2013 Maryland Code
HEALTH - GENERAL
§ 19-120 - Certificate of need -- Health care facilities

§19-120.

(a) (1) In this section the following words have the meanings indicated.

(2) “Consolidation” and “merger” include increases and decreases in bed capacity or services among the components of an organization that:

(i) Operates more than one health care facility; or

(ii) Operates one or more health care facilities and holds an outstanding certificate of need to construct a health care facility.

(3) (i) “Health care service” means any clinically related patient service.

(ii) “Health care service” includes a medical service.

(4) “Limited service hospital” means a health care facility that:

(i) Is licensed as a hospital on or after January 1, 1999;

(ii) Changes the type of scope of health care services offered by eliminating the facility’s capability to admit or retain patients for overnight hospitalization;

(iii) Retains an emergency or urgent care center; and

(iv) Complies with the regulations adopted by the Secretary under § 19-307.1 of this title.

(5) “Medical service” means:

(i) Any of the following categories of health care services:

1. Medicine, surgery, gynecology, addictions;

2. Obstetrics;

3. Pediatrics;

4. Psychiatry;

5. Rehabilitation;

6. Chronic care;

7. Comprehensive care;

8. Extended care;

9. Intermediate care; or

10. Residential treatment; or

(ii) Any subcategory of the rehabilitation, psychiatry, comprehensive care, or intermediate care categories of health care services for which need is projected in the State health plan.

(b) The Commission may set an application fee for a certificate of need for health care facilities not assessed a user fee under this subtitle.

(c) The Commission shall adopt rules and regulations for applying for and issuing certificates of need.

(d) The Commission may adopt, after October 1, 1983, new thresholds or methods for determining the circumstances or minimum cost requirements under which a certificate of need application must be filed.

(e) (1) A person shall have a certificate of need issued by the Commission before the person develops, operates, or participates in any of the health care projects for which a certificate of need is required under this section.

(2) A certificate of need issued before January 13, 1987, may not be rendered wholly or partially invalid solely because certain conditions have been imposed, if an appeal concerning the certificate of need, challenging the power of the Commission to impose certain conditions on a certificate of need, has not been noted by an aggrieved party before January 13, 1987.

(f) Except as provided in subsection (g)(2)(iii) of this section, a certificate of need is required before a new health care facility is built, developed, or established.

(g) (1) A certificate of need is required before an existing or previously approved, but unbuilt, health care facility is moved to another site.

(2) This subsection does not apply if:

(i) The Commission adopts limits for relocations and the proposed relocation does not exceed those limits;

(ii) The relocation is the result of a partial or complete replacement of an existing hospital or related institution, as defined in § 19-301 of this title, and the relocation is to another part of the site or immediately adjacent to the site of the existing hospital or related institution;

(iii) Subject to the provisions of subsections (i) and (j) of this section, the relocation is of an existing health care facility owned or controlled by a merged asset system and is to:

1. A site within the primary service area of the health care facility to be relocated if:

A. The proposed relocation is not across county boundaries; and

B. At least 45 days prior to the proposed relocation, notice is filed with the Commission;

2. A site outside the primary service area of the health care facility to be relocated but within the primary service area of the merged asset system if:

A. At least 45 days prior to the proposed relocation, notice is filed with the Commission; and

B. The Commission in its sole discretion, and in accordance with the criteria adopted by regulation, finds that the relocation is in the public interest, is not inconsistent with the State health plan, and will result in the more efficient and effective delivery of health care services; or

3. For a limited service hospital, a site within the immediate area as defined in regulation by the Commission; or

(iv) The relocation involves moving a portion of a complement of comprehensive care beds previously approved by the Commission after January 1, 1995, for use in a proposed new related institution, as defined in § 19-301 of this title, but unbuilt on October 1, 1998, if:

1. The comprehensive care beds that were originally approved by the Commission in a prior certificate of need review were approved for use in a proposed new related institution to be located in a municipal corporation within Carroll County in which a related institution is not located;

2. The comprehensive care beds being relocated will be used to establish an additional new related institution that is located in another municipal corporation within Carroll County in which a related institution is not located;

3. The comprehensive care beds not being relocated are intended to be used to establish a related institution on the original site; and

4. Both the previously approved comprehensive care beds for use on the original site and the relocated comprehensive care beds for use on the new site will be used as components of single buildings on each site that also offer independent or assisted living residential units.

