SF 967

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; modifying the hospital public interest review; modifying the
alternative approval process; requiring an annual report; amending Minnesota
Statutes 2006, sections 144.50, by adding subdivisions; 144.552; 144.553,
subdivision 3; 144.699, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, section 144.50, is amended by adding a
subdivision to read:

new text begin Subd. 1a. new text end

new text begin Community benefit. new text end

new text begin "Community benefit" means the costs of community
care, underpayment for services provided under state health care programs, research costs,
community health services costs, financial and in-kind contributions, costs of community
building activities, costs of community benefit operations, education costs, and the cost
of operating subsidized services. The cost of bad debts and underpayment for Medicare
services are not included in the calculation of community benefit.
new text end

Sec. 2.

Minnesota Statutes 2006, section 144.50, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Community care. new text end

new text begin "Community care" means the costs for medical care
that a hospital has determined is charity care as defined under Minnesota Rules, part
4650.0115, or for which the hospital determines after billing for the services that there is a
demonstrated inability to pay. Any costs forgiven under a hospital's community care plan
or under section 62J.83 may be counted in the hospital's calculation of community care.
Bad debt expenses and discounted charges available to the uninsured shall not be included
in the calculation of community care. The amount of community care is the value of costs
incurred and not the charges made for services.
new text end

Sec. 3.

Minnesota Statutes 2006, section 144.552, is amended to read:

144.552 PUBLIC INTEREST REVIEW.

(a) The following entities must submit a plan to the commissioner:

(1) a hospital seeking to increase its number of licensed beds; or

(2) an organization seeking to obtain a hospital license and notified by the
commissioner under section 144.553, subdivision 1, paragraph (c), that it is subject
to this section.

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 new text begin and monitoring new text end 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, but no more than
six months if extenuating circumstances apply, 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.

new text begin (d) If the plan is being submitted by an existing hospital seeking authority to
construct a new hospital, the commissioner shall also consider:
new text end

new text begin (1) the ability of the applicant to maintain the applicant's current level of community
benefit at the existing facility;
new text end

new text begin (2) the impact on the workforce at the existing facility; and
new text end

new text begin (3) the commitment of the applicant to provide to the existing workforce the right
of first refusal for jobs the existing workforce is qualified for at the new facility, the
applicant's commitment to retraining and employment security for the existing workforce,
and, in the case of layoffs at the existing facility, the applicant's commitment to severance
and other measures to minimize the loss to these workers.
new text end

new text begin (e) new text end Prior to making a recommendation, the commissioner shall conduct a public
hearing in the affected hospital service area to take testimony from interested persons.

deleted text begin (d) deleted text end new text begin (f) new text end 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.

new text begin (g) If an exception to the moratorium is approved under section 144.551 after a
review under this section, the commissioner shall monitor the implementation of the
exception until completion of the construction project to ensure that the project continues
to be in the public interest. If the commissioner determines that the project does not
reflect the details of the plan submitted under this section, the commissioner may refuse
to grant the license for the project approved under section 144.551. Upon completion of
the construction project and before the final license approval is granted, the hospital shall
submit to the commissioner a report on how the construction has met the provisions of the
plan originally submitted under the public interest review process.
new text end

Sec. 4.

Minnesota Statutes 2006, section 144.553, subdivision 3, is amended to read:

Subd. 3.

Process when hospital need is determined.

(a) If the commissioner
determines that a new hospital is needed in the proposed service area, the commissioner
shall notify the applicants of that finding and shall select the applicant determined under
the process established in this subdivision to be best able to provide services consistent
with the review criteria established in this subdivision.

