HOUSE BILL NO. 331
AS AMENDED BY HOUSE AMENDMENT NOS. 1, 3, 5, 7 & 8
AN ACT TO AMEND CHAPTER 93, TITLE 16, DELAWARE CODE RELATING TO HEALTH PLANNING AND RESOURCES MANAGEMENT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section I. 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.
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) 'Board' shall mean the Delaware Health Resources Board established pursuant to §9303 of this title.
(2) 'Bureau' shall mean the Bureau of Health Planning and Resources management within the Department of Health and Social Services.
(3) 'Certificate of Need' shall mean the written approval of an application to undertake an activity subject to review as described in §9304 of this title.
(4) 'Health care facility' shall include hospital, nursing home, freestanding birthing center, freestanding surgical center, freestanding emergency center, prescribed pediatric extended care center, medical detoxification setting, blood bank, kidney disease treatment center and alcoholism rehabilitation facility, 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 non-acute 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 any nonfederal facility licensed as such pursuant to Chapter 10 of this title and more particularly §50 of the State Board of Health Regulations.
b. 'Nursing home' shall mean any nonfederal facility licensed as such pursuant to Chapter 11 of this title and more particularly §57 (Skilled Care) and §58 (Intermediate Care) of the State Board of Health Regulations.
c. 'Freestanding birthing center' shall mean any facility licensed as such pursuant to Chapter 1 of this title and more particularly in the State Board of Health Regulations.
d, 'Freestanding surgical center' shall mean any facility licensed as such pursuant to Chapter 1 of this title and more particularly in the State Board of Health Regulations.
a, 'Freestanding emergency center' shall mean any facility licensed as such pursuant to Chapter 1 of this title and more particularly §52 of the State Board of Health Regulations.
f. 'Prescribed pediatric extended care center' shall mean any facility licensed as such pursuant to Chapter 1 of this title and more particularly in the State Board of Health Regulations.
a. 'Medical detoxification setting' shall mean any facility licensed as such pursuant to Chapters 22 and 48 of this title and more particularly §6 of the Division of Alcoholism, Drug Abuse and Mental Health Regulations.
b. 'Blood bank' shall mean an independent organization collecting or storing human blood or plasma.
c. '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.
d. 'Alcoholism rehabilitation facility' shall mean a facility which provides postdetoxification intensive residential treatment for alcoholism involving a highly structured program not exceeding 28 days for a majority of residents.
(5) 'Health services' shall mean clinically related (1.e., diagnostic, curative or rehabilitative) services provided in or through health care facilities.
(6) 'Major medical equipment' shall mean a single unit of medical equipment or a single system of components with related functions which is used for the diagnosis or treatment of patients and which: (i) Entails a capital expenditure as set forth in this chapter which exceeds $750,000; (ii) represents medical technology which is not yet available in Delaware; or (iii) represents medical technology which has been designated by the Board as being subject to review. Prior to such designation of medical technology by the Board, medical technology previously designated by the Health Resources Management Council shall continue to be subject to review. The Board may exempt from review a capital expenditure used to acquire major medical equipment which represents medical technology which Is not yet available in Delaware. A notice of intent filed pursuant to §9305 of this title along with any other information deemed necessary by the Board shall provide the basis for exempting such a capital expenditure from review.
(1) '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.
§9303. Delaware Health Resources Board.
(a) There is hereby established a Delaware Health Resources Board to foster the cost-effective and efficient use of health care resources and the availability of and access to high quality and appropriate health care services.
(b) The Board shall consist of a Chair, a Vice Chair and 19 other members, all of which shall be appointed by the Governor. Appointments shall be for 3-year terms except that of the initial appointments, 7 shall be for 3-year terms, 7 shall be for 2-year terms and 7 shall be for 1-year terms. Members shall serve no more than 2 full terms consecutively. The membership shall be representative of all counties in the State. In addition to the Chair and the Vice Chair, the membership shall consist of 1 representative designated by the Delaware Health Care Commission; 1 representative designated by the Secretary of the Department of Health and Social Services; 1 representative of organized labor; 1 representative of the health insurance industry; 1 representative designated by the Association of Delaware Hospitals; 1 representative designated by the Medical Society of Delaware; 1 representative designated by the Delaware Health Care Facilities Association; 1 representative of a provider group other than hospitals, nursing homes or physicians; 1 representative designated by the State Chamber of Commerce; 1 representative designated by the Delaware Health Care Coalition; 1 representative involved in purchasing health care coverage on behalf of State employees; 1 other representative involved in purchasing health care coverage for employers with more than 200 employees; and 9 representatives of the public-at-large and not involved In the delivery of health care, health care insurance or the purchasing of health care coverage for an employer with more than 200 employees. The Chair and Vice Chair shall be appointed from among the 9 representatives of the public-at-large. Any vacancy shall be filled by the Governor for the balance of the unexpired term. A quorum shall consist of at least 50 percent of the membership. Members of the Board 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.
