ON MAY 4, 2021, THE HOUSE ADOPTED AMENDMENTS #1, #2, AND #3 AND PASSED HOUSE BILL 948, AS AMENDED.
AMENDMENT #1 rewrites this bill and revises various provisions of the Tennessee Health Services and Planning Act, which governs the certificate of need program for healthcare facilities, equipment, and services. The revisions include the following:
(1) Present law requires the health services and development agency to prescribe fees by rule in an amount that provides for the cost of administering the implementation and enforcement of the Act. All fees and civil penalties authorized by the Act, with the exception of fees established pursuant to TCA 68-11-1625, are paid to the state treasurer and deposited in the state general fund and credited to a separate account for the agency. TCA 68-11-1625 creates a separate account for the state health planning division of the department of finance and administration and provides for the collection of an annual fee from healthcare providers to be used for other services required to fulfill the duties of the state health planning division of the department of finance and administration. TCA 68-11-1625 contains a schedule of this annual fee for the division, with fees ranging from $50.00 to $300 per license, depending on the type of license, such as a residential hospice or hospital.
This amendment transfers the state health planning division, which is responsible for creating a state health plan, from the department of finance and administration to the department of health. This amendment also revises the above-described fee provisions of 68-11-1625 so that the annual fee will be treated as all other fees under the Act and credited to the agency's account; and this amendment increases the fees, as follows: nursing homes, from $100 to $500 for 1-50 beds, $1,500 for 51-100 beds, and $2,500 for 101 or more beds; hospitals, from $100, $200, or $300 depending on the number of beds, to $2,000, $3,500, or $5,000, respectively; ambulatory surgical treatment centers, from $100 to $2,000; outpatient diagnostic centers, from $100 to $2,000; home care organizations authorized to provide home health services or hospice services, from $100 to $500; and nonresidential substitution-based treatment centers for opiate addiction, from $75.00 to $500. The fees is not increased for a residential hospice, birthing center, mental health residential treatment facility, or intellectual disability institutional habilitation facility. The agency will prescribe fees by rule, in addition to the above-referenced fees, that must be in an amount to provide for the cost of administering the implementation and enforcement of the Act.
(2) This amendment removes mental health hospitals and recuperation centers from the Act and exempts the following from the certificate of need requirements of the Act:
(A) The operation by a hospital of a nonresidential substitution-based treatment center for opiate addiction, if the treatment center is located on the same campus as the operating hospital and the hospital is licensed until the health or mental health laws;
(B) Any actions in a county that, as of January 1, 2021, is designated as an economically distressed eligible county and has no actively licensed hospital. This amendment requires a person providing positron emission tomography services or MRI services under this exemption to be accredited by specified agencies in the modalities provided by that person and submit proof of the accreditation to the agency within two years of the initiation of service. Failure to comply with this requirement will subject the person to licensure sanction;
(C) Establishment of a home health agency limited to providing home care services under the federal Energy Employees Occupational Illness Compensation Program Act of 2000 (EEOICPA). Any license issued by the department of health for services under the EEOICPA must be limited to the provision of only those services. An agency providing services under this exemption must be accredited by specified organizations and submit proof of the accreditation to the agency within two years of the initiation of service. Failure to comply with this requirement will subject the person to licensure sanction;
(D) Establishment of a home health agency limited to providing home care services to patients less than 18 years of age. Any license issued by the department of health for the provision of home care services to patients under 18 years of age must be limited to the provision of only those services. This amendment sets out circumstances under which continuing care may be provided until a patient reaches 21 years of age. An agency providing services under this exemption must be accredited by specified agencies and submit proof of the accreditation to the agency within two years of the initiation of service. Failure to comply with this requirement will subject the person to licensure sanction;
(E) Licensure by the department of health of an existing hospital licensed by the department of mental health and substance abuse services as a satellite of an affiliated general acute care hospital;
(F) Initiation, in Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby counties, of: MRI services, or increasing the number of MRI machines used, as long as MRI services are not provided to a patient who is 14 years of age or younger on more than five occasions per year; or positron emission tomography. This amendment requires a provider of positron emission tomography under this exemption to be accredited by the American College of Radiology and provide proof of accreditation within two years of the date of licensure. Failure to comply will make the provider subject to licensure sanction; and
(G) Establishment of a home care organization or residential hospice limited to providing hospice services to patients under the care of a healthcare research institution. A license issued by the department pursuant to this exception must be limited to the provision of services only to the patients of the healthcare research institution or the patients of a hospital or clinic that has its principal place of business located in this state and that is affiliated with the healthcare research institution. The home care organization or residential hospice that provides hospice services without a certificate of need pursuant to this provision must, within 12 months of licensure, be accredited by one of the appropriate, specified agencies in order to continue to qualify for the exception.
