Ga. Comp. R. & Regs. R. 111-2-2-.20 - Specific Review Considerations for Short-Stay General Hospital Beds
(1)
Applicability.
(a) A Certificate
of Need will be required prior to the establishment of a new hospital,
replacement of an existing hospital, or expansion of an existing
hospital.
(b) The provisions in
these Rules do not apply to the following situations:
1. bed replacements in existing hospital
facilities; or
2. changing the
physical location of existing beds within an existing facility; or
3. projects that are otherwise exempt from
review pursuant to O.C.G.A. §
31-6-47(a) and
Ga. Comp. R. & Regs. r.
111-2-2-.03.
(c) An existing hospital seeking an expansion
to be used for new institutional health services, including perinatal services,
or rehabilitation services, must meet the applicable service-specific Rules
found in this chapter and, as a threshold matter, meet the need standards set
forth in Ga. Comp. R. & Regs. r.
111-2-2-.20(3)(b)(3)
but shall not be required to meet the other requirements in Ga. Comp. R. &
Regs. r. 111-2-2-.20.
(d) A hospital that has been approved through
the Certificate of Need process to use a certain number of short-stay hospital
beds for long-term acute care ("LTAC") beds shall have such LTAC beds removed
from the official inventory of available short-stay beds once the LTAC is
certified by Medicare; provided, however, that such beds will revert to the
hospital's official inventory of available short-stay beds at any point that
the LTAC ceases operation or is no longer certified by Medicare. An application
to use existing short-stay hospital beds for LTAC beds shall not be subject to
the guidelines in Ga. Comp. R. & Regs. r.
111-2-2-.20.
(2)
Definitions.
(a) "Age cohorts" for purposes of these Rules
refers to the following age groups: persons zero (0) to seventeen (17); persons
eighteen (18) to sixty-four (64); and persons sixty-five (65) and
older.
(b) "Available beds" or "CON
approved beds" means the total number of beds authorized for use by a hospital
or group of hospitals based on capacity approved or authorized through the
Certificate of Need process.
(c)
"Children's hospital" means a hospital in which ninety percent (90%) or more of
the patients served by the hospital are seventeen (17) or less years of
age.
(d) "Critical Access Hospital"
means a hospital designated as a critical access hospital pursuant to the
state's rural health plan and the guidelines of the Medicare Rural Hospital
Flexibility Program authorized by section 4201 of the Balanced Budget Act of
1997.
(e) "Destination cancer
hospital" means an institution with a licensed bed capacity of fifty (50) or
less which provides diagnostic, therapeutic, treatment, and rehabilitative care
services to cancer inpatients and outpatients, by or under the supervision of
physicians, and whose proposed annual patient base is composed of a minimum of
sixty-five percent (65%) of patients who reside outside the State of
Georgia.
(f) "Expansion" means the
addition of available beds or CON approved beds for an existing
hospital.
(g) "Health planning
area" or "planning area" means the twelve (12) state service delivery regions
as defined in O.C.G.A. §
50-4-7.
(h) "Horizon year" means the last year of a
five (5) year projection period for need determinations.
(i) "Optimal Occupancy Rate" means a target
or expected level of use of available beds as calculated based on the annual
patient days divided by the available beds multiplied by three hundred
sixty-five (365). The optimal occupancy rate is variable based on the
following:
1. for hospitals located in a rural
county, sixty-five percent (65%);
2. for hospitals located in a non-rural
county, seventy-five percent (75%); and
3. for teaching or children's hospitals,
seventy percent (70%).
(j) "Patient days" means the number of days
of inpatient services based on the most recent full year of hospital discharge
data or the annual hospital questionnaire.
(k) "Replacement" means new construction to
substitute another facility for an existing facility. New construction may be
considered a replacement only if the replacement site is located three (3)
miles or less from the facility being replaced or, in the case of the facility
proposing a replacement site beyond the three (3) mile limit, if the
replacement site is located within the same county and would serve
substantially the same patient population, based on patient origin by zip code
and payer mix, as the existing facility.
(l) "Rural county" means a county having a
population of less than 50,000 according to the United States decennial census
of 2010 or any future such censes, as defined in O.C.G.A. §
31-7-94.1(c)(2).
