Report Title:

Health; Certificate of Need

Description:

Exempts certain health care equipment acquisitions, additional beds, and long-term care facilities from requiring a certificate of need.

THE SENATE	S.B. NO.	3220
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO CERTIFICATE OF NEED.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the certificate of need process has proven to be an impediment to the delivery of needed medical services, and costly to medical facilities and hospitals.  Public Law 93-641, relating to the National Health Planning and Resources Development Act of 1974, mandated the enactment of a certificate of need process "to strengthen and coordinate planning for personal health services and facilities development" (Act 159, Session Laws of Hawaii 1975, section 1).  At that time it was believed that the greatest contributor to the costs of medical services was the investment in costly health care resources such as facilities and equipment.  However, the delivery of health care in Hawaii over the years has evolved into the opposite situation: a shortage of health care resources, particularly on the neighbor islands and rural areas.

     Public Law 93-641 was repealed in 1986, and since then fourteen states have eliminated the certificate of need process and twelve states have drastically limited the scope of the requirement for a certificate of need.

     The purpose of this Act is to clarify the applicability of a certificate of need.

     SECTION 2.  Section 323D-2, Hawaii Revised Statutes, is amended by adding four new definitions to be appropriately inserted and to read as follows:

     ""Adult residential care homes" shall have the same meaning as in section 321-15.1.

     "Intermediate care facility" shall have the same meaning as referenced in section 321-11.

"Nursing facility" shall have the same meaning as in section 346E-1.

"Skilled nursing facility" shall have the same meaning as referenced in section 321-11."

     SECTION 3.  Section 323D-54, Hawaii Revised Statutes, is amended to read as follows:

     "§323D-54  Exemptions from certificate of need requirements.  Nothing in this part or rules with respect to the requirement for certificates of need applies to:

     (1)  Offices of physicians, dentists, or other practitioners of the healing arts in private practice as distinguished from organized ambulatory health care facilities[, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any private office or clinic involving a total expenditure in excess of the expenditure minimum];

     (2)  Laboratories, as defined in section 321-11(12)[, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any laboratory involving a total expenditure in excess of the expenditure minimum];

     (3)  Dispensaries and first aid stations located within business or industrial establishments and maintained solely for the use of employees; provided such facilities do not regularly provide inpatient or resident beds for patients or employees on a daily twenty-four-hour basis;

     (4)  Dispensaries or infirmaries in correctional or educational facilities;

     (5)  Dwelling establishments, such as hotels, motels, and rooming or boarding houses that do not regularly provide health care facilities or health care services;

     (6)  Any home or institution conducted only for those who, pursuant to the teachings, faith, or belief of any group, depend for healing upon prayer or other spiritual means;

     (7)  Dental clinics;

     (8)  Nonpatient areas of care facilities such as parking garages and administrative offices;

     (9)  Bed changes that involve [ten per cent or ten beds of existing licensed bed types, whichever is less, of a facility's total existing licensed beds within a two-year period;] an increase in beds;

    (10)  Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, that have already determined that need for the projects exists;

    (11)  Replacement of existing equipment with its modern-day equivalent[;], including the acquisition of new equipment for existing or new services;

    (12)  Primary care clinics under the expenditure thresholds referenced in section 323D-2;

    (13)  Equipment and services related to that equipment, that are primarily invented and used for research purposes as opposed to usual and customary diagnostic and therapeutic care;

    (14)  Capital expenditures that are required:

         (A)  To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations;

         (B)  To comply with state licensure standards;

         (C)  To comply with accreditation standards, compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of such Act;

    (15)  Extended care adult residential care homes [and], adult residential care homes, assisted living facilities[; or], intermediate care facilities, skilled nursing facilities, and nursing facilities;

(16) New hospitals; or

   [(16)] (17)  Other facilities or services that the agency through the statewide council chooses to exempt, by rules pursuant to section 323D-62."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________