1.1 	A bill for an act
1.2 	relating to health; adding a project to the hospital construction moratorium 
1.3 	exception; changing provisions for the plan required for an exception to the hospital 
1.4 	construction moratorium;amending Minnesota Statutes 2016, section 144.552; 
1.5 	Minnesota Statutes 2017 Supplement, section 144.551, subdivision 1.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2017 Supplement, section 144.551, subdivision 1, is amended 
1.8 	to read:
1.9 		Subdivision 1.Restricted construction or modification. (a) The following construction 
1.10 	or modification may not be commenced:
1.11 	(1) any erection, building, alteration, reconstruction, modernization, improvement, 
1.12 	extension, lease, or other acquisition by or on behalf of a hospital that increases the bed 
1.13 	capacity of a hospital, relocates hospital beds from one physical facility, complex, or site 
1.14 	to another, or otherwise results in an increase or redistribution of hospital beds within the 
1.15 	state; and
1.16 	(2) the establishment of a new hospital.
1.17 	(b) This section does not apply to:
1.18 	(1) construction or relocation within a county by a hospital, clinic, or other health care 
1.19 	facility that is a national referral center engaged in substantial programs of patient care, 
1.20 	medical research, and medical education meeting state and national needs that receives more 
1.21 	than 40 percent of its patients from outside the state of Minnesota;
2.1 	(2) a project for construction or modification for which a health care facility held an 
2.2 	approved certificate of need on May 1, 1984, regardless of the date of expiration of the 
2.3 	certificate;
2.4 	(3) a project for which a certificate of need was denied before July 1, 1990, if a timely 
2.5 	appeal results in an order reversing the denial;
2.6 	(4) a project exempted from certificate of need requirements by Laws 1981, chapter 200, 
2.7 	section 2;
2.8 	(5) a project involving consolidation of pediatric specialty hospital services within the 
2.9 	Minneapolis-St. Paul metropolitan area that would not result in a net increase in the number 
2.10 	of pediatric specialty hospital beds among the hospitals being consolidated;
2.11 	(6) a project involving the temporary relocation of pediatric-orthopedic hospital beds to 
2.12 	an existing licensed hospital that will allow for the reconstruction of a new philanthropic, 
2.13 	pediatric-orthopedic hospital on an existing site and that will not result in a net increase in 
2.14 	the number of hospital beds. Upon completion of the reconstruction, the licenses of both 
2.15 	hospitals must be reinstated at the capacity that existed on each site before the relocation;
2.16 	(7) the relocation or redistribution of hospital beds within a hospital building or 
2.17 	identifiable complex of buildings provided the relocation or redistribution does not result 
2.18 	in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds from 
2.19 	one physical site or complex to another; or (iii) redistribution of hospital beds within the 
2.20 	state or a region of the state;
2.21 	(8) relocation or redistribution of hospital beds within a hospital corporate system that 
2.22 	involves the transfer of beds from a closed facility site or complex to an existing site or 
2.23 	complex provided that: (i) no more than 50 percent of the capacity of the closed facility is 
2.24 	transferred; (ii) the capacity of the site or complex to which the beds are transferred does 
2.25 	not increase by more than 50 percent; (iii) the beds are not transferred outside of a federal 
2.26 	health systems agency boundary in place on July 1, 1983; and (iv) the relocation or 
2.27 	redistribution does not involve the construction of a new hospital building;
2.28 	(9) a construction project involving up to 35 new beds in a psychiatric hospital in Rice 
2.29 	County that primarily serves adolescents and that receives more than 70 percent of its 
2.30 	patients from outside the state of Minnesota;
2.31 	(10) a project to replace a hospital or hospitals with a combined licensed capacity of 
2.32 	130 beds or less if: (i) the new hospital site is located within five miles of the current site; 
2.33 	and (ii) the total licensed capacity of the replacement hospital, either at the time of 
3.1 	construction of the initial building or as the result of future expansion, will not exceed 70 
3.2 	licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is less;