(m) "Safety net hospital" is defined as a
hospital that meets at least two (2) of following criteria:
1. the hospital is a children's hospital or a
teaching hospital;
2. the hospital
is designated by the Healthcare Facility Regulation Division as a trauma
center;
3. Medicaid and Peach Care
inpatient admissions constitute twenty percent (20%) or more of the total
hospital inpatient admissions;
4.
Uncompensated charges for indigent patients constitute six percent (6%) or more
of hospital adjusted gross revenue; or
5. Uncompensated charges for indigent and
charity patients constitute ten percent (10%) or more of hospital adjusted
gross revenue.
(n) "Short
stay hospital" or "hospital" is defined as a facility with an average length of
stay of less than thirty (30) days.
(o) "Target service area population" means
the total populations of all counties, which are in part or in whole, within a
ten (10) mile radius of the planned location of a new, expanded, or replacement
hospital.
(p) "Teaching hospital"
means a hospital designated as a teaching hospital by the Georgia Board for
Physician Workforce, which serves as a sponsoring or major participating
hospital for a program of graduate medical education accredited by the
Accreditation Council for Graduate Medical Education (ACGME) or the American
Osteopathic Association (AOA) and maintains a written affiliation agreement
with an accredited medical school located in Georgia or is owned and operated
by an accredited medical school in Georgia.
(3)
Standards.
(a) A new hospital must be at least fifty
(50) beds in size if located in a rural county and at least one hundred (100)
beds in size if located in a county other than a rural county.
(b) The need for a new, replacement or
expanded hospital shall be determined through application of an appropriate
numerical need methodology designed to assess need for the specific purpose
sought in the application.
1. The numerical
need for a new hospital shall be determined through application of a
demand-based forecasting model. The model is outlined in the steps below:
(i) Calculate the use rate for current
hospital services in the target service area population by dividing the
patients days for each age cohort by the population for each age cohort for
same year as patient days were calculated.
(ii) Project the horizon year use rate for
hospital services in the target service area population by multiplying the use
rate for current hospital services by age cohort by the horizon year population
by age cohort.
(iii) Divide the
results of the calculations in Step (ii) by 365 and sum these numbers to
determine a baseline bed need.
(iv)
Adjust the baseline bed need by adding a factor to account for use of the
hospital services located within the target service area population by persons
from out of state. The factor shall be determined by calculating the patient
days for the hospitals in the target service area that may be attributed to
persons from out of state as a percentage of total patient days, and then
dividing that percentage into the baseline bed need. In addition, if the target
service area population includes any county or counties outside the state of
Georgia, the projected bed need of the out-of-state counties should be
calculated by applying the projected rate of beds needed per 1,000 for in-state
counties in the target service area population to the prorated portion of
population in out-of-state counties.
(v) Divide the baseline bed need by the
optimal occupancy rate, as determined by the size of the proposed new facility,
to project the total number of beds needed for the target service area
population.
(vi) Calculate the
number of available beds for the target service area population by adding all
of the short stay beds located in the counties, including those outside of
Georgia if applicable, which are in part or in whole within a ten (10) mile
radius of the planned location of the new hospital.
(vii) Subtract the number of available beds
from the total number of beds needed for the target service area population to
determine the net number of beds needed.
2. A new hospital shall be approved only if
the total target service area population is at least 50,000 persons.
3. The numerical need for a replacement or
expanded hospital shall be determined through application of a demand-based
forecasting model. The model is outlined in the steps below:
(i) Calculate the county use rate for the
current hospital's services by dividing the patients days for Georgia residents
by county within each age cohort by the population by county for each age
cohort for the same year as patient days were calculated.
(ii) Project the horizon year use rate for
the hospital's services by multiplying each county use rate by age cohort by
the horizon year population of each county by age cohort.
(iii) Sum the number of patients resulting
from Step (ii) and divide by three hundred and sixty-five (365) to determine a
baseline bed need rate.
(iv) Adjust
the baseline bed need rate by adding a factor to account for use of the
hospital's services by persons from out of state. The factor shall be
determined by calculating the patient days for the hospital that may be
attributed to persons from out of state as a percentage of total patient days,
and then dividing that number into the baseline bed need.
(v) Divide by optimal occupancy rate, as
determined by the size of the proposed facility, to project the total number of
beds needed for the replacement or expanded hospital.
