1.1 	A bill for an act
1.2 	relating to health; providing an exception to the
1.3 	hospital construction moratorium; amending Minnesota
1.4 	Statutes 2004, section 144.551, subdivision 1.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 144.551,
1.7 	subdivision 1, is amended to read:
1.8 		Subdivision 1.Restricted construction or modification.
 1.9 	(a) The following construction or modification may not be
1.10 	commenced:
1.11 	(1) any erection, building, alteration, reconstruction,
1.12 	modernization, improvement, extension, lease, or other
1.13 	acquisition by or on behalf of a hospital that increases the bed
1.14 	capacity of a hospital, relocates hospital beds from one
1.15 	physical facility, complex, or site to another, or otherwise
1.16 	results in an increase or redistribution of hospital beds within
1.17 	the state; and
1.18 	(2) the establishment of a new hospital.
1.19 	(b) This section does not apply to:
1.20 	(1) construction or relocation within a county by a
1.21 	hospital, clinic, or other health care facility that is a
1.22 	national referral center engaged in substantial programs of
1.23 	patient care, medical research, and medical education meeting
1.24 	state and national needs that receives more than 40 percent of
1.25 	its patients from outside the state of Minnesota;
2.1 	(2) a project for construction or modification for which a
2.2 	health care facility held an approved certificate of need on May
2.3 	1, 1984, regardless of the date of expiration of the
2.4 	certificate;
2.5 	(3) a project for which a certificate of need was denied
2.6 	before July 1, 1990, if a timely appeal results in an order
2.7 	reversing the denial;
2.8 	(4) a project exempted from certificate of need
2.9 	requirements by Laws 1981, chapter 200, section 2;
2.10 	(5) a project involving consolidation of pediatric
2.11 	specialty hospital services within the Minneapolis-St. Paul
2.12 	metropolitan area that would not result in a net increase in the
2.13 	number of pediatric specialty hospital beds among the hospitals
2.14 	being consolidated;
2.15 	(6) a project involving the temporary relocation of
2.16 	pediatric-orthopedic hospital beds to an existing licensed
2.17 	hospital that will allow for the reconstruction of a new
2.18 	philanthropic, pediatric-orthopedic hospital on an existing site
2.19 	and that will not result in a net increase in the number of
2.20 	hospital beds.  Upon completion of the reconstruction, the
2.21 	licenses of both hospitals must be reinstated at the capacity
2.22 	that existed on each site before the relocation;
2.23 	(7) the relocation or redistribution of hospital beds
2.24 	within a hospital building or identifiable complex of buildings
2.25 	provided the relocation or redistribution does not result in:
2.26 	(i) an increase in the overall bed capacity at that site; (ii)
2.27 	relocation of hospital beds from one physical site or complex to
2.28 	another; or (iii) redistribution of hospital beds within the
2.29 	state or a region of the state;
2.30 	(8) relocation or redistribution of hospital beds within a
2.31 	hospital corporate system that involves the transfer of beds
2.32 	from a closed facility site or complex to an existing site or
2.33 	complex provided that:  (i) no more than 50 percent of the
2.34 	capacity of the closed facility is transferred; (ii) the
2.35 	capacity of the site or complex to which the beds are
2.36 	transferred does not increase by more than 50 percent; (iii) the
3.1 	beds are not transferred outside of a federal health systems
3.2 	agency boundary in place on July 1, 1983; and (iv) the
3.3 	relocation or redistribution does not involve the construction
3.4 	of a new hospital building;
3.5 	(9) a construction project involving up to 35 new beds in a
3.6 	psychiatric hospital in Rice County that primarily serves
3.7 	adolescents and that receives more than 70 percent of its
3.8 	patients from outside the state of Minnesota;
3.9 	(10) a project to replace a hospital or hospitals with a
3.10 	combined licensed capacity of 130 beds or less if:  (i) the new
3.11 	hospital site is located within five miles of the current site;
3.12 	and (ii) the total licensed capacity of the replacement
3.13 	hospital, either at the time of construction of the initial
3.14 	building or as the result of future expansion, will not exceed
3.15 	70 licensed hospital beds, or the combined licensed capacity of
3.16 	the hospitals, whichever is less;
3.17 	(11) the relocation of licensed hospital beds from an
3.18 	existing state facility operated by the commissioner of human
3.19 	services to a new or existing facility, building, or complex
3.20 	operated by the commissioner of human services; from one
3.21 	regional treatment center site to another; or from one building
3.22 	or site to a new or existing building or site on the same
3.23 	campus;
3.24 	(12) the construction or relocation of hospital beds
3.25 	operated by a hospital having a statutory obligation to provide
3.26 	hospital and medical services for the indigent that does not
3.27 	result in a net increase in the number of hospital beds;
3.28 	(13) a construction project involving the addition of up to
3.29 	31 new beds in an existing nonfederal hospital in Beltrami
3.30 	County;
3.31 	(14) a construction project involving the addition of up to
3.32 	eight new beds in an existing nonfederal hospital in Otter Tail
3.33 	County with 100 licensed acute care beds;
3.34 	(15) a construction project involving the addition of 20
3.35 	new hospital beds used for rehabilitation services in an
3.36 	existing hospital in Carver County serving the southwest
4.1 	suburban metropolitan area.  Beds constructed under this clause
4.2 	shall not be eligible for reimbursement under medical
4.3 	assistance, general assistance medical care, or MinnesotaCare;
4.4 	(16) a project for the construction or relocation of up to
4.5 	20 hospital beds for the operation of up to two psychiatric
4.6 	facilities or units for children provided that the operation of
4.7 	the facilities or units have received the approval of the
4.8 	commissioner of human services;
4.9 	(17) a project involving the addition of 14 new hospital
4.10 	beds to be used for rehabilitation services in an existing