(3) Notwithstanding any other provision of this subtitle, a certificate of need is not required for a relocation described under paragraph (2)(iv) of this subsection.

(h) (1) A certificate of need is required before the bed capacity of a health care facility is changed.

(2) This subsection does not apply to any increase or decrease in bed capacity if:

(i) For a health care facility that is not a hospital, during a 2-year period the increase or decrease would not exceed the lesser of 10 percent of the total bed capacity or 10 beds;

(ii) 1. The increase or decrease would change the bed capacity for an existing medical service; and

2. A. The change would not increase total bed capacity;

B. The change is maintained for at least a 1-year period; and

C. At least 45 days prior to the change, the hospital provides written notice to the Commission describing the change and providing an updated inventory of the hospital’s licensed bed complement;

(iii) 1. At least 45 days before increasing or decreasing bed capacity, written notice of intent to change bed capacity is filed with the Commission;

2. The Commission in its sole discretion finds that the proposed change:

A. Is pursuant to the consolidation or merger of two or more health care facilities, or conversion of a health care facility or part of a facility to a nonhealth-related use;

B. Is not inconsistent with the State health plan or the institution-specific plan developed by the Commission;

C. Will result in the delivery of more efficient and effective health care services; and

D. Is in the public interest; and

3. Within 45 days of receiving notice, the Commission notifies the health care facility of its finding; or

(iv) The increase or decrease in bed capacity is the result of the annual licensed bed recalculation provided under § 19-307 of this title.

(i) (1) Except as provided in paragraph (2) of this subsection, for a hospital located in a county with three or more hospitals, a certificate of need is not required before the bed capacity is increased or decreased if the change:

(i) Occurs on or after July 1, 2000;

(ii) Is between hospitals in a merged asset system located within the same health service area;

(iii) Does not involve comprehensive or extended care beds; and

(iv) Does not occur earlier than 45 days after a notice of intent to reallocate bed capacity is filed with the Commission.

(2) A hospital may not create a new health care service through the relocation of beds from one county to another county pursuant to this subsection.

(j) (1) A certificate of need is required before the type or scope of any health care service is changed if the health care service is offered:

(i) By a health care facility;

(ii) In space that is leased from a health care facility; or

(iii) In space that is on land leased from a health care facility.

(2) This subsection does not apply if:

(i) The Commission adopts limits for changes in health care services and the proposed change would not exceed those limits;

(ii) The proposed change and the annual operating revenue that would result from the addition is entirely associated with the use of medical equipment;

(iii) The proposed change would establish, increase, or decrease a health care service and the change would not result in the:

1. Establishment of a new medical service or elimination of an existing medical service;

2. Establishment of a cardiac surgery, organ transplant surgery, or burn or neonatal intensive health care service;

3. Except as provided in § 19-120.1 of this subtitle, establishment of percutaneous coronary intervention services;

4. Establishment of a home health program, hospice program, or freestanding ambulatory surgical center or facility; or

5. Expansion of a comprehensive care, extended care, intermediate care, residential treatment, psychiatry, or rehabilitation medical service, except for an expansion related to an increase in total bed capacity in accordance with subsection (h)(2)(i) of this section; or

(iv) 1. At least 45 days before increasing or decreasing the volume of one or more health care services, written notice of intent to change the volume of health care services is filed with the Commission;

2. The Commission in its sole discretion finds that the proposed change:

A. Is pursuant to the consolidation or merger of two or more health care facilities, the conversion of a health care facility or part of a facility to a nonhealth-related use, or the conversion of a hospital to a limited service hospital;

B. Is not inconsistent with the State health plan or the institution-specific plan developed and adopted by the Commission;

C. Will result in the delivery of more efficient and effective health care services; and

D. Is in the public interest; and

3. Within 45 days of receiving notice under item 1 of this item, the Commission notifies the health care facility of its finding.