(vi) Compare the results of Step (v) with the
number of beds requested for the replacement or expanded hospital and, if
appropriate, the number of available beds to determine whether the proposed
replacement or expanded hospital meets the need standards.
(c) The Department may allow an
exception to need and adverse impact standards outlined in Ga. Comp. R. &
Regs. r. 111-2-2-.20(3)(b) and
(d) for a facility meeting any one of the
following criteria:
1. The facility is an
existing facility designated by the Department of Public Health as a trauma
center;
2. The facility is an
existing teaching hospital;
3. The
facility is a sole community provider and more than twenty percent (20%) of the
capital cost of any new, replacement or expanded facility is financed by the
county governing authority, as defined in O.C.G.A. §
1-3-3(7), of the
home county or the county governing authorities of a group of counties;
or
4. The facility is a designated
critical access hospital and is seeking replacement of its existing facility at
a size not to exceed twenty-five (25) CON approved beds; or
5. The facility is an existing short-stay
general hospital meeting one of the following conditions:
(i) A facility in an urban county or rural
county seeking to add short-stay general hospital beds in response to the
closure of a short-stay general hospital located within a five (5) mile
radius;
(ii) A facility in a rural
county seeking to add short-stay general hospital beds in response to the
closure of a short-stay general hospital located in the same rural county or a
contiguous county; or
(iii) A
facility in an urban county seeking to add short-stay general hospital beds in
response to the closure of a short-stay general hospital located in a
contiguous rural county.
To qualify for an exception under Ga. Comp. R. & Regs. r. 111-2-2-.20(3)(c)5, the existing hospital must demonstrate that it will serve substantially the same patient population based on patient origin and payor mix data as the closed hospital, to be determined in the sole discretion of the Department. The expansion under Ga. Comp. R. & Regs. r. 111-2-2-.20(3)(c)5 may be for up to twenty percent (20%) of capacity of the applicant hospital and the application for a certificate of need under this exception shall be filed no more than eighteen (18) months after the closure of the short-stay general hospital. Notwithstanding the foregoing, the exception set forth in Comp. R. & Regs. r. 111-2-2-.20(3)(c)5 may be requested by an applicant only one (1) time in response to the closure of a particular short-stay general hospital unless such applicant provides written justification in support of a second request that is granted by the department in its sole discretion, if such justification was submitted within no more than eighteen (18) months after closure of that hospital.
(d)
1. An applicant for a new, replacement or
expanded hospital shall demonstrate the expected effects of the proposed
services on other hospitals within the target service area population,
including how any enhanced competition will have a positive impact upon the
cost, quality, and access to the services proposed; and in the case of
applications for a new, replacement or expanded hospital where competition
between providers will not have a favorable impact on cost, quality and access,
the applicant shall be required to document that its application will not have
an adverse impact.
2. An applicant
for a new, replacement or expanded hospital shall document in its application
that the new, replacement or expanded facility is not predicted to be
detrimental to safety net hospitals within the planning area. Such
demonstration shall be made by providing an analysis in the application that
compares current and projected changes in market share and payer mix for the
applicant and any safety net hospitals. Impact on an existing safety net
hospital shall be determined to be adverse if, based on the utilization
projected by the applicant, any existing safety net hospital would have a total
decrease of ten percent (10%) or more in its average annual utilization, as
measured by patient days for the two most recent and available preceding
calendar years of data.
3. An
applicant for a new, replacement or expanded hospital shall document in its
application that the new, replacement or expanded facility is not predicted to
be detrimental to any teaching hospitals in the state. Such demonstration shall
be made by providing an analysis in the application that compares current and
projected changes in market share and payer mix for the applicant and any
teaching hospitals. Impact on an existing teaching hospital shall be determined
to be adverse if, based on the utilization projected by the applicant, any
existing teaching hospital would have a total decrease of five percent (5%) or
more in its average annual utilization, as measured by patient days for the two
most recent and available preceding calendar years of data.
(e) In considering applications
joined for review, the Department may give favorable consideration to whichever
of the applicants historically has provided the higher annual percentage of
unreimbursed care to indigent and charity patients and the higher annual
percentage of services to Medicare, Medicaid and Peach Care patients.
