Bill Summary – FastDemocracy

ON APRIL 16, 2024, THE HOUSE ADOPTED AMENDMENT #2 AND PASSED HOUSE BILL 2269, AS AMENDED.
     AMENDMENT #2 rewrites the bill as follows:
CERTIFICATES OF NEED
     (1)  Except after applying for and receiving a permit granted by the health facilities commission ("commission") for those services specified ("certificate of need"), prohibits a person from establishing a satellite emergency department facility or a satellite inpatient facility by a hospital at a location other than the hospital's main campus;
     (2)  Establishes that the Tennessee Health Services and Planning Act of 2021 ("act") does not require a certificate of need for actions in a county that has no acute care hospital that is actively licensed under state law relative to health and located within the county;
     (3)  Establishes that the exception created by (2) does not apply to (i) a rehabilitation facility; (ii) a home care organization other than a home care organization; (iii) hospice; (iv) opiate addiction treatment provided through a nonresidential substitution-based treatment center for opiate addiction; (v) a nursing home; or (vi) organ transplantation;
     (4)  If the action to be taken pursuant to (2) is the establishment by a hospital of a satellite emergency department facility at a location other than such affiliate hospital's main campus, requires the satellite emergency department facility must be at least 10 miles away from any actively licensed acute care hospital or satellite emergency department facility located in another county;
     (5)  In a county other than an economically distressed eligible county without a licensed hospital or a county as described in (2), above, establishes that the act does not require a certificate of need for a hospital to establish a satellite emergency department facility at a location that is within 10 miles of such affiliate hospital's main campus, if such location is 10 miles or more from another actively licensed acute care hospital or satellite emergency department facility;
     (6)  If, on June 30, 2025, the initiation or provision of a service or the establishment or operation of a facility was subject to the requirement to obtain a certificate of need pursuant to the act but was not subject to the requirement to obtain a license pursuant to state law, and, on or after July 1, 2025, the initiation or provision of such service or the establishment or operation of such facility becomes subject to the requirement to obtain both a certificate of need pursuant to the act and a license pursuant to state law, authorizes a person to begin initiating or providing the service or establishing or operating the facility upon receiving the certificate of need or obtaining the license, whichever occurs first;
FACILITIES INCLUDED IN "HEALTHCARE INSTITUTIONS"
     (7)  Removes "intellectual disability institutional habilitation facility" and "ambulatory surgical treatment center" from the present law definition of "healthcare institution";
SERVICES AND ACTIVITIES PROHIBITED WITHOUT OBTAINING A CERTIFICATE OF NEED
     (8)  Removes from the list of healthcare actions or services that are prohibited except after applying for and receiving a certificate of need (i) burn unit services; (ii) neonatal intensive care unit services; (iii) providing MRI services or increasing the number of MRI machines except in Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby counties; (iv) initiating PET scan services in counties other than Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby; (v) linear accelerator services; and (vi) open heart surgery services;
MRIs
     (9)  Requires a person who initiates MRI services to notify the commission in writing that imaging services are being initiated and indicate whether MRI services will be provided to a patient who is 14 or younger on more than five occasions per year;
PET SCAN SERVICES
     (10)  Requires a provider of PET scan services established without a certificate of need to become accredited by the American College of Radiology and provide to the commission proof of the accreditation within two years of the date of licensure;
     (11)  Establishes that a provider of PET scan services established without a certificate of need that fails to comply with the accreditation requirement is subject to licensure sanction;
PROHIBITION AGAINST UNLICENSED INSTITUTIONS AND SERVICES
     (12)  Prohibits a person, partnership, association, or corporation, this state, a county or local government unit, and any division, department, board, or agency of a government unit, from establishing, conducting, operating, or maintaining the following in this state without a license: (i) a hospital; (ii) a recuperation center; (iii) a nursing home; (iv) a home for the aged; (v) a residential HIV supportive living facility; (vi) an assisted-care living facility; (vii) a home care organization; (viii) a residential hospice; (ix) a birthing center; (x) a prescribed child care center; (xi) a renal dialysis clinic; (xii) an outpatient diagnostic center; (xiii) an ambulatory surgical treatment center; (xiv) an adult care home; (xv) a traumatic brain injury residential home; (xvi) a burn unit; (xvii) a neonatal intensive care unit; (xviii)  MRIs; (xix)  PET scans; (xx) linear accelerator services; or (xxi) open heart surgery;
RULES FOR CHARITY CARE FOR AMBULATORY SURGICAL TREATMENT CENTERS
     (13)  In addition to applicable licensing standards and requirements applicable to all ambulatory surgical treatment centers, authorizes the commission to adopt by rule licensing standards for non-hospital ambulatory surgical treatment centers licensed on or after December 1, 2027.  Such standard much include, at a minimum, requirements that a non-hospital ambulatory surgical treatment center (i) participate in the TennCare medical assistance program and provide an amount of care to patients who are TennCare enrollees that is comparable to similarly situated hospital-based ambulatory surgical treatment centers, taking into account the types of outpatient surgeries, procedures, and treatments being performed in the facility; and (ii) provide an amount of charity care that is comparable to similarly situated hospital-based ambulatory surgical treatment centers, taking into account the types of outpatient surgeries, procedures, and treatments being performed in the facility;
     (14)  In developing licensing standards, requires the commission to complete a report by December 1, 2025, that includes a compilation of payor mix information, by geographical area and type of surgery or procedure, for outpatient surgeries, procedures, and treatments performed in hospitals and hospital-based ambulatory surgical surgery centers.  The payor mix information must include percentages of patients who are TennCare enrollees, medicare patients, or charity care patients.  The report must be developed with participation from and input of various stakeholders, including existing ambulatory surgical treatment centers, physicians, nonprofit hospitals, rural hospitals, investor-owned hospitals, and others in the discretion of the commission;