Under present law, a certificate of need is required for initiation of positron emission tomography. A certificate is also required for initiation of MRIs as follows: in Rutherford, Hamilton, Knox, Davidson, and Shelby counties only for providing MRIs to pediatric patients; and in all other counties for providing MRIs to any patients. This amendment clarifies these provisions to account for the inclusion of Williamson County in the exemption for non-pediatric MRIs and to account for the exemption created by this amendment for positron emission tomography as described above. Also, under present law, a certificate of need is required in order to establish a satellite emergency department facility by a hospital at a location other than the hospital's main campus. This amendment extends this provision to also apply to establishing a satellite inpatient facility.
(3) Under present law, a certificate of need is valid for a period not to exceed three years for hospital projects, and two years for all other projects, from the date of its issuance and expires after such time. This amendment clarifies that activity authorized by a certificate of need must be completed within a period not to exceed three years for hospital and nursing home projects, and two years for all other projects, from the date of issuance and after such time the certificate of need authorization expires. Present law provides for an extension in certain circumstances, but requires demonstration of substantial progress for such an extension. This amendment removes the substantial progress requirement.
(4) This amendment adds that a certificate of need and activity the certificate authorizes becomes void if the actions it authorizes have not been performed for a continuous period of one year after it has been implemented. With respect to a home care organization, these provisions apply to each county for which the organization is licensed. This amendment authorizes the agency to issue a temporary exemption to this item (4) upon finding that sufficient cause for the temporary cessation of the activity has been presented to the agency along with a plan to resume the activity in the future. Under this amendment, the agency will prescribe any procedures for issuing temporary exemptions by rule. This item (4) will not apply to the establishment of a healthcare institution or a healthcare institution's number of licensed beds if the healthcare institution has an active or inactive license. This amendment prohibits the department of health and the department of mental health and substance abuse services from issuing or renewing licenses for any activity for which a certificate of need has become void.
(5) Present law requires that each decision rendered by the agency include written documentation and explanation of the factual and legal basis upon which the agency grants or denies the certificate of need. Additionally, if an applicant's application is denied by the agency, then the applicant receives, on request, a refund equal to 25 percent of the examination fee for its application. This amendment removes the refund. This amendment also revises the provision regarding the written explanation for each decision of the agency to instead specify that if an applicant's application is denied by the agency, then written documentation and explanation of the factual and legal basis upon which the agency denied the certificate of need must be provided to the applicant.
(6) Present law requires a healthcare institution wishing to oppose a certificate of need application to file a written objection with the agency and serve a copy on the applicant before the agency meeting at which the application was scheduled to be heard. This amendment rewrites and expands the opposition procedure to include details about proximity of the healthcare institution to the applicant and authorizing individuals acting as private citizens to voice opposition to an application.
(7) Under present law, the agency has the duty to promulgate rules relating to emergency applications for certificates of need. This amendment creates a detailed emergency review and issuance policy. Under this amendment, where an unforeseen event necessitates action of a type requiring a certificate of need and the public health, safety, or welfare would be unavoidably jeopardized by compliance with the standard procedures for application and granting of a certificate of need, the agency may issue an emergency certificate of need. An emergency certificate will be valid for a period not to exceed 120 days. However, if the applicant has applied for a certificate of need under standard agency procedures, an extension of the emergency certificate of need may be granted.
(8) (A) Present law authorizes a hospital, rehabilitation facility, or mental health hospital to increase its total number of licensed beds in any bed category by 10 percent or less of its licensed capacity at any one campus over any period of one year for any services or purposes it is licensed to perform without obtaining a certificate of need. This increase is authorized no more frequently than once every three years. Additionally, for new hospitals, rehabilitation facilities, or mental health hospitals, the 10 percent increase cannot be requested until one year after the date all of the new beds were initially licensed. This amendment deletes this provision for an increase in beds without a certificate of need for hospitals, rehabilitation facilities, and mental health hospitals.
(B) Present law authorizes a nursing home to increase its total number of licensed beds by the lesser of 10 beds or 10 percent of its licensed capacity over any period of one year without obtaining a certificate of need. This amendment revises the frequency with which such action may occur to be "no more frequently than one time every three years." Under present law, this nursing home bed increase provision is suspended during the time period established under present law whereby no certificates of need are issued for new nursing home beds, including the conversion of hospital beds to nursing home beds or swing beds, other 125 beds per fiscal year, to be certified as medicare skilled nursing facility (SNF) beds. The applicable time period under present law is July 1, 2016, until June 30, 2021. This amendment: removes the statement that the 10 bed/10 percent bed increase provision is suspended during the referenced time period; and changes the applicable time period to be July 1, 2020, until June 30, 2025.