3.3 	(11) the relocation of licensed hospital beds from an existing state facility operated by 
3.4 	the commissioner of human services to a new or existing facility, building, or complex 
3.5 	operated by the commissioner of human services; from one regional treatment center site 
3.6 	to another; or from one building or site to a new or existing building or site on the same 
3.7 	campus;
3.8 	(12) the construction or relocation of hospital beds operated by a hospital having a 
3.9 	statutory obligation to provide hospital and medical services for the indigent that does not 
3.10 	result in a net increase in the number of hospital beds, notwithstanding section 144.552, 27 
3.11 	beds, of which 12 serve mental health needs, may be transferred from Hennepin County 
3.12 	Medical Center to Regions Hospital under this clause;
3.13 	(13) a construction project involving the addition of up to 31 new beds in an existing 
3.14 	nonfederal hospital in Beltrami County;
3.15 	(14) a construction project involving the addition of up to eight new beds in an existing 
3.16 	nonfederal hospital in Otter Tail County with 100 licensed acute care beds;
3.17 	(15) a construction project involving the addition of 20 new hospital beds used for 
3.18 	rehabilitation services in an existing hospital in Carver County serving the southwest 
3.19 	suburban metropolitan area. Beds constructed under this clause shall not be eligible for 
3.20 	reimbursement under medical assistance or MinnesotaCare;
3.21 	(16) a project for the construction or relocation of up to 20 hospital beds for the operation 
3.22 	of up to two psychiatric facilities or units for children provided that the operation of the 
3.23 	facilities or units have received the approval of the commissioner of human services;
3.24 	(17) a project involving the addition of 14 new hospital beds to be used for rehabilitation 
3.25 	services in an existing hospital in Itasca County;
3.26 	(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin County 
3.27 	that closed 20 rehabilitation beds in 2002, provided that the beds are used only for 
3.28 	rehabilitation in the hospital's current rehabilitation building. If the beds are used for another 
3.29 	purpose or moved to another location, the hospital's licensed capacity is reduced by 20 beds;
3.30 	(19) a critical access hospital established under section 144.1483, clause (9), and section 
3.31 	1820 of the federal Social Security Act, United States Code, title 42, section 1395i-4, that 
3.32 	delicensed beds since enactment of the Balanced Budget Act of 1997, Public Law 105-33, 
4.1 	to the extent that the critical access hospital does not seek to exceed the maximum number 
4.2 	of beds permitted such hospital under federal law;
4.3 	(20) notwithstanding section 144.552, a project for the construction of a new hospital 
4.4 	in the city of Maple Grove with a licensed capacity of up to 300 beds provided that:
4.5 	(i) the project, including each hospital or health system that will own or control the entity 
4.6 	that will hold the new hospital license, is approved by a resolution of the Maple Grove City 
4.7 	Council as of March 1, 2006;
4.8 	(ii) the entity that will hold the new hospital license will be owned or controlled by one 
4.9 	or more not-for-profit hospitals or health systems that have previously submitted a plan or 
4.10 	plans for a project in Maple Grove as required under section 144.552, and the plan or plans 
4.11 	have been found to be in the public interest by the commissioner of health as of April 1, 
4.12 	2005;
4.13 	(iii) the new hospital's initial inpatient services must include, but are not limited to, 
4.14 	medical and surgical services, obstetrical and gynecological services, intensive care services, 
4.15 	orthopedic services, pediatric services, noninvasive cardiac diagnostics, behavioral health 
4.16 	services, and emergency room services;
4.17 	(iv) the new hospital:
4.18 	(A) will have the ability to provide and staff sufficient new beds to meet the growing 
4.19 	needs of the Maple Grove service area and the surrounding communities currently being 
4.20 	served by the hospital or health system that will own or control the entity that will hold the 
4.21 	new hospital license;
4.22 	(B) will provide uncompensated care;
4.23 	(C) will provide mental health services, including inpatient beds;
4.24 	(D) will be a site for workforce development for a broad spectrum of health-care-related 
4.25 	occupations and have a commitment to providing clinical training programs for physicians 