(f) An applicant for a new, replacement or
expanded hospital shall foster an environment that assures access to
individuals unable to pay, regardless of payment source or circumstances, by
the following:
1. providing evidence of
written administrative policies that prohibit the exclusion of services to any
patient on the basis of age, race, sex, creed, religion, disability or the
patient's ability to pay;
2.
providing a written commitment that services for indigent and charity patients
will be offered at a standard that meets or exceeds three percent (3%) of
annual, adjusted gross revenues for the hospital;
3. providing a written commitment to
participate in the Medicare, Medicaid and Peach Care programs;
4. providing a written commitment to
participate in any other state health benefits insurance programs for which the
hospital is eligible; and
5.
providing documentation of the past record of performance of the applicant, and
any facility in Georgia owned or operated by the applicant's parent
organization, of providing services to Medicare, Medicaid, and indigent and
charity patients.
(g)
1. An applicant for a replacement or expanded
hospital shall document that the hospital is fully accredited by the Joint
Commission or another nationally recognized accrediting body, and also shall
provide sufficient documentation that the hospital has no history of
significant licensure deficiencies and no history of conditional level Medicare
and/or Medicaid certification deficiencies in the past three (3) years and has
no outstanding licensure and Medicare and/or Medicaid certification
deficiencies. In the event that the hospital is not accredited by the Joint
Commission or another nationally recognized health care accreditation body and
relies solely on state licensure, the applicant should provide sufficient
documentation that the hospital has no history of significant licensure
deficiencies and no history of conditional level Medicare and/or Medicaid
certification deficiencies in the past five (5) years and has no outstanding
licensure and Medicare and/or Medicaid certification deficiencies.
2. An applicant for a new, replacement or
expanded hospital shall:
(i) provide a written
commitment that the applicant presently participates, or in the case of a new
hospital, will participate, in a statewide or national external reporting and
peer review process related to patient safety and control of medical
errors;
(ii) provide evidence of
the availability of resources, including health care providers, management
personnel and funds for capital and operating needs, for the provision of the
hospital services; and
(iii)
document a plan for obtaining and maintaining staff and service quality
standards necessary to promote effective patient care and clinical
outcomes.
(h)
1. An applicant for a new, replacement or
expanded hospital shall document a plan to operate an emergency room licensed
by the Healthcare Facility Regulation Division.
2. An applicant for a new, replacement or
expanded hospital shall provide a description of the proposed service area for
the hospital and document a community planning process that addresses primary
care relationships and the range of transfer and referral activities across the
range of care levels. The descriptions and community planning process should
address:
(i) Estimated geographic boundaries
of primary and secondary service areas and the primary and outpatient providers
in these areas;
(ii) Demographic
and income characteristics of the service area by age, gender and racial
compositions;
(iii) Anticipated
payer sources by population totals and percentages to include public payers and
indigent and charity care services;
(iv) Patient access to the full continuum of
care, including discharge planning and long-term care options;
(v) The projected financial and economic
impact that the project will have on the community;
(vi) Strategies related to physician
recruitment and medical staffing to include the hospital's plan to ensure that
the care provided by physicians and other clinicians is made available to
patients without regard for ability to pay;
(vii) The manner in which the facility
coordinates or will coordinate with the existing health care system;
(viii) The manner(s) in which the hospital
will make available the necessary ancillary and support services; and
(ix) The manner in which the hospital will
support the operation of any affiliated critical access hospitals, if
applicable.
3. An
applicant for a new, replacement or expanded hospital shall demonstrate the
availability of funds for capital and operating needs as well as the immediate
and long-term financial feasibility of the proposal, based upon reasonable
projections of the costs of and charges for providing health services by the
hospital.
4. An applicant for a
new, replacement or expanded hospital shall demonstrate that proposed charges
for services shall compare favorably with charges for other similar hospital
services in the planning area when adjusted for annual inflation. When
determining the accuracy of an applicant's projected charges for hospital
services, the Department may compare the applicant's history of charges if
applicable, with other hospitals in the planning area(s) previously served by
the applicant or its parent company.
(i)
1. To
respond to changes in the health care delivery system and to promote improved
efficiency, access and cost-containment, the Department may authorize the
consolidation of two or more hospitals located in one rural county or in
contiguous rural counties. A proposal to consolidate hospitals into a single,
new consolidated hospital requires a Certificate of Need and must comply with
the following criteria.
