CHAPTER 90

FORMERLY

SENATE BILL NO. 132

AS AMENDED BY SENATE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTER 93, TITLE 16, RELATING TO EQUITABLE HEALTH PLANNING AND REVIEW.

WHEREAS, effective health planning promotes access and availability to high quality health care at an affordable cost, while controlling excessive health care expenditures; and

WHEREAS, health planning and review in Delaware has resulted in improved health services and lower per capita costs for Delawareans as compared to neighboring States and the national average; and

WHEREAS, health planning is particularly important in view of rapid changes and rising expenditures in the health care fields; and

WHEREAS, the Governor's Commission on health Care Cost Management has recommended a dynamic health planning process for Delaware which builds on the strengths of the previous system, with greater focus on the needs of this State.

NOW, THEREFORE:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Part VIII, Title 16 of the Delaware Code by deleting Chapter 93 in its entirety and substituting the following:

"CHAPTER 93. HEALTH PLANNING AND RESOURCES MANAGEMENT

§9301. PURPOSE

It is the purpose of this Chapter to provide a rational framework for promoting the cost effective and efficient use of health care resources while striving to ensure the availability of and access to high quality and appropriate health care services.

§9302. Definitions

The following words, terms and phrases, when used in this Chapter, shall have the meanings ascribed to them in this section, except where the context indicates a different meaning:

(1) 'Certificate of need' shall mean the written approval of the state agency as defined in this section, of an application to undertake an activity subject to review as described in §9304 of this title.

(1) 'Health care facility' shall include hospital, psychiatric hospital,
tuberculosis hospital, skilled nursing facility, kidney disease treatment center, including freestanding hemodialysis unit, intermediate care- facility, ambulatory health care facility, community mental health and retardation facility, and blood bank, whether or not licensed or required to be licensed by the State, whether operated for profit or nonprofit and whether privately owned or operated or owned or operated by a unit of state or local government. The term does not include Christian Science sanatoriums operated or listed and certified by the First Church of Christ Scientist, Boston, Massachusetts. The term shall not include any physician's office, whether an individual or group practice, any independent clinical laboratory or any radiology laboratory. The term shall also not include the office of any other licensed health care provider, including, but not limited to, physical therapist, dentist, physician assistant, podiatrist, chiropractor, an independently practicing nurse or nurse practitioner, optometrist, pharmacist or psychologist. The term also shall not include any dispensary or first aid station located within a business or industrial establishment maintained solely for the use of employees, provided that the facility does not contain inpatient beds, nor shall it apply to any first aid station or dispensary or infirmary offering nonacute services exclusively for use by students and employees of a school or university, or by inmates and employees of a prison, provided that services delivered therein are not the substantial equivalent of hospital services in the same area or community. Further:

a. 'Hospital' shall mean a licensed institution which is primarily engaged
in providing to inpatients, by or under the supervision of physicians, diagnostic services and therapeutic services for medical diagnosis, treatment and care of injured, disabled or sick persons, or rehabilitation services for the rehabilitation of injured, disabled or sick persons. Such term does not include psychiatric or tuberculosis hospitals.

b. 'Psychiatric hospital' shall mean a licensed institution which is
primarily engaged in providing to inpatients, by or under the supervision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons.

c. 'Tuberculosis hospital' shall mean a licensed institution which is
primarily engaged in providing to inpatients, by or under the supervision of a physician, medical services for the diagnosis and treatment of tuberculosis.

d. 'Skilled nursing facility' shall mean a licensed institution or a
distinct part of an institution which is primarily engaged in providing to inpatients skilled nursing care and related services for patients who require medical or nursing care or rehabilitation services for the rehabilitation of injured, disabled or sick persons.

e. 'Intermediate care facility' shall mean a licensed institution which
provides, on a regular basis, health related care and services to individuals who do not require the degree of care and treatment which a hospital or skilled nursing facility is designed to provide, but who because of their mental or physical condition require health-related care and services (above the level of room and board).

a. 'Kidney disease treatment center' shall mean a facility (other than the patient's residence) in which patients suffering from permanent or temporary kidney failure are treated by use of an artificial kidney which separates wastes or poisons from the blood.

b. 'Ambulatory health care facility' shall mean a facility other than a
physician's private office, incorporated or unincorporated, that provides medical or surgical care on an organized basis to patients not requiring medical supervision for more than 24 hours and that is not part of a hospital but is organized and operated to provide medical or surgical care to outpatients and charges a distinct fee for use of the facility.

c. 'Community mental health and retardation facility' shall mean a
facility which provides such comprehensive services and continuity of care as emergency, outpatient, partial hospitalization, inpatient and consultation and education for individuals with mental illness, mental retardation or drug or alcohol addiction.

