Relates to the approval of hospital construction by the state hospital review and planning council

Summary of provisions

Section 1 of the bill would amend the opening paragraph and subdivision 1 of section 2802 of the public health law related to approval of hospital construction (i.e., CONs) to require the adoption of regulations by the State Hospital Review and Planning Council (SHRPC), as approved by the Commissioner of Health, to govern the approval process for hospital projects, subject to the provisions of section 2802.

Subdivision one of section 2802 would be amended to specify certain types of projects that would not require approval. These projects include routine repair or maintenance, including routine purchases and acquisition of minor equipment, as long as the total project cost does not exceed $10 million; one for one equipment replacements regardless of costs; non-clinical infrastructure proposals regardless of cost including, but not limited to, replacement of HVAC, and correction of cited deficiencies; and health information technology projects. While these projects would not require approval, notice of a project would have to be provided to the Commissioner and, where appropriate, written certification statements that the project complies with applicable statutes, codes and regulations.

Section 2 of the bill would amend subdivision 2 of section 2802 of the public health law to specify which types of projects would require a review by SHRPC prior to the Commissioner's approval, For the most part, this provision merely codifies what is currently in regulation except the dollar threshold for review would be changed to a minimum of $25 million. In addition, this subdivision is amended to provide time frames for when review of proposals must be completed, or the project is deemed approved. The time frame would be ninety days unless the project has to be reviewed by the SHRPC, in which case the time frame would be one hundred and fifty days.

Section 3 of the bill would amend subdivision 2-b of section 2802 of the public health law to provide that regulations may be adopted to raise the dollar thresholds for review (i.e., the $10 million and $25 million), Subdivision 2-c would also be amended to state that pre-opening certifications or surveys would not be required and would be replaced with appropriate certification statements of compliance.

In addition, the DOH would assess compliance during DOH's next survey of the hospital.

Section 4 would amend subdivision 4 of section 2802 of the public health law to reflect changes made to other sections of 2802.

Section 5 of the bill would make the bill effective 180 days after it becomes law.

Existing law

Current law requires that all construction projects receive the approval of the Commissioner. The current dollar threshold for review (in regulations) is $3 million. DOH recently issued a proposal to raise the amount to $6 million; this proposal would raise it to $10 million.

Current law does not specify which projects must be reviewed by SHRPC. The current dollar threshold set in regulations is $10 million. DOH recently issued a proposal to raise the threshold amount to $15 million; this proposal would raise it to $25 million.

Currently, DOH is not required to act on certificate of need applications within any specific time frames.

Current law does not address the issue of pre-opening certifications or surveys; however, it is the practice of the DOH to perform these certifications and surveys.

Justification

The CON process can be an effective health planning tool to ensure a fair and cost-effective distribution of quality health care resources across New York. Unfortunately, the process is overburdened by unnecessary process steps that could be eliminated without impacting patient safety or placing undue stresses on the state's finances.

As state staffing levels decrease, it is imperative to focus reviewers' energies on high-cost, complex projects that Could benefit from a thorough state analysis and public debate. More routine projects that do not involve new services or the addition of capacity should not have to undergo the same level of scrutiny.

Lack of timeliness in the current review process hampers providers' ability to adjust services to respond to market changes, patient preferences, new technologies, and evolving modes of care. Project delays often lead to increased project costs (e.g. labor, construction materials) , a portion of which is directly borne by the state through the Medicaid capital reimbursement structure.

This proposal would affect projects that are almost always approved, but are subject to unnecessary delays. Sometimes these projects are mandated by DOH as a result of deficiencies identified during a state or federal survey. However, the current review process often

prevents hospitals from meeting federal compliance deadlines for patients as quickly as possible.

Federal stimulus funds geared toward investing millions of dollars to create an interoperable electronic health record for all New Yorkers could be jeopardized by undue delays in reviewing new proposals for hospital health information technology upgrades.

This proposal would provide for modest efficiencies in the current review process and would allow DOH to focus its efforts and limited resources on those more consequential projects that appropriately require more attention.

Legislative history

None.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the one hundred and eightieth day after it shall become law.