2. Two or
more existing facilities, each of which are operational at the time of approval
and each of which are located in the same rural county or in contiguous rural
counties, may seek a consolidation to create a single consolidated facility at
an existing site or a new site within the same rural county or one of the same
rural counties. The applicant or applicants for such a consolidated facility
must be able to meet the following conditions:
(i) The available beds for the proposed
consolidated facility must not exceed the total number of available beds of the
existing facilities proposed for consolidation;
(ii) The applicant(s) for the proposed
consolidated facility must show, using patient origin data, that the proposed
new facility and/or location is reasonably projected to continue to meet the
utilization needs of those populations that historically utilized the existing
facilities;
(iii) The applicant(s)
must explain the impact of consolidation on the service area's health care
delivery system and show that any negative impacts on existing and approved
providers will be outweighed by the benefits of the proposal;
(iv) The applicant must submit documentation
demonstrating that the consolidation will promote the most efficient handling
of patient needs; improve the ability to update medical technology
infrastructure; maximize efficiency for capital and physical plant needs; and
improve consumer access to enhanced quality and depth of services;
and
(v) The applicant(s) must
comply with all other provisions of this Rule with exception of the need and
adverse impact standards set forth in Ga. Comp. R. & Regs. r.
111-2-2-.20(3)(b) and
(d).
(j)
1. To
respond to changes in the health care delivery system and to promote improved
efficiency, access and cost-containment, the Department may authorize the
consolidation of two or more hospitals located in one non-rural county. A
proposal to consolidate hospitals into a single, new consolidated hospital
requires a Certificate of Need and must comply with the following
criteria.
2. Two or more existing
facilities, each of which are operational at the time of approval and each of
which are located in the same non-rural county, may seek a consolidation to
create a single consolidated facility at an existing site or a new site within
the same non-rural county. The consolidating facilities must apply as
co-applicants. The applicant or applicants for such a consolidated facility
must be able to meet the following conditions:
(i) The available beds sought for the
proposed consolidated facility must not exceed the sum of the total number of
beds for which each of the consolidating facilities would be authorized, at the
time the application is filed, pursuant to the demand-based forecasting model
for determining need set forth in Ga. Comp. R. & Regs. r.
111-2-2-.20(3)(b)3.
(ii) The applicant(s) for the
proposed consolidated facility must show, using patient origin data by zip
code, that the proposed new facility and/or location is reasonably projected to
continue to meet the utilization needs of those populations that historically
utilized the existing facilities;
(iii) The applicant(s) must explain the
impact of consolidation on the facilities to be consolidated existing service
area(s) health care delivery system and show that any negative impacts on
existing and approved providers will be outweighed by the benefits of the
proposal;
(iv) The applicant must
submit documentation demonstrating that the consolidation will promote the most
efficient handling of patient needs; improve the ability to update medical
technology infrastructure; maximize efficiency for capital and physical plant
needs; and improve consumer access to enhanced quality and depth of services;
and
(v) The consolidating
facilities must not seek to offer in a consolidation application any new
clinical health service at the proposed new site not offered in each or all of
the facilities to be consolidated.
(k)
1. A
Certificate of Need will be issued to an applicant for a destination cancer
hospital if it meets the following standards and under the following
conditions.
2. An applicant for a
destination cancer hospital must document that it meets the criteria described
in the definition in Section (2)(e).
3. An applicant for a destination cancer
hospital must:
(i) Document that the
destination cancer hospital itself and all affiliated facilities are within
twenty-five (25) miles of a commercial airport in the State of Georgia with
five (5) or more runways;
(ii)
Document that the services to be offered by the facility are solely related to
the treatment of cancer patients;
(iii) Document the services to be offered
within and by the facility that would otherwise be considered a separate new
institutional health service. Such services will not be required to obtain
separate Certificate of Need authorization, or be reviewed under any
service-specific need methodology or rules other than those for a destination
cancer hospital if included in the initial Certificate of Need application
reviewed under the Rules outlined in section (k) of these Rules;
(iv) Document that the destination cancer
hospital will not offer services that are not reasonable related to the
diagnosis and treatment of cancer such as, but not limited to, open heart
surgery, perinatal services, and cardiac catheterization;
(v) Document that at least sixty-five percent
(65%) of its projected annual patient base will be composed of persons who
reside outside of the State of Georgia;
(vi) Agree to provide uncompensated indigent
and charity care for residents of the State of Georgia which meets or exceeds
three percent (3%) of the applicant's adjusted gross revenue;
(vii) Agree to provide care to Medicaid
beneficiaries;
(viii) Document that
the applicant for a destination cancer hospital will comply with the criteria
found in the General Review Considerations of these Ga. Comp. R. & Regs. r.
at Section
111-2-2-.09(2).