(c) The Board is an independent public instrumentality. For administrative and budgetary purposes only, the Board shall be placed within the Department of Health and Social Services. Staff support for the Board shall be provided by the Bureau of Health Planning and Resources Management. The Bureau Director shall serve as Secretary to the Board and as its Chief Administrative Officer.
(d) The duties and responsibilities of the Board shall include, but not be limited to the following:
(1) Develop a Health Resources Management Plan which shall assess the supply of health care resources, particularly facilities and medical technologies, and the need for such resources. A statement of principles to guide the allocation of resources and specific criteria and other guidance for use in reviewing Certificate of Need applications shall be essential aspects of the plan. Prior to adoption of the plan or revision of the plan, the Board shall provide written notification of the proposed action and conduct a public hearing. 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 notification shall generally describe the plan or plan revisions under consideration and announce the time and place of the public hearing. The notification shall also provide a period of at least 21 days during which written comments may be submitted. The public hearing shall be held not less than 14 days after the notice appears in the newspaper. No fees shall be imposed for such hearings. An opportunity must be provided for any person to present testimony. Also, prior to adoption, the plan or revision of the plan shall be submitted to the Delaware Health Care Commission for review and comment and to the Secretary, Department of Health and Social Services. The plan or revision shall become effective upon the written approval of the Secretary;
(2) Review Certificate of Need applications filed pursuant to this chapter and make decisions on same. Decisions can be conditional but the conditions must be related to the specific project in question;
(3) Gather and analyze 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;
(4) Address specific health care issues as requested by the Governor or the General Assembly;
(5) Adopt bylaws as necessary for conducting its affairs. Board members shall comply with the provisions of Chapter 58, Title 29 of the Delaware Code (State Ethics Code) and the Board shall operate in accordance with Chapter 100, Title 29 of the Delaware Code (Freedom of Information Act); and
(6) Coordinate activities with the Delaware Health Care Commission, the Department of Health and Social Services and other groups as appropriate.
§9304. Activities Subject to Review.
Any person must obtain a Certificate of Need prior to undertaking any of the following activities:
(1) The construction, acquisition, development or other establishment of a health care facility. The acquisition of a health care facility by acquiring the assets or a controlling equity interest may be exempted from review by the Board. A notice of intent filed pursuant to §9305 of this title, along with any other information deemed necessary by the Board, shall provide the basis for exempting such capital expenditure from review;
(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. The Board 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 Board 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 one 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;
(4) 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 1st or 2nd year of operation;
(5) The acquisition of major medical equipment, whether or not by a health care facility and whether or not the acquisition is through a capital expenditure, an operating expense or a donation. In the case of major medical equipment acquired by an entity outside of Delaware, the use of that major medical equipment within Delaware, whether or not on a mobile basis, is subject to review under this Chapter. Major medical equipment which is acquired for use in a dispensary or first aid station located within a business or industrial establishment maintained solely for the use of employees or in a first aid station, dispensary or infirmary offering services exclusively for use by students and employees of a school or university or by inmates and employees of a prison is not subject to review.
§9305. Procedures for Review.
Reviews under this chapter shall be conducted in accordance with the following procedure:
(1) Notices of intent. At least 30 days prior to submitting an application for review under this chapter, applicants shall submit to the Bureau a notice of intent in such form as may be determined by the Board 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 Board.
(1) Applications for review. Application forms will be developed by the Board and may vary according to the nature of the application.
(2) Deadlines and time limitations. Upon receipt of an application under this chapter, the Bureau 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 Bureau 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 Board may 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 Board 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 Board prescribes. As quickly as possible, but within 72 hours after receipt, the Board shall render a decision as to whether or not the project shall be treated as an emergency and whether or not the application shall be approved. The Chair or Vice Chair of the Board shall be authorized to render such decision and shall have discretion as to the decision making process.
