HF 3340

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; establishing a process to evaluate certain hospital
construction proposals; amending Minnesota Statutes 2004, section 144.552;
Minnesota Statutes 2005 Supplement, section 144.551, subdivision 1; proposing
coding for new law in Minnesota Statutes, chapter 144.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2005 Supplement, section 144.551, subdivision 1,
is amended to read:

Subdivision 1.

Restricted construction or modification.

(a) The following
construction or modification may not be commenced:

(1) any erection, building, alteration, reconstruction, modernization, improvement,
extension, lease, or other acquisition by or on behalf of a hospital that increases the bed
capacity of a hospital, relocates hospital beds from one physical facility, complex, or site
to another, or otherwise results in an increase or redistribution of hospital beds within
the state; and

(2) the establishment of a new hospital.

(b) This section does not apply to:

(1) construction or relocation within a county by a hospital, clinic, or other health
care facility that is a national referral center engaged in substantial programs of patient
care, medical research, and medical education meeting state and national needs that
receives more than 40 percent of its patients from outside the state of Minnesota;

(2) a project for construction or modification for which a health care facility held
an approved certificate of need on May 1, 1984, regardless of the date of expiration of
the certificate;

(3) a project for which a certificate of need was denied before July 1, 1990, if a
timely appeal results in an order reversing the denial;

(4) a project exempted from certificate of need requirements by Laws 1981, chapter
200, section 2;

(5) a project involving consolidation of pediatric specialty hospital services within
the Minneapolis-St. Paul metropolitan area that would not result in a net increase in the
number of pediatric specialty hospital beds among the hospitals being consolidated;

(6) a project involving the temporary relocation of pediatric-orthopedic hospital
beds to an existing licensed hospital that will allow for the reconstruction of a new
philanthropic, pediatric-orthopedic hospital on an existing site and that will not result in a
net increase in the number of hospital beds. Upon completion of the reconstruction,
the licenses of both hospitals must be reinstated at the capacity that existed on each site
before the relocation;

(7) the relocation or redistribution of hospital beds within a hospital building or
identifiable complex of buildings provided the relocation or redistribution does not result
in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds
from one physical site or complex to another; or (iii) redistribution of hospital beds within
the state or a region of the state;

(8) relocation or redistribution of hospital beds within a hospital corporate system
that involves the transfer of beds from a closed facility site or complex to an existing site
or complex provided that: (i) no more than 50 percent of the capacity of the closed facility
is transferred; (ii) the capacity of the site or complex to which the beds are transferred
does not increase by more than 50 percent; (iii) the beds are not transferred outside of a
federal health systems agency boundary in place on July 1, 1983; and (iv) the relocation or
redistribution does not involve the construction of a new hospital building;

(9) a construction project involving up to 35 new beds in a psychiatric hospital in
Rice County that primarily serves adolescents and that receives more than 70 percent of its
patients from outside the state of Minnesota;

(10) a project to replace a hospital or hospitals with a combined licensed capacity
of 130 beds or less if: (i) the new hospital site is located within five miles of the current
site; and (ii) the total licensed capacity of the replacement hospital, either at the time of
construction of the initial building or as the result of future expansion, will not exceed 70
licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is
less;

(11) the relocation of licensed hospital beds from an existing state facility operated
by the commissioner of human services to a new or existing facility, building, or complex
operated by the commissioner of human services; from one regional treatment center
site to another; or from one building or site to a new or existing building or site on the
same campus;

(12) the construction or relocation of hospital beds operated by a hospital having a
statutory obligation to provide hospital and medical services for the indigent that does not
result in a net increase in the number of hospital beds, notwithstanding section 144.552, 27
beds, of which 12 serve mental health needs, may be transferred from Hennepin County
Medical Center to Regions Hospital under this clause;

(13) a construction project involving the addition of up to 31 new beds in an existing
nonfederal hospital in Beltrami County;

(14) a construction project involving the addition of up to eight new beds in an
existing nonfederal hospital in Otter Tail County with 100 licensed acute care beds;

(15) a construction project involving the addition of 20 new hospital beds
used for rehabilitation services in an existing hospital in Carver County serving the
southwest suburban metropolitan area. Beds constructed under this clause shall not be
eligible for reimbursement under medical assistance, general assistance medical care,
or MinnesotaCare;

(16) a project for the construction or relocation of up to 20 hospital beds for the
operation of up to two psychiatric facilities or units for children provided that the operation
of the facilities or units have received the approval of the commissioner of human services;