I. 'Blood bank' shall mean an independent organization collecting or

storing human blood or plasma.

(3) 'Health Resources Management Council' shall mean the body established
pursuant to 0303 of this title.

(4) 'Health services' shall mean clinically related (i.e., diagnostic curative
or rehabilitative) services provided in or through health care facilities.

(5) 'Person' shall mean an individual, a trust or estate, a partnership, a

corporation (including associations, joint stock companies and insurance companies), a state or political subdivision or instrumentality (including a municipal corporation) of a state.

(6) 'State Agency' shall mean the Bureau of Health Planning and Resources
Management (formerly Bureau of Health Planning and Resources Development) within the Department of Health and Social Services.

§9303 health Resources Management Council

(I) There is hereby established a Health Resources Management Council, to

consider matters relating to health planning for Delaware which will help ensure access and availability of appropriate high quality health care services and promote cost effective and efficient use of health care resources.

(2) The Health Resources Management Council shall consist of 15 members to be appointed by the Governor. Of the initial appointments, 5 shall be for 3 year terms, 5 shall be for 2 year terms and 5 shall be for 1 year terms. Thereafter, all appointments shall be for 3 year terms. Members shall serve no more than 2 consecutive terms. The membership shall be representative of all counties in the
State and shall include consumer, provider, business, government and insurer representation. A majority of members shall be other than health care providers.
The Governor shall appoint 1 member to serve as Chairman and 1 member to serve as

Vice-Chairman. The terms of office shall be for three years except that the

initial terms may be for a lesser period. Any vacancy shall be filled by the

Governor for the balance of the unexpired term. Members of the Council shall serve without compensation, except that they may be reimbursed for reasonable and necessary expenses incident to their duties, to the extent that funds are available and the expenditures are in accordance with State laws.

(3) Staff support for the Council shall be provided by the State agency, which shall be fully dedicated to health planning, data and regulatory functions as encompassed by this Chapter. The Director of the State Agency shall serve as
Secretary to the Council.

(1) The duties and responsibilities of the Council shall include, but not be
limited to, the following:

(a) Submit to the Secretary, Department of Health and Social Services, and the Director, Division of Planning, Research and Evaluation a State Health Plan, which shall conform to a statement of basic principles, goals and priorities that set forth an overall direction in which health care in Delaware should be proceeding. The underpinning for the plan and the other activities
of the Council shall be the pursuit of an appropriate balance among factors such as the availability, access, quality and cost of health care services and the prevention of avoidable health problems. The State Health Plan shall be
comprised of the statement of basic principles, goals and priorities along with analyses, guidance and criteria related to health status and health service issues, and other plans or parts of plans adopted by the Council;

(b) Review health-related plans from the various divisions and agencies of State government for consistency with these basic principles and goals;

(c) Ensure an opportunity for public review and comment of all components of the State Health Plan;

(d) Address specific health care issues in a timely and focused fashion so as to provide guidance to health care decision makers in both the private and public sectors;

(a) Develop specific criteria and other guidance for use in reviewing
certificate of need applications;

(b) Review Certificate of Need applications filed pursuant to this Chapter and make recommendations thereon to the State agency, except that providers of health care shall abstain from making recommendations involving their field of health care; and

(a) Gather and analyse data and information needed to carry out its

responsibilities. Identify the kinds of data- which are not available so that

efforts can be made to assure that legitimate data needs can be met in the future;

(a) Adopt by-laws and operating procedures as necessary for conducting its affairs.