4.26 	and other health care providers;
4.27 	(E) will demonstrate a commitment to quality care and patient safety;
4.28 	(F) will have an electronic medical records system, including physician order entry;
4.29 	(G) will provide a broad range of senior services;
4.30 	(H) will provide emergency medical services that will coordinate care with regional 
4.31 	providers of trauma services and licensed emergency ambulance services in order to enhance 
4.32 	the continuity of care for emergency medical patients; and
5.1 	(I) will be completed by December 31, 2009, unless delayed by circumstances beyond 
5.2 	the control of the entity holding the new hospital license; and
5.3 	(v) as of 30 days following submission of a written plan, the commissioner of health 
5.4 	has not determined that the hospitals or health systems that will own or control the entity 
5.5 	that will hold the new hospital license are unable to meet the criteria of this clause;
5.6 	(21) a project approved under section 144.553;
5.7 	(22) a project for the construction of a hospital with up to 25 beds in Cass County within 
5.8 	a 20-mile radius of the state Ah-Gwah-Ching facility, provided the hospital's license holder 
5.9 	is approved by the Cass County Board;
5.10 	(23) a project for an acute care hospital in Fergus Falls that will increase the bed capacity 
5.11 	from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 and closing 
5.12 	a separately licensed 13-bed skilled nursing facility;
5.13 	(24) notwithstanding section 144.552, a project for the construction and expansion of a 
5.14 	specialty psychiatric hospital in Hennepin County for up to 50 beds, exclusively for patients 
5.15 	who are under 21 years of age on the date of admission. The commissioner conducted a 
5.16 	public interest review of the mental health needs of Minnesota and the Twin Cities 
5.17 	metropolitan area in 2008. No further public interest review shall be conducted for the 
5.18 	construction or expansion project under this clause;
5.19 	(25) a project for a 16-bed psychiatric hospital in the city of Thief River Falls, if the 
5.20 	commissioner finds the project is in the public interest after the public interest review 
5.21 	conducted under section 144.552 is complete;
5.22 	(26)(i) a project for a 20-bed psychiatric hospital, within an existing facility in the city 
5.23 	of Maple Grove, exclusively for patients who are under 21 years of age on the date of 
5.24 	admission, if the commissioner finds the project is in the public interest after the public 
5.25 	interest review conducted under section 144.552 is complete;
5.26 	(ii) this project shall serve patients in the continuing care benefit program under section 
5.27 	256.9693. The project may also serve patients not in the continuing care benefit program; 
5.28 	and
5.29 	(iii) if the project ceases to participate in the continuing care benefit program, the 
5.30 	commissioner must complete a subsequent public interest review under section 144.552. If 
5.31 	the project is found not to be in the public interest, the license must be terminated six months 
5.32 	from the date of that finding. If the commissioner of human services terminates the contract 
5.33 	without cause or reduces per diem payment rates for patients under the continuing care 
6.1 	benefit program below the rates in effect for services provided on December 31, 2015, the 
6.2 	project may cease to participate in the continuing care benefit program and continue to 
6.3 	operate without a subsequent public interest review; or
6.4 	(27) a project involving the addition of 21 new beds in an existing psychiatric hospital 
6.5 	in Hennepin County that is exclusively for patients who are under 21 years of age on the 
6.6 	date of admission.; or
6.7 	(28) a project to add 76 licensed beds in two phases in an existing safety net, level I 
6.8 	trauma center hospital in Ramsey County, as designated under section 383A.91, subdivision 
6.9 	5. The first phase shall add 52 licensed beds, of which 20 licensed beds are to be used for 
6.10 	inpatient mental health services and 32 licensed beds are to be used for other services. 
6.11 	Within six months after the 20 beds for inpatient mental health services authorized under 
6.12 	phase one are operational to serve patients, the commissioner shall authorize the addition 
6.13 	of the remaining 24 licensed beds under phase two.

6.14 	Sec. 2. Minnesota Statutes 2016, section 144.552, is amended to read:
6.15 	144.552 PUBLIC INTEREST REVIEW.