(9) Present law also contains a detailed analysis for issuance of certificates of need for new nursing home beds regardless of site, including conversion of any beds to licensed nursing home beds. Criteria include need for the project based on population and long-term economic feasibility. This amendment deletes this analysis and formula for certificates for new nursing home beds. This amendment retains provisions governing an increase of a limited number of nursing home beds without obtaining a certificate of need.
(10) Under present law, the executive director of the health services and development agency must, among other duties carry out all policies, rules, and regulations that are adopted by the agency and supervise the expenditure of funds. This amendment expands the executive director's duties to include, among other things:
(A) Administering the development of criteria and standards to guide the agency when issuing certificates of need;
(B) Issuing exemptions from the requirement that a certificate of need be obtained for the relocation of existing or certified facilities providing health care services and health care institutions;
(C) Submitting an annual report to the chairs of the senate health and welfare committee and house health committee that includes a comparison of the actual payer mix and uncompensated care provided by certificate of need holders with the projections the holders submitted in the holder's certificate of need application; and
(D) Submitting to above-referenced committee chairs a plan to consolidate into a health facilities commission the powers and duties of the agency with those of the board for licensing healthcare facilities.
(11) This amendment requires the agency to develop criteria and standards to guide the agency when issuing certificates of need and requires that those criteria and standards: be based on input the agency received during development of the criteria and standards from the division of TennCare, the departments of health, mental health and substance abuse services, and intellectual and developmental disabilities, the senate health and welfare committee, and the house health committee; be evaluated and updated not less than once every five years; and be developed by rule in accordance with the UAPA. This amendment authorizes the agency to contract for the development of criteria and standards.
(12) This amendment rewrites the present law provisions whereby a certificate of need is required for a change in the bed complement that redistributes beds from acute to long-term care categories or redistributes beds from any category to acute, rehabilitation, child and adolescent psychiatric, or adult psychiatric. This amendment instead provides that a certificate of need will be required for a change in the bed complement that redistributes beds from any category to acute, rehabilitation, or long-term care, if at the time of redistribution the healthcare institution does not have beds licensed for the category to which the beds will be redistributed.
(13) This amendment removes the reference to "or the replacement" in the present law provision whereby a certificate of need is required for a change in the location of or the replacement of existing or certified facilities providing health care services and health care institutions; and removes the requirement for a certificate of need for "a change in the location of or the replacement of medical equipment that requires a certificate of need" in the same provision. Also, this amendment adds that the executive director may issue an exemption for the relocation of existing healthcare institutions and approved services if at least 75 percent of patients to be served are reasonably expected to reside in the same zip codes as the existing patient population and the relocation will not reduce access to consumers, particularly those in underserved communities; those who are uninsured or underinsured; women and racial and ethnic minorities; TennCare or medicaid recipients; and law-income groups. This amendment sets out other requirements in regard to such a waiver.
(14) This amendment deletes various present law provisions dealing specifically with the relocation of certain nursing home beds.
(15) This amendment adds an annual reporting requirement for persons who perform cardiac catheterization, open heart surgery, organ transplantation, operation of a burn unit, operation of a neonatal ICU, home health services, or hospice services. Each person required to submit an annual report to the agency must submit the report for the period coinciding with the state fiscal year ending June 30, 2021, on or before September 30, 2021. Subsequent fiscal years' reports must be submitted to the agency no later than 30 days following the end of the fiscal year. Under this amendment, the agency may impose a civil penalty not to exceed $50.00 per day for each day the annual report is late.
(16) This amendment requires the agency to conduct studies related to health care, including a needs assessment that must be updated at least annually. This amendment also adds to the duties of the agency the duty to issue exemptions from the voiding of a certificate of need due to inactivity, as described above in item (4). This amendment removes the present law requirement for the agency to review the state health plan.
(17) Present law authorizes the agency to delegate to the executive director the duty to, among other things grant approval, denial, or deferral of application for certificates of need. This amendment limits this delegation provision to only granting deferrals. This amendment requires the executive director to notify the agency within two days of taking action under a delegation of authority. This amendment revises the provisions governing the agency's review of an action by the executive director.
(18) Present specifies that the relocation of the principal office of a home health agency or hospice within the same county does not require a certificate of need. This amendment revises this provision to apply to a relocation within the entity's "licensed service area" instead of within "the same county."
(19) This amendment revises various provisions governing the review process for applications, including the date by which letters of intent must be filed, and governing the independent review process. Present law requires