§9304 qtivitie.s lobiett t2 r. view

Any person must obtain a Certificate of Need prior to undertaking any of the following activities:

(I) The construction, development or other establishment of a new health care facility;

(2) Any expenditure by or on behalf of a health care facility in excess of $750,000 which, under generally accepted accounting principles consistently

applied. is a capital expenditure. When a person makes an acquisition by or on behalf of a health care facility under lease or comparable arrangement, or through donation which would have required review if the acquisition had been by purchase, such acquisition shall be deemed a capital expenditure subject to review. With the concurrence of the Health Resources Management Council, the State agency may exempt from review capital expenditures in excess of $750,000 when determined to be necessary for maintaining the physical structure of a facility and not related to direct patient care. A notice of intent filed pursuant to §9305 of this title along with any other information deemed necessary by the Health Resources Management Council or the State agency shall provide the basis for exempting such capital expenditures from review;

(3) A change in bed capacity of a health care facility which increases or
decreases the total number of beds (or distributes beds among various categories, or relocates such beds from 1 physical facility or site to another ) by more than 10 beds or more than 10 percent of total licensed bed capacity, whichever is less, over a 2-year period;

(1) Health services which are offered in or through a health care facility and which were not offered on a regular basis in or through such health care facility within the 12-month period prior to the time such services would be offered, and for which the annual operating expenses exceed $250,000 during the first or second years of operation.

§9305. Procedures for review

Reviews under this Chapter shall be conducted in accordance with the following procedures:

(1) Notices of intent. - At least 30 days prior to submitting an application for review under this Chapter, applicants shall submit to the State agency a notice of intent in such form as may be determined by the State agency to. cover the scope and nature of the project. An application may be submitted less than 30 days from submitting the notice of intent only with the written approval of the State agency.

(1) Applications for review. - Application forms will be developed by the State agency after consultation with the Health Resources Management Council and may vary according to the nature of the application.

(1) Deadlines and time limitations. - Upon receipt of an application under this Chapter, the State agency shall have a maximum of 15 days to notify the applicant as to whether the application is considered complete. If complete,
written notification in accordance with subdivision (4) of this section will be provided. If incomplete, the applicant will be notified in writing of such
determination and will be advised of what additional information is required to make the application complete. When the additional information is received, the State agency again has a maximum of 15 days to determine whether the application is complete. The same steps shall be taken as with the initial submission each time that additional information is required.

Except as provided below, the review of an application shall take no longer than 90 days from the date of notification as covered under subdivision (4) of this section. If a public hearing is requested under subdivision (6) of this section, the maximum review period will be extended to 120 days from the date of notification. Within 30 days from the date of notification (60 days if a public hearing is requested) the State agency may, with the concurrence of the Health Resources Management Council, extend the maximum review period up to 180 days from the date of notification. Such extensions shall be invoked only as necessary to allow the development of appropriate review criteria or other guidance when these are lacking or to facilitate the simultaneous review of similar applications. The maximum review period can also be extended as mutually agreed to in writing by the State agency and the applicant.

In the case of a project required to remedy an emergency situation which threatens the safety of patients or the ability of the health facility to remain in operation, an abbreviated application shall be submitted in such format as the State agency prescribes. As quickly as possible, but within 72 hours after receipt, the State agency after consultation with the Chairman or Vice-Chairman of the Health Resources Management Council, if available, shall render a decision as to whether or not the project should be treated as an emergency and whether or not the application shall be approved.

(4) Agency review; notification. - Within 5 working days of determining that an application under this Chapter is complete, the State agency shall provide written notification of the beginning of a review. Such notification shall be sent directly to all health care facilities in the State and to others who request direct notification. A notice shall also appear in a newspaper of general circulation which shall serve as written notification to the general public. The date of notification is the date on which such notice appears in the newspaper. The notification shall identify the applicant, indicate the nature of the application, specify the period during which a public hearing in the course of the review as covered in subeivision (6) of this section may be requested, and indicate the manner in which notice will be provided of the time and place of any hearing so requested.

(5) Findings and recommendations. - Upon completion of a review under this

Chapter, and within the time frames outlined in subdivision (3) of this section, the State agency shall notify in writing the applicant and any one else upon request as to its decision, including the basis on which the decision was made. Decisions can be conditional but the conditions must be related to the specific project in question.

(6) Public hearing in the course of review. - Within 10 days after the date of notification as described in subdivision (4) of this section, a public hearing in the course of review may be requested by any person. Such request shall be in writing and made to the State agency. The State agency shall provide for a public hearing if requested and shall provide notification of the time and place for such

hearing in a newspaper of general circulation. The public hearing shall be held

not less than 14 days after such notice appears in the newspaper. The State agency

shall not impose fees for such hearings. An opportunity must be provided for any person to present testimony.