(b) The commissioner shall:

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

(i) access to care;

(ii) quality of care;

(iii) cost of care; and

(iv) overall project feasibility;

(2) establish additional criteria at the commissioner's discretion. In establishing the
criteria, the commissioner shall consider the need for:

(i) mental health services in the service area, including both inpatient and outpatient
services for adults, adolescents, and children;

(ii) a significant commitment to providing uncompensated care, including discounts
for uninsured patients and coordination with other providers of care to low-income
uninsured persons; and

(iii) coordination with other hospitals so that specialized services are not
unnecessarily duplicated and are provided in sufficient volume to ensure the maintenance
of high-quality care; and

(3) define a service area for the proposed hospital. The service area shall consist of:

(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

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

(c) new text begin If the plan is being submitted by an existing hospital, the commissioner shall
also consider:
new text end

new text begin (1) the ability of the applicant to maintain the applicant's current level of community
benefit at the existing facility;
new text end

new text begin (2) the impact on the workforce at the existing facility; and
new text end

new text begin (3) the commitment of the applicant to provide to the existing workforce the right
of first refusal for jobs the existing workforce is qualified for at the new facility, the
applicant's commitment to retraining and employment security for the existing workforce,
and, in the case of layoffs at the existing facility, the applicant's commitment to severance
and other measures to minimize the loss to these workers.
new text end

new text begin (d) new text end The commissioner shall publish the criteria determined under deleted text begin paragraph deleted text end new text begin
paragraphs new text end (b) new text begin and (c) new text end in the State Register within 60 days of the determination under
subdivision 2. 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.

deleted text begin (d) deleted text end new text begin (e) new text end For 60 days after the publication under paragraph deleted text begin (c) deleted text end new text begin (d) new text end , the commissioner
shall accept proposals to construct a hospital from organizations that have submitted a
letter of intent under subdivision 1, paragraph (a), or have notified the commissioner under
subdivision 1, paragraph (b). The proposal must include a plan for the new hospital and
evidence of compliance with the criteria specified under deleted text begin paragraph deleted text end new text begin paragraphs new text end (b) new text begin and (c) new text end .
Once submitted, the proposal may not be revised except:

(1) to submit corrections of material facts; or

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

deleted text begin (e) deleted text end new text begin (f) new text end The commissioner shall determine within 90 days of the deadline for
applications under paragraph deleted text begin (d) deleted text end new text begin (e) new text end , 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.

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.

deleted text begin (f) deleted text end new text begin (g) new text end Prior to making a determination selecting an application, the commissioner
shall hold a public hearing in the proposed hospital service area to accept comments from
members of the public. The commissioner shall take this information into consideration in
making the determination. The commissioner deleted text begin may deleted text end new text begin shall new text end appoint an advisory committee,
including legislators and local elected officials who represent the service area and outside
experts to assist in the recommendation process. new text begin The legislative appointees shall include,
at a minimum, the chairs of the senate and house of representatives committees with
jurisdiction over health care policy. new text end 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 selected
application best meets the published criteria.

deleted text begin (g) deleted text end new text begin (h) new text end Within 30 days following the determination under paragraph deleted text begin (e) deleted text end new text begin (f) new text end , the
commissioner shall recommend the selected proposal to the legislature.

new text begin (i) If an exception to the moratorium is approved under section 144.551 after a
review under this section, the commissioner shall monitor the implementation of the
exception until completion of the construction project to ensure that the project continues
to be in the public interest. If the commissioner determines that the project does not
reflect the details of the plan submitted under this section, the commissioner may refuse
to grant the license for the project approved under section 144.551. Upon completion of
the construction project and before the final license approval is granted, the hospital shall
submit to the commissioner a report on how the construction has met the provisions of the
plan originally submitted under the alternative approval process.
new text end

Sec. 5.

Minnesota Statutes 2006, section 144.699, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Annual reports on community benefit, community care amounts, and
state program underfunding. new text end

new text begin For each hospital reporting health care cost information
under section 144.698 or 144.702, the commissioner shall report annually on the hospital's
community benefit, community care, and underpayment for state public health care
programs. For purposes of this subdivision, underpayment for services provided by state
public health care programs is the difference between hospital costs and public program
payments. The information shall be reported in terms of total dollars and as a percentage
of total operating costs for each hospital.
new text end