LONG-TERM CARE HOSPITALS
     (15)  Establishes that "long-term care hospital" means a hospital with a primary focus on patients with an average length of stay of more than 25 days;
     (16)  Establishes that the act does not require a certificate of need to establish or operate a long-term care hospital;
PLAN TO STUDY IMPACT OF CERTIFICATE OF NEED REFORM AND FACILITIES LICENSURE
     (17)  Requires the commission to create a plan to study, for at least six years, the impact of certificate of need reform and facilities licensure in the healthcare industry.  The commission MUST submit such plan to the speaker of the senate, the speaker of the house of representatives, the chair of the health committee of the house of representatives, and the chair of the health and welfare committee of the senate by December 31, 2024;
     (18)  While conducting the study, requires the commission to consult with the chair of the health committee of the house of representatives or the chair's designee who must be a member of the house of representatives, the chair of the health and welfare committee of the senate or the chair's designee who must be a member of the senate, and hospital, physician, and community leaders from each of the three grand divisions of this state to produce a report on the findings of the study;
     (19)  By December 31, 2026, and by December 31 of each even-numbered year thereafter through 2030, requires the commission to submit the report to the speaker of the senate, the speaker of the house of representatives, the chair of the health committee of the house of representatives, and the chair of the health and welfare committee of the senate on the progress and impact of certificate of need reform and facilities licensure in the healthcare industry; 
     (20)  Requires the commission to conduct the study and compile the reports required by the bill using existing resources within the commission's budget;
APPLICATION FOR CERTIFICATE OF NEED
     (21)  Requires an application filed with the commission to be accompanied by a nonrefundable examination fee fixed by the rules of the commission.  The examination fee may be applied to a second application for the same project if the letter of intent for the first application is voided for non-compliance with law or rule by the executive director, the commission, or a court.  The second application must be filed with the commission within 90 days of the voiding of the first letter of intent for the examination fee to be applied;
CONTESTED CASE PROCEEDINGS
     (22)  Within 15 days of a denial by the commission of all or part of an application, authorizes an applicant to petition the commission in writing for a hearing.  The petition must be filed with the executive director.  An applicant is barred from filing a petition for a contested case hearing after the fifteen-day period, and the commission has no jurisdiction to consider a late-filed petition.  Upon receipt of a timely filed petition, the commission must initiate a contested case proceeding;
     (23)  Requires that the contested case hearing be conducted in accordance with the Uniform Administrative Procedures Act;
     (24)  Requires that contested cases be heard by an administrative law judge sitting alone.  Petitions for contested cases received by the commission must be forwarded immediately to the administrative division of the secretary of state's office for assignment to an administrative law judge;
     (25)  Requires the administrative law judge to whom a case has been assigned to convene the parties for a scheduling conference within 15 days of the date the petition for a contested case is filed.  At the scheduling conference, the parties must state their respective positions on the mediation alternative described in the bill.  If the parties are unable to agree on a mediation alternative, then the scheduling order for the contested case adopted by the administrative law judge must establish a schedule that results in a hearing completed within 180 days of the date on which the petition for a contested case was received by the commission, with the initial order to be entered within 60 days of the date the hearing is completed.  Extensions of time or variances from the scheduling order must be granted sparingly, and only because of unforeseen developments that would cause substantial prejudice to a party;
     (26)  As an alternative to the contested case process, authorizes the parties to agree to mediation of the issues raised in the contested case.  The mediator must be designated by mutual agreement of the parties.  The parties may designate a mediator who is not listed as a qualified Supreme Court Rule 31 mediator, but such mediator must observe the standards of professional conduct set forth in Appendix A to Supreme Court Rule 31, to the extent applicable.  The mediator's fee must be shared equally among the parties, except that the state is not required to contribute to payment of the mediator's fee.  If mediation results in agreement of the parties, then the agreement must be memorialized in the order terminating the contested case.  A mediation proceeding under this bill is not subject to the scheduling order requirements set forth in (25);
     (27)  Declares the general assembly that the public policy of this state is that certificate of need contested cases should be resolved through mediation, and the parties to such proceedings are encouraged to pursue this alternative;
     (28)  Establishes that judicial review of the commission's final order in a contested case is as provided by law;
     (29)  Requires that costs of the contested case proceeding and appeals, including the administrative law judge's costs, deposition costs, expert witness fees, and reasonable attorney fees, be assessed against the losing party in the contested case.  If there is more than one losing party, then the costs must be divided equally among the losing parties.  Costs must not be assessed against the commission;
     (30)  Establishes that the provisions under this heading govern all contested cases relative to approval or denial decisions by the commission; and
HEALTH FACILITIES COMMISSION COMPOSITION
     (31)  Requires that one member of the commission be the commissioner of disability and aging, or an employee of the department of disability and aging, designated by the commissioner.
Statutes affected: 
Introduced: 68-11-213(b)(2), 68-11-213