(7) Administrative reconsideration - Procedure for State Agency. - Any person

may, for good cause shown, request in writing a public hearing for purposes of

reconsideration of a State agency decision. The agency may not impose fees for

such a hearing. For purposes of this subdivision, a request for a public hearing

shall be deemed by the State agency to have shown good cause if it:

(a) Presents significant, relevant information not previously considered by the State agency;

(b) Demonstrates that there have been significant changes in factors or
circumstances relied upon by the State agency in reaching its decision;

(a) Demonstrates that the State agency has materially failed to follow its adopted procedures in reaching its decision; or

(b) Provides such other basis for a public hearing as the State agency
determines constitutes good cause.

To be effective, a request for such a hearing shall be rceived within 30 days of the State agency decision. The hearing shall commence within 45 days of receipt of the request.

Notification of such a public hearing shall be sent, prior to the date of the hearing, to the person requesting the hearing and the applicant and shall be sent to others upon request. The State agency shall make written findings which state the basis for its decision within 45 days after the conclusion of such hearing. A decision of the State agency following a public hearing under this subdivision shall be considered a decision of the State agency for purposes of subdivisions (5), (8), and (9) of this section.

(8) Same - Procedure for Health Resources Management Council. - If the

State-agency makes a decision regarding a Certificate of Need application which is inconsistent with the recommendation from the Health Resources Management Council, the State agency shall submit to the Council within 15 days a written detailed statement of the reasons for the inconsistency.

Such decision (and the record upon which it was made) shall, upon written request of the Health Resources Management Council, be reviewed by a 5 person Appeals Board appointed by the Secretary, Department of Health and Social Services. A request for review under this subdivision must be received by the Secretary, Department of Health and Social Services within 30 days of the State agency decision. The hearing shall commence within 45 days of receipt of the

request. The decision of the Board shall be made in writing within 45 days after the conclusion of such hearing. These written findings shall be sent to the

applicant, the Health Resources Management Council, and the State agency.

The decision of the Appeals Board shall be considered the final decision of the State agency; however, the Appeals Board may remand the matter to the State agency for further action or consideration.

(9) Same - Applicant. - Any decision of the State agency under this Chapter (and the record upon which it was made) shall, upon request of the applicant, be reviewed by a 5 person Appeals Board appointed by the Secretary, Department of Health and Social Services. A request for review under this subdivision must be received by the Secretary, Department of Health and Social Services within 30 days of the State Agency decision. The hearing shall commence within 45 days of receipt of the request. The decision of the Appeals Board shall be made in writing within 45 days after the conclusion of such hearing. These written findings shall be sent to the applicant, the Health Resources Management Council, and the State agency.

The decision of the Appeals Board shall be considered the final decision of the State agency; however, the Appeals Board may remand the matter to the State agency for further action or consideration. The decision of the Appeals Board may be appealed by the applicant within 30 days to the Superior Court. Such appeal shall be on the record of the proceedings before the Appeals Board.

(1) Access to public. - The State agency shall provide for access by the
general public to all applications reviewed under this Chapter and to all other written materials pertinent to any such review.

(2) Filing fees. - Within 5 working days of determining that an application under this Chapter is complete, the State agency shall notify the applicant of any filing fee due.

Filing fees shall be determined from the following table: Capital Expenditure Filing Fee

Less than $500,000 $100

$500,000 to $999,999 $750

$1,000,000 to $4,999,999 $3,000

$5,000,000 to $9,999,999 $7,500

$10,000,000 and over $10,000

Filing fees shall be due 30 days after the data of notification of the beginning of review as covered under subdivision (4) o. this section. This due date may be extended up to 10 additional days at the discretion of the State agency. Applications for which filing fees have not been paid within this time frame shall be considered to be withdrawn. All filing fees shall be deposited in the general fund.

§9306. Review considerations

In conducting reviews under this Chapter, the Health Resources Management Council and the State agency shall consider as appropriate at least the following:

(1) The relationship of the proposal to the State Health Plan adopted by the Health Resources Management Council pursuant to §9303 of this title.

