Development and is updated annually

▪ Hospitals may add acute or rehabilitation beds if they are already licensed for that category of beds

▪ St. Jude Children’s Research Hospital can provide hospice services to its patients

▪ Home health agencies that are limited to serving the following patients:▪ Pediatric patients (17 or younger)▪ Patients who are part of the Energy Employees Occupational Illness Compensation

Program Act of 2000

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Other CON Exemptions under Public Chapter 557 (cont.)

▪ Nursing Homes may now increase their beds by up to 10% once every three years

▪ Hospitals in rural counties that have closed within the past 15 years may be reopened without having to obtain a CON prior to licensing (but the must obtain a CON within 12 months of licensure)

▪ CON-holders who wish to relocate a short distance that will not result in an underserved population may request administrative approval of the relocation without obtaining a CON▪ Administrative approval could require providing notice to public and is reviewable by

agency members▪ Home Health Agencies may now relocate their primary office to another county within

their licensed service area without obtaining a CON

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Changes to Standards and Criteria under PC 557

1. Needa) Population to be servedb) Minimum utilization levels

2. Economic Feasibilitya) Adequacy of funds to complete the projectb) Sustainable revenue projections

3. Contribution to the Orderly Development of Health Care Consumer Advantage

a) Impact on existing patientsb) Impact on existing providers

4. Appropriate Quality Standardsa) Accreditation by respected organization

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Other Changes to the CON Process under PC 557

▪ “Use it or lose it” provision would require HSDA to void fully-implemented CONs when the activities authorized have not been provided for 12 consecutive months

▪ Agency would be able to waive this if good cause is shown in advance of the 12-month period

▪ Opposition to CON applications are restricted to providers within a 35-mile radius of the proposed project

▪ Opposing institutions must provide advance notice to HSDA and applicant of the grounds on which the application is being opposed

▪ Attorney’s fees may now be assessed against the loser of an appealed CON decision

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Reducing application fees

$5.75/$1,000 min $15,000 max $95,000

$2.25/$1,000 min $3,000

max $45,0007

Application Fees:

Establish new revenue stream:

A. Take licensure fees currently dedicated to the Health Planning Division

B. Increase those fees to a level that could support the majority of the Agency’s expenses

Current Application Process

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Application Process Under PC 557

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Application Process Under PC 557

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Applications filed on the1st business day of themonth following thedate of the publication

Application is reviewed

Application is completeor rolls to next month

If applicable, a SimultaneousReviewLOI is submitted

Letter ofIntent is submitted to HSDA Office

continued

1st Month1st-15th days

1st Month16th-last day of month

2nd Month

2nd Month Days 1-15

2nd Month Day 15

Those seeking simultaneous review must publish during this time frame(16th-last day of month)

Simultaneously Reviewed application is also filed

If needed, supplemental Information is requested

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Continued

Applications will be heard at the next scheduled Agency meeting after the 30 day review cycle

Applications are considered void If incomplete after 60 days from the date of the first supplemental request

Application Enters a 30-day Review Cycle2nd Month

Day 15

Information is verified. Licensing Agencies may comment

Agency Meeting

60 Days

Application Process Under PC 557 (cont.)

Consolidation of Functions into HSDA

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Agency Responsibilities:

Health Services and Development

Agency

Administration of Certificate of Need

Program

Development of Standards and

CriteriaApplication Review

Health Care “Needs Assessment”

Research

Developing plan to merge with Board

for Licensing Health Care Facilities

Annual Report on Charity Care Proposed by Applicants

Implementation

▪ June Meeting:▪ ED will make presentation on legislation to public

▪ August Meeting:▪ Promulgation of emergency rules▪ Subsequent rules will be promulgated using the regular rulemaking process, and will

possibly require additional meetings solely for that purpose

▪ Procedural changes will take effect on October 1, at which time the board will begin to meet monthly instead of every other month.

▪ HSDA staff will be holding regular meetings with stakeholders on changes and posting updates on website

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Thank you!