(1) Agency review; notification. Within 5 working days of determining that an application under this chapter is complete, the Bureau 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 subdivision (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.
(1) Findings. Upon completion of a review under this chapter, and within the time frames outlined in subdivision (3) of this section, the Bureau shall notify in writing the applicant and anyone else upon request as to the Board's 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.
(1) 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 in writing by any person. The Board 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. Fees shall not be imposed for such hearings. An opportunity must be provided for any person to present testimony.
(7) Administrative Reconsideration - Procedure for Board. Any person may, for a good cause shown, request in writing a public hearing for purposes of reconsideration of a Board decision rendered under subdivision (5) of this Section. The Board may not impose fees for such a hearing. For purposes of this subdivision, a request for a public hearing shall be deemed by the Board to have shown good cause if it
a. Presents newly discovered, significant, relevant information not previously available or considered by the Board; and
b. Demonstrates that there have been significant changes in factors or circumstances relied upon by the Board in reaching its decision; or
c. Demonstrates that the Board has materially failed to follow its adopted procedures in reaching its decision.
A request for such a hearing must be received within ten (10) days of the decision. The hearing shall commence within forty-five (45) days of the request.
Notice of such public hearing shall be sent, not less than fifteen (15) days prior to the date of the hearing, to the person requesting the hearing and to the applicant, and shall be sent to others upon request. Following completion of the hearing, the Board shall, within forty-five (45) days, issue its written decision which shall set forth the findings of fact and conclusion of law upon which its decision is based.
(8) Appeal - Applicant. A decision of the Board following review of an application pursuant to subdivision (5) of this Section, an administrative reconsideration pursuant to subdivision (7) of this Section, or the denial of a request for extension of a Certificate of Need pursuant to §9307 of this Title, may be appealed within thirty (30) days to the Superior Court. Such appeal shall be on the record.
(9) Access by public. The general public shall be provided access to all applications reviewed under this chapter and to all other written materials pertinent to any review of an application.
(10) Filing fees. Within 5 working days of determining that an application under this chapter is complete, the Bureau 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 to over $10,000
Filing fees shall be due 30 days after the date of notification of the beginning of review as covered under subdivision (4) of this section. This due date may be extended up to 10 additional days at the discretion of the Bureau. 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 Board shall consider as appropriate at least the following:
(1) The relationship of the proposal to the Health Resources Management Plan adopted pursuant to §9303 of this title. Prior to adoption of a Health Resources Management Plan by the Board, the State health plan last in use by the Health Resources Management Council shall comprise such plan;
(1) The need of the population for the proposed project;
(1) The availability of less costly and/or more effective alternatives to the proposal, including alternatives involving the use of resources located outside the State of Delaware;
(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;
(1) The anticipated effect of the proposal on the costs of and charges for health care; and
(1) The anticipated effect of the proposal on the quality of health care.
§9307. Period of Effectiveness of Certificate of Need.
(a) 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 Board in writing of the project's status. The Board 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 Board, that a 6-month extension be granted. The Board shall either allow the certificate to expire or grant such extension. A decision by the Board to deny an extension may be appealed pursuant to §9305(B) of this title.
(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 its license or other Board 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.
(b) In addition to subsection (a) of this section, the Board or any 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.
(c) 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 $2,500 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 Board and such surrender shall become effective immediately upon receipt of the Board.
(b) A Certificate of Need may be revoked by the Board 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 Board to operate. Prior to revoking a Certificate of Need, the Board 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 why the certificate should not be revoked. No Certificate of Need shall be revoked by the Board without first providing the holder of the certificate an opportunity for a hearing. The Board's decision to revoke a Certificate of Need may be appealed pursuant to §9305(8) of this title.
(c) 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 Board 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.
No member, officer or employee of the Board, the Bureau 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 recommendations made while discharging any duty or Board under this chapter, so long as such person acted in good faith, without malice, and within the scope of his duty or Board 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 to be shown by the complainant.
§9311. Sunset Provisions.
The Board and all provisions of this chapter shall sunset June 30, 1996. Prior to this date, the Delaware Health Care Commission or its successor agency shall have completed a review of the effectiveness of Certificate of Need."
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. Repealing 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 January I, 1994 or 90 days after its passage, whichever comes later.
Approved June 22, 1994