(2) The need of the population for the proposed project.

(3) The availability of less costly and/or more effective alternatives to the proposal.

(1) The relationship of the proposal to the existing health care delivery
system.

(1) The immediate and long term viability of the proposal in terms of the applicant's access to financial, management and other necessary resources.

(6) The anticipated effect of the proposal on the costs of and charges for health care.

(7) The anticipated effect of the proposal on the quality of health care. §9307. period of Effectiveness of Certificate of Need

(a) When an application for review under this Chapter is approved, the State agency shall issue a Certificate of Need to the applicant. A Certificate of Need shall be valid for 1 year from the date such approval was granted.

(b) At least 30 days prior to the expiration of the Certificate of Need, the applicant shall inform the State agency in writing of the project's status. The State agency shall determine if sufficient progress has been made for the Certificate of Need to continue in effect. If sufficient progress has not been made, the applicant may
request, in writing, to the State agency that a 6-month extension be granted. After consultation with the Health Resources Management Council, the State agency shall either allow the certificate to expire or grant such extension. A decision by the State agency to deny an extension may be appealed pursuant to §9305(9) of this title.

§9308. Sanctions

(a) Any person undertaking an activity subject to review as described in §9304 of this title, without first being issued a Certificate of Need for that activity, shall have his license or other authority to operate denied, revoked or restricted as deemed appropriate by the responsible licensing or authorizing agency of the State and an order in writing to such effect shall be issued by that licensing or authorizing agency.

(a) In addition to subsection (a) of this section, the State agency or an
adversely affected health care facility may maintain a civil action in the Court of Chancery to restrain or prohibit any person from undertaking an activity subject to review as described in §9304 of this title without first being issued a Certificate of Need

(b) A person who willfully undertakes an activity subject to review as described in §9304 of this title and who has not received a Certificate of Need for that activity shall be fined not less than $500 nor more than 82,500 for each offense and each day of a continuing violation after notice of violation shall be considered a separate offense. The Superior Court shall have jurisdiction over criminal violations under this subsection.

§9309. Surrender._Revocation and Transfer of Certificate of Need

(a) A Certificate of Need may be surrendered by the holder upon written
notification to the State agency and such surrender shall become effective immediately upon receipt by the State agency.

(a) A Certificate of Need may be revoked by the State agency in the case of misrepresentation in the Certificate of Need application, failure to undertake the activity for which the Certificate of Need was granted in a timely manner or loss of license or other authority to operate. Prior to revoking a Certificate of Need, the State agency shall provide written notice to the holder of the certificate stating its intent to revoke the certificate and providing the holder at least 30 days to voluntarily surrender the certificate or to show good cause whey the certificate should not be revoked. No certificate of need shall be revoked by the State agency without first consulting with the Health Resources Management Council and providing the holder of the certificate an opportunity for a hearing. The State agency's decision to revoke a Certificate of Need may be appealed pursuant to §9305(9) of this title.

(a) No Certificate of Need issued under this Chapter, and no rights or privileges arising therefrom, shall be subject to transfer or assignment, directly or indirectly, except upon order or decision of the State agency specifically approving the same, issued pursuant to application supported by a finding from the evidence that the public to be served will not be adversely affected thereby.

§9310. Immunity

No member, officer or employee of any planning body or health care facility shall be subject to, and such persons shall be immune from, any claim, suit, liability, damages or any other recourse, civil or criminal, arising from any act or proceeding, decision or determination undertaken or performed, or recommendation made while discharging any duty or authority under this Chapter, so long as such person acted in

good faith, without malice, and within the scope of his duty or authority under this Chapter or any other provisions of the Delaware law, federal law or regulations or duly adopted rules and regulations providing for the administration of this Chapter, good faith being presumed until proven otherwise, with malice required to be shown by the complainant."

Section 2. Severability

If any clause, sentence, section, provision or part of this Act shall be adjudged to be unconstitutional or invalid for any reason by any court of competent jurisdiction, such judgement shall not impair, invalidate or affect the remainder of this Act which shall remain in full force and effect.

Section 3. Bepealind clause

All laws and parts of laws in conflict herewith are hereby repealed to the extent of such conflict.

Section 4. Effective Date

This Act shall become effective 90 days after its passage.

Approved July 2, 1987