4.11 	hospital in Itasca County; or 
4.12 	(18) a project to add 20 licensed beds in existing space at
4.13 	a hospital in Hennepin County that closed 20 rehabilitation beds
4.14 	in 2002, provided that the beds are used only for rehabilitation
4.15 	in the hospital's current rehabilitation building.  If the beds
4.16 	are used for another purpose or moved to another location, the
4.17 	hospital's licensed capacity is reduced by 20 beds.; or 
4.18 	(19) a project involving the establishment of a new
4.19 	hospital in the city of Maple Grove that includes 250 or fewer
4.20 	licensed beds and participates in the Medicare and Medicaid
4.21 	programs, by an existing hospital that relocates or
4.22 	redistributes the beds from its current site or adds new
4.23 	licensed beds, and is owned by a nonprofit corporation that is
4.24 	exempt from federal income tax under section 501(c)(3) of the
4.25 	Internal Revenue Code, or has applied for an exemption.  The new
4.26 	hospital's initial inpatient services must include at least
4.27 	medical and surgical services, obstetrical and gynecological
4.28 	services, intensive care services, orthopedics, pediatrics,
4.29 	noninvasive cardiac diagnostics, behavioral health, including
4.30 	mental health services for children and adolescents, and
4.31 	emergency room services.  The project applicant must
4.32 	demonstrate, to the satisfaction of the commissioner, the
4.33 	ability of the project applicant to meet the criteria listed in
4.34 	this clause.  In making a determination, the commissioner shall
4.35 	weigh each criterion on a 100-point scale according to the
4.36 	points assigned in this clause:
5.1 	(i) the hospital will have a significant commitment to
5.2 	providing uncompensated care, including discounts for uninsured
5.3 	patients, coordination with community health centers and other
5.4 	providers of care to low-income uninsured persons, and
5.5 	coordination with other hospitals providing uncompensated care
5.6 	and serving public program participants, 16 points;
5.7 	(ii) the project's initial mental health services will
5.8 	include, in addition to inpatient behavioral health services,
5.9 	stabilization services for children and adolescents in acute
5.10 	psychiatric crisis, mental health and substance abuse
5.11 	stabilization and referral services, nonovernight children and
5.12 	adolescent observation services, intensive child and adolescent
5.13 	outpatient services, and outpatient chemical dependency services
5.14 	for persons over age 16, 16 points;
5.15 	(iii) the applicant demonstrates the ability to provide and
5.16 	staff sufficient new beds to meet the growing needs of the Maple
5.17 	Grove service area and the surrounding communities currently
5.18 	served by the applicant, 14 points;
5.19 	(iv) the hospital will be a site for training for health
5.20 	care related occupations and have a commitment to providing
5.21 	clinical training programs for physicians and other health care
5.22 	providers, including, but not limited to, obstetrics and
5.23 	gynecology, pediatrics, psychiatry, and pediatric psychiatry in
5.24 	coordination with other medical education training programs in
5.25 	the state, ten points;
5.26 	(v) the applicant has a record of providing high quality
5.27 	health care services, and the proposal demonstrates a commitment
5.28 	to quality care and patient safety, nine points;
5.29 	(vi) the hospital will have a positive impact on the
5.30 	emergency medical services system, including the coordination
5.31 	and provision of trauma services and the licensed emergency
5.32 	ambulance providers currently serving the area, and a positive
5.33 	impact on the continuity of patient emergency medical care,
5.34 	seven points;
5.35 	(vii) the hospital will operate in clinical coordination
5.36 	with other hospitals in Hennepin County providing additional
6.1 	specialized services at volume levels conducive to the
6.2 	maintenance of high quality care, six points;
6.3 	(viii) the applicant or a member organization of the
6.4 	nonprofit corporation owns a hospital in which an automated
6.5 	patient medical records system, including physician order entry,
6.6 	has been or is in the process of being implemented, six points;
6.7 	(ix) the hospital will have a positive impact on the
6.8 	viability of existing providers, including physicians, in the
6.9 	Maple Grove service area, five points;
6.10 	(x) the hospital will increase competition in the health
6.11 	care marketplace and will not add to the pressure to consolidate
6.12 	the provision of health care services, five points;
6.13 	(xi) the project will include ambulatory care services
6.14 	colocated with the hospital component of the project, including
6.15 	mental health services, urgent care services, pediatrics, and
6.16 	imaging services, three points; and 
6.17 	(xii) the project will provide a broad range of senior
6.18 	services to enable seniors to remain living in the community,
6.19 	three points.  The exception under clause (19) is available for
6.20 	the establishment of only one new hospital.  Between June 30 and
6.21 	August 1, 2005, any entity that has a plan for a hospital that
6.22 	has been previously determined by the commissioner to be in the
6.23 	public interest according to section 144.552 and desires to
6.24 	establish a new hospital must submit to the commissioner an
6.25 	application for an exception under clause (19).  The application
6.26 	must contain the plan, a true copy of the commissioner's
6.27 	determination, any additional relevant evidence not contained in
6.28 	the plan that is supportive of the application, and evidence of
6.29 	compliance with the criteria specified in clause (19).  The
6.30 	commissioner may request information from an applicant that the
6.31 	commissioner deems necessary and relevant to review an
6.32 	application under clause (19).  An applicant shall pay the
6.33 	commissioner for the commissioner's cost of reviewing the plan,
6.34 	as determined by the commissioner and notwithstanding section
6.35 	16A.1283.  Money received by the commissioner under clause (19)
6.36 	shall be used by the commissioner for the purpose of
7.1 	administering clause (19).