(17) a project involving the addition of 14 new hospital beds to be used for
rehabilitation services in an existing hospital in Itasca County;

(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin
County that closed 20 rehabilitation beds in 2002, provided that the beds are used only
for rehabilitation in the hospital's current rehabilitation building. If the beds are used for
another purpose or moved to another location, the hospital's licensed capacity is reduced
by 20 beds; deleted text begin or
deleted text end

(19) a critical access hospital established under section 144.1483, clause (9), and
section 1820 of the federal Social Security Act, United States Code, title 42, section
1395i-4, that delicensed beds since enactment of the Balanced Budget Act of 1997, Public
Law 105-33, to the extent that the critical access hospital does not seek to exceed the
maximum number of beds permitted such hospital under federal law new text begin ; or
new text end

new text begin (20) a project approved under section 144.553 new text end .

Sec. 2.

Minnesota Statutes 2004, section 144.552, is amended to read:

144.552 PUBLIC INTEREST REVIEW.

(a) A hospital seeking to increase its number of licensed beds or an organization
seeking to obtain a hospital license must submit a plan to the commissioner of health. The
plan must include information that includes an explanation of how the expansion will
meet the public's interest. When submitting a plan to the commissioner, an applicant shall
pay the commissioner for the commissioner's cost of reviewing the plan, as determined
by the commissioner and notwithstanding section 16A.1283. Money received by the
commissioner under this section is appropriated to the commissioner for the purpose of
administering this section.

(b) Plans submitted under this section shall include detailed information necessary
for the commissioner to review the plan and reach a finding. The commissioner may
request additional information from the hospital submitting a plan under this section and
from others affected by the plan that the commissioner deems necessary to review the
plan and make a finding.

(c) The commissioner shall review the plan and, within 90 days, deleted text begin but no more than
six months if extenuating circumstances apply, deleted text end issue a finding on whether the plan is in
the public interest. In making the recommendation, the commissioner shall consider
issues including but not limited to:

(1) whether the new hospital or hospital beds are needed to provide timely access to
care or access to new or improved services;

(2) the financial impact of the new hospital or hospital beds on existing acute-care
hospitals that have emergency departments in the region;

(3) how the new hospital or hospital beds will affect the ability of existing hospitals
in the region to maintain existing staff;

(4) the extent to which the new hospital or hospital beds will provide services to
nonpaying or low-income patients relative to the level of services provided to these groups
by existing hospitals in the region; and

(5) the views of affected parties.

(d) Upon making a recommendation under paragraph (c), the commissioner shall
provide a copy of the recommendation to the chairs of the house and senate committees
having jurisdiction over health and human services policy and finance.

Sec. 3.

new text begin [144.553] ALTERNATIVE APPROVAL PROCESS FOR NEW
HOSPITAL CONSTRUCTION.
new text end

new text begin new text end

new text begin Subdivision 1. new text end

new text begin Notice; request for proposals. new text end

new text begin (a) Immediately upon the completion
of a review under section 144.552 of a project involving the issuance of a hospital license,
if the commissioner determines that the plan submitted under that section is in the public
interest, the commissioner shall publish in the State Register a notice of that finding and
a request for applications from any other entities interested in constructing a hospital in
response to that finding.
new text end

new text begin (b) The commissioner shall accept applications for 30 days from the date the notice
is published. If no other applications are received, the commissioner shall notify the chairs
of the house of representatives and senate committees having jurisdiction over health and
human services policy and finance that no project has been approved under this section
and that section 144.551 applies to the construction of a hospital in this instance.
new text end

new text begin (c) If one or more additional entities applies to construct a hospital in response to
the commissioner's request for applications, the commissioner shall select the applicant
determined under the process established in subdivision 2 to be best able to provide
services consistent with the review criteria established in subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Process when multiple applicants seek approval. new text end

new text begin (a) When multiple
applicants seek approval to build a hospital, the commissioner shall:
new text end

new text begin (1) determine market-specific criteria that shall be used to evaluate all proposals.
The criteria must include standards regarding:
new text end

new text begin (i) access to care;
new text end

new text begin (ii) quality of care;
new text end

new text begin (iii) cost of care; and
new text end

new text begin (iv) overall project feasibility;
new text end

new text begin (2) establish additional criteria at the commissioner's discretion. The criteria
determined under this clause shall constitute the sole criteria under which the competing
proposals shall be evaluated; and
new text end