6.16 	(a) The following entities must submit a plan to the commissioner:
6.17 	(1) a hospital seeking to increase its number of licensed beds; or
6.18 	(2) an organization seeking to obtain a hospital license and notified by the commissioner 
6.19 	under section 144.553, subdivision 1, paragraph (c), that it is subject to this section.
6.20 	The plan must include information that includes an explanation of how the expansion will 
6.21 	meet the public's interest. When submitting a plan to the commissioner, an applicant shall 
6.22 	pay the commissioner for the commissioner's cost of reviewing and monitoring the plan, 
6.23 	as determined by the commissioner and notwithstanding section 16A.1283. Money received 
6.24 	by the commissioner under this section is appropriated to the commissioner for the purpose 
6.25 	of administering this section. For a hospital that is seeking an exception to the moratorium 
6.26 	under section 144.551, the plan must be submitted to the commissioner no later than August 
6.27 	1 of the calendar year prior to the year when the exception will be considered by the 
6.28 	legislature.
6.29 	(b) Plans submitted under this section shall include detailed information necessary for 
6.30 	the commissioner to review the plan and reach a finding. The commissioner may request 
6.31 	additional information from the hospital submitting a plan under this section and from others 
6.32 	affected by the plan that the commissioner deems necessary to review the plan and make a 
6.33 	finding. If the commissioner determines that additional information is required from the 
7.1 	hospital submitting a plan under this section, the commissioner shall notify the hospital of 
7.2 	the additional information required no more than 30 days after the initial submission of the 
7.3 	plan.
7.4 	(c) The commissioner shall review the plan and, within 90 days, but no more than six 
7.5 	months if extenuating circumstances apply, issue a finding on whether the plan is in the 
7.6 	public interest. In making the recommendation, the commissioner shall consider issues 
7.7 	including but not limited to:
7.8 	(1) whether the new hospital or hospital beds are needed to provide timely access to care 
7.9 	or access to new or improved services;
7.10 	(2) the financial impact of the new hospital or hospital beds on existing acute-care 
7.11 	hospitals that have emergency departments in the region;
7.12 	(3) how the new hospital or hospital beds will affect the ability of existing hospitals in 
7.13 	the region to maintain existing staff;
7.14 	(4) the extent to which the new hospital or hospital beds will provide services to 
7.15 	nonpaying or low-income patients relative to the level of services provided to these groups 
7.16 	by existing hospitals in the region; and
7.17 	(5) the views of affected parties.
7.18 	(d) If the plan is being submitted by an existing hospital seeking authority to construct 
7.19 	a new hospital, the commissioner shall also consider:
7.20 	(1) the ability of the applicant to maintain the applicant's current level of community 
7.21 	benefit as defined in section 144.699, subdivision 5, at the existing facility; and
7.22 	(2) the impact on the workforce at the existing facility including the applicant's plan for:
7.23 	(i) transitioning current workers to the new facility;
7.24 	(ii) retraining and employment security for current workers; and
7.25 	(iii) addressing the impact of layoffs at the existing facility on affected workers.
7.26 	(e) Prior to making a recommendation, the commissioner shall conduct a public hearing 
7.27 	in the affected hospital service area to take testimony from interested persons.
7.28 	(f) Upon making a recommendation under paragraph (c), the commissioner shall provide 
7.29 	a copy of the recommendation to the chairs of the house of representatives and senate 
7.30 	committees having jurisdiction over health and human services policy and finance.
8.1 	(g) If an exception to the moratorium is approved under section 144.551 after a review 
8.2 	under this section, the commissioner shall monitor the implementation of the exception up 
8.3 	to completion of the construction project. Thirty days after completion of the construction 
8.4 	project, the hospital shall submit to the commissioner a report on how the construction has 
8.5 	met the provisions of the plan originally submitted under the public interest review process 
8.6 	or a plan submitted pursuant to section 144.551, subdivision 1, paragraph (b), clause (20).