7.2 	(c) If there is only one applicant under paragraph (b),
7.3 	clause (19), the commissioner shall review the application to
7.4 	determine its compliance with the criteria.  If the commissioner
7.5 	determines that the application complies with the criteria, the
7.6 	commissioner shall issue an order approving the application.
7.7 	(d) If there is more than one applicant under paragraph
7.8 	(b), clause (19), between June 30 and August 1, 2005, the
7.9 	commissioner shall determine which plan or plans continue to be
7.10 	in the public interest and the applicant's compliance with the
7.11 	criteria.  If more than one applicant would meet the criteria,
7.12 	the commissioner shall determine which applicant has
7.13 	demonstrated that it is best able to provide services consistent
7.14 	with the criteria in paragraph (b), clause (19).
7.15 	(e)(1) The commissioner shall make the determination in
7.16 	paragraph (d) by order following a hearing according to this
7.17 	paragraph.  The hearing shall not constitute or be considered to
7.18 	be a contested case hearing under chapter 14 and shall be
7.19 	conducted solely under the procedures specified in this
7.20 	paragraph.  The hearing shall commence upon at least 30 days'
7.21 	notice to the applicants by the commissioner, but no later than
7.22 	October 15.  The hearing may be conducted by the commissioner or
7.23 	by a person designated by the commissioner.  The designee may be
7.24 	an administrative law judge.  The purpose of the hearing shall
7.25 	be to receive evidence to assist the commissioner in determining
7.26 	which applicant has demonstrated that it best meets the criteria
7.27 	in paragraph (b), clause (19).
7.28 	(2) The parties to the hearing shall consist only of those
7.29 	applicants under paragraph (b), clause (19), who have submitted
7.30 	a completed application that the commissioner has determined
7.31 	would be in the public interest.  Each applicant shall have the
7.32 	right to be represented by counsel, to present evidence deemed
7.33 	relevant by the commissioner, and to examine and cross-examine
7.34 	witnesses.  Persons who are not parties to the proceeding but
7.35 	who wish to present comments or submit information may do so in
7.36 	the manner determined by the commissioner or the commissioner's
8.1 	designee.  Any person who is not a party shall have no right to
8.2 	examine or cross-examine witnesses.  The commissioner may
8.3 	participate as an active finder of fact in the hearing and may
8.4 	ask questions to elicit information or clarify answers or
8.5 	responses.
8.6 	(3) Notwithstanding section 16A.1283, applicants who are a
8.7 	party to the hearing shall pay the cost of the hearing, as
8.8 	determined by the commissioner.  The cost of the hearing shall
8.9 	be divided equally among the applicants.  Money received by the
8.10 	commissioner under this clause is appropriated to the
8.11 	commissioner for the purpose of administering this paragraph.
8.12 	(4) The commissioner shall issue an order approving an
8.13 	application under paragraph (b), clause (19), within 90 days
8.14 	following the closing of the record of the hearing as determined
8.15 	by the hearing officer.  The hearing officer must close the
8.16 	record by November 15.  The commissioner's order shall include a
8.17 	statement of the reasons the application best meets the criteria
8.18 	of this paragraph.  Prior to making a determination approving an
8.19 	application under paragraph (b), clause (19), the commissioner
8.20 	shall, through a process announced by the commissioner, accept
8.21 	comments from members of the public in the service area for the
8.22 	new hospital specified in paragraph (b), clause (19).  The
8.23 	commissioner shall take this information into consideration in
8.24 	making the determination.  The commissioner must also consider
8.25 	the input and preferences of legislators and local elected
8.26 	officials who represent the service area regarding the selection
8.27 	of the hospital provider specified in paragraph (b), clause (19).
8.28 	(5) Any applicant aggrieved by the commissioner's order is
8.29 	entitled to judicial review by the Court of Appeals according to
8.30 	sections 14.63 to 14.69.  Review by the Court of Appeals must be
8.31 	based on the administrative record and expedited.