new text begin (3) define a service area for the proposed hospital. In a community that includes an
existing hospital, the service area shall consist of the zip codes in closest proximity to the
existing hospital that make up 80 percent of that hospital's admissions. In a community
that does not include an existing hospital, the service area shall consist of:
new text end

new text begin (i) in the 11-county metropolitan area, in St. Cloud, and in Duluth, the zip codes
located within a 20-mile radius of the proposed new hospital location; and
new text end

new text begin (ii) in the remainder of the state, the zip codes within a 30-mile radius of the
proposed new hospital location.
new text end

new text begin (b) The commissioner shall publish the criteria determined under paragraph (a),
clause (1), in the State Register within 60 days of the deadline for applications under
subdivision 1. Once published, the criteria shall not be modified with respect to the
particular project and applicants to which they apply. The commissioner shall publish with
the criteria guidelines for a proposal and submission review process.
new text end

new text begin (c) For 60 days after the publication under paragraph (b), the commissioner shall
accept proposals to construct a hospital. The proposal must include a plan for the new
hospital and evidence of compliance with the criteria specified under paragraph (a), clause
(1). Once submitted, the proposal may not be revised except:
new text end

new text begin (1) to submit corrections of material facts; or
new text end

new text begin (2) in response to a request from the commissioner to provide clarification or
further information.
new text end

new text begin (d) The commissioner shall determine within 90 days of the deadline for applications
under paragraph (c), which applicant has demonstrated that it is best able to provide
services consistent with the published criteria. The commissioner shall make this
determination by order following a hearing according to this paragraph. The hearing
shall not constitute or be considered to be a contested case hearing under chapter 14 and
shall be conducted solely under the procedures specified in this paragraph. The hearing
shall commence upon at least 30 days' notice to the applicants by the commissioner.
The hearing may be conducted by the commissioner or by a person designated by the
commissioner. The designee may be an administrative law judge. The purpose of the
hearing shall be to receive evidence to assist the commissioner in determining which
applicant has demonstrated that it best meets the published criteria.
new text end

new text begin The parties to the hearing shall consist only of those applicants who have submitted
a completed application. Each applicant shall have the right to be represented by
counsel, to present evidence deemed relevant by the commissioner, and to examine and
cross-examine witnesses. Persons who are not parties to the proceeding but who wish to
present comments or submit information may do so in the manner determined by the
commissioner or the commissioner's designee. Any person who is not a party shall have
no right to examine or cross-examine witnesses. The commissioner may participate as an
active finder of fact in the hearing and may ask questions to elicit information or clarify
answers or responses.
new text end

new text begin Notwithstanding section 16A.1283, applicants who are a party to the hearing shall
pay the cost of the hearing, as determined by the commissioner. The cost of the hearing
shall be divided equally among the applicants. Money received by the commissioner
under this paragraph is appropriated to the commissioner for the purpose of administering
this section.
new text end

new text begin (e) The commissioner shall issue an order selecting an application following
the closing of the record of the hearing as determined by the hearing officer. The
commissioner's order shall include a statement of the reasons the application best meets
the published criteria. Prior to making a determination selecting an application, the
commissioner shall, through a process announced by the commissioner, accept comments
from members of the public in the service area for the new hospital. The commissioner
shall take this information into consideration in making the determination. The
commissioner must also consider the input and preferences of legislators and local elected
officials who represent the service area regarding the selection of the hospital provider.
new text end

new text begin (f) Any applicant aggrieved by the commissioner's order is entitled to judicial
review by the Court of Appeals according to sections 14.63 to 14.69. Review by the Court
of Appeals must be based on the administrative record and expedited.
new text end

new text begin (g) Following the determination under paragraph (d), the commissioner shall
submit the matter to the legislature at its next regular session to be accepted or rejected.
Legislative acceptance of the commissioner's recommendation constitutes approval of the
proposal under section 144.551. Legislative rejection of the recommendation concludes
the process but does not prohibit a new application under this section and section 144.552.
new text end

new text begin Subd. 3. new text end

new text begin Result of legislative failure to act. new text end

new text begin In the event that the legislature neither
accepts nor rejects the recommendation made under subdivision 2, upon the conclusion of
the legislative session, the commissioner may make the commissioner's recommendation
the final approval of the project. The commissioner's decision to grant final approval to
the commissioner's recommendation constitutes approval of the proposal under section
144.551.
new text end