4. A destination cancer hospital
that does not meet an annual patient base composed of a minimum of sixty-five
percent (65%) of patients who reside outside the State of Georgia in a calendar
year shall be fined $2,000,000.00 for the first year of noncompliance,
$4,000,000.00 for the second consecutive year of noncompliance, and
$6,000,000.00 for the third consecutive year of noncompliance. Such fine amount
shall reset to $2,000,000.00 after any year of compliance. In the event that a
destination cancer hospital does not meet an annual patient base composed of a
minimum of sixty-five percent (65%) of patients who reside outside of the State
of Georgia for three (3) calendar years in a five (5) year period, such
hospital shall be fined an additional amount of $8,000,000.00. All revenues
collected from any such fine may be dedicated and deposited by the Department
into the Indigent Care Trust Fund created pursuant to O.C.G.A. §
31-8-152. The Department, pursuant
to O.C.G.A. §
31-6-45(a)(7),
may revoke the Certificate of Need of a destination cancer hospital, in whole,
or in part, after notice and an opportunity for a hearing, for failure to meet
an annual patient base composed of a minimum of sixty-five percent (65%) of
patients who reside outside of the State of Georgia for three calendar years in
any five-year period.
5. After
commencing operations upon receipt of a Certificate of Need pursuant to these
Rules, a destination cancer hospital seeking to add an additional new
institutional health service, shall apply for and obtain an additional
Certificate of Need under the applicable statutory provisions and the Rules in
this section. Any such application shall only be granted if the patient base of
the destination cancer hospital is composed of at least sixty-five percent
(65%) of patients who reside outside of the State of Georgia for two
consecutive years.
6. The
Department may apply the Rules in section (k) of these Rules to an application
from a destination cancer hospital for a Certificate of Need for services and
equipment required for it to meet federal or state laws applicable to a
hospital.
7. If a destination
cancer hospital cannot show a patient base of a minimum of sixty-five percent
(65%) of persons who reside outside of the State of Georgia, the application
for a Certificate of Need for any new institutional health service shall be
evaluated under the specific statutes and Rules applicable to that particular
service.
8. If a destination cancer
hospital applies for a Certificate of Need to add an additional new
institutional health service before commencing operations or completing two (2)
consecutive years of operation, the applicant may rely on historical data from
its affiliated entities.
9. The
number of beds, services, and equipment used in and by a destination cancer
hospital shall not be counted as part of the Department's inventory when
determining the need for those beds, services, or equipment for other providers
in other Certificate of Need applications not involving destination cancer
hospitals.
10. No person shall be
issued more than one Certificate of Need for a destination cancer
hospital.
11. The Department will
not accept an application for a Certificate of Need for a destination cancer
hospital on or after January 1, 2010; however, an existing destination cancer
hospital may avail itself of all applicable Certificate of Need provisions
regarding the upgrade, purchase, or replacement of diagnostic or therapeutic
equipment.
12. An applicant for a
destination cancer hospital shall agree to provide information related to the
operation of and services provided by the facility in the time frame and manner
requested by the Department. In addition, a destination cancer hospital shall
submit an annual statement, in accordance with the timeframes and format
specified by the Department, affirming that the hospital has met an annual
patient based composed of a minimum of sixty-five percent (65%) of patients who
reside outside the State of Georgia. The chief executive officer of the
destination cancer hospital shall certify under penalty of perjury that the
statement as prepared accurately reflects the composition of the annual patient
base. The Department shall have the authority to inspect any books, records,
papers, or other information of the destination cancer hospital to confirm the
information provided on such statement or any other information required of the
destination cancer hospital. The report required by this sub-section shall not
be construed to require the release of any information that would violate the
Health Insurance Portability and Accountability Act of 1996,
P.L.
104-191 .
Notes
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