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    Subdivision 1. Letter of intent; publication; acceptance of additional proposals. (a) An
organization seeking to obtain a hospital license must submit a letter of intent to the commissioner,
specifying the community in which the proposed hospital would be located and the number of
beds proposed for the new hospital. When multiple letters of intent are received, the commissioner
shall determine whether they constitute requests for separate projects or are competing proposals
to serve the same or a similar service area.
(b) Upon receipt of a letter under paragraph (a), the commissioner shall publish a notice in
the State Register that includes the information received from the organization under paragraph
(a). The notice must state that another organization interested in seeking a hospital license to serve
the same or a similar service area must notify the commissioner within 30 days.
(c) If no responses are received from additional organizations under paragraph (b), the
commissioner shall notify the entity seeking a license that it is required to submit a plan under
section 144.552 and shall notify the chairs of the house of representatives and senate committees
having jurisdiction over health and human services policy and finance that the project is subject to
sections 144.551 and 144.552.
    Subd. 2. Needs assessment. (a) If one or more responses are received by the commissioner
under subdivision 1, paragraph (b), the commissioner shall complete within 90 days a needs
assessment to determine if a new hospital is needed in the proposed service area.
(b) The organizations that have filed or responded to a letter of intent under subdivision 1
shall provide to the commissioner within 30 days of a request from the commissioner a statement
justifying the need for a new hospital in the service area and sufficient information, as determined
by the commissioner, to allow the commissioner to determine the need for a new hospital. The
information may include, but is not limited to, a demographic analysis of the proposed service
area, the number of proposed beds, the types of hospital services to be provided, and distances
and travel times to existing hospitals currently providing services in the service area.
(c) The commissioner shall make a determination of need for the new hospital. If the
commissioner determines that a new hospital in the service area is not justified, the commissioner
shall notify the applicants in writing, stating the reasons for the decision.
    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) If the plan is being submitted by an existing hospital, the commissioner shall also
    (1) the ability of the applicant to maintain the applicant's current level of community benefit
as defined in section 144.699, subdivision 5, at the existing facility; and
    (2) the impact on the workforce at the existing facility including the applicant's plan for:
    (i) transitioning current workers to the new facility;
    (ii) retraining and employment security for current workers; and
    (iii) addressing the impact of layoffs at the existing facility on affected workers.
    (d) The commissioner shall publish the criteria determined under paragraphs (b) and (c) 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.
    (e) For 60 days after the publication under paragraph (d), 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 paragraphs (b) and (c). 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
    (f) The commissioner shall determine within 90 days of the deadline for applications under
paragraph (e), 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.
    (g) 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 shall appoint an advisory committee, including legislators
and local elected officials who represent the service area and outside experts to assist in the
recommendation process. The legislative appointees shall include, at a minimum, the chairs of
the senate and house of representatives committees with jurisdiction over health care policy. 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.
    (h) Within 30 days following the determination under paragraph (f), the commissioner shall
recommend the selected proposal to the legislature.
    (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 up to completion
of the construction project. Thirty days after completion of the construction project, 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 or a plan submitted pursuant
to section 144.551, subdivision 1, paragraph (b), clause (20).
    Subd. 4. Payment of commissioner's expenses. Notwithstanding section 16A.1283,
applicants who are a party at any stage of the administrative process established in this section
shall pay the cost of that stage of the process, as determined by the commissioner. The cost of
the needs assessment, criteria development, and hearing shall be divided equally among the
applicants. Money received by the commissioner under this subdivision is appropriated to the
commissioner for the purpose of administering this section.
History: 2006 c 249 s 3; 2007 c 147 art 9 s 15
NOTE: This section as added by Laws 2006, chapter 249, section 3, expires January 1, 2009.
Laws 2006, chapter 249, section 6.

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Revisor of Statutes