(3) Notwithstanding the provisions of paragraph (2) of this subsection, a certificate of need is required:

(i) Before an additional home health agency, branch office, or home health care service is established by an existing health care agency or facility;

(ii) Before an existing home health agency or health care facility establishes a home health agency or home health care service at a location in the service area not included under a previous certificate of need or license;

(iii) Before a transfer of ownership of any branch office of a home health agency or home health care service of an existing health care facility that separates the ownership of the branch office from the home health agency or home health care service of an existing health care facility which established the branch office; or

(iv) Before the expansion of a home health service or program by a health care facility that:

1. Established the home health service or program without a certificate of need between January 1, 1984 and July 1, 1984; and

2. During a 1-year period, the annual operating revenue of the home health service or program would be greater than $333,000 after an annual adjustment for inflation, based on an appropriate index specified by the Commission.

(k) (1) A certificate of need is required before any of the following capital expenditures are made by or on behalf of a hospital:

(i) Any expenditure that, under generally accepted accounting principles, is not properly chargeable as an operating or maintenance expense, if:

1. The expenditure is made as part of an acquisition, improvement, or expansion, and, after adjustment for inflation as provided in the regulations of the Commission, the total expenditure, including the cost of each study, survey, design, plan, working drawing, specification, and other essential activity, is more than $10,000,000;

2. The expenditure is made as part of a replacement of any plant and equipment of the hospital and is more than $10,000,000 after adjustment for inflation as provided in the regulations of the Commission;

3. The expenditure results in a substantial change in the bed capacity of the hospital; or

4. The expenditure results in the establishment of a new medical service in a hospital that would require a certificate of need under subsection (i) of this section; or

(ii) Any expenditure that is made to lease or, by comparable arrangement, obtain any plant or equipment for the hospital, if:

1. The expenditure is made as part of an acquisition, improvement, or expansion, and, after adjustment for inflation as provided in the rules and regulations of the Commission, the total expenditure, including the cost of each study, survey, design, plan, working drawing, specification, and other essential activity, is more than $10,000,000;

2. The expenditure is made as part of a replacement of any plant and equipment and is more than $10,000,000 after adjustment for inflation as provided in the regulations of the Commission;

3. The expenditure results in a substantial change in the bed capacity of the hospital; or

4. The expenditure results in the establishment of a new medical service in a hospital that would require a certificate of need under subsection (i) of this section.

(2) A certificate of need is required before any of the following capital expenditures are made by or on behalf of a health care facility other than a hospital:

(i) Any expenditure that, under generally accepted accounting principles, is not properly chargeable as an operating or maintenance expense, if:

1. The expenditure is made as part of an acquisition, improvement, or expansion, and, after adjustment for inflation as provided in the regulations of the Commission, the total expenditure, including the cost of each study, survey, design, plan, working drawing, specification, and other essential activity, is more than $5,000,000;

2. The expenditure is made as part of a replacement of any plant and equipment of the health care facility other than a hospital and is more than $5,000,000 after adjustment for inflation as provided in the regulations of the Commission;

3. The expenditure results in a substantial change in the bed capacity of the health care facility other than a hospital; or

4. The expenditure results in the establishment of a new medical service in a health care facility other than a hospital that would require a certificate of need under subsection (i) of this section; or

(ii) Any expenditure that is made to lease or, by comparable arrangement, obtain any plant or equipment for the health care facility other than a hospital, if:

1. The expenditure is made as part of an acquisition, improvement, or expansion, and, after adjustment for inflation as provided in the regulations of the Commission, the total expenditure, including the cost of each study, survey, design, plan, working drawing, specification, and other essential activity, is more than $5,000,000;

2. The expenditure is made as part of a replacement of any plant and equipment and is more than $5,000,000 after adjustment for inflation as provided in the regulations of the Commission;

3. The expenditure results in a substantial change in the bed capacity of the health care facility other than a hospital; or

4. The expenditure results in the establishment of a new medical service in a health care facility other than a hospital that would require a certificate of need under subsection (i) of this section.

(3) A certificate of need is required before any equipment or plant is donated to a health care facility, if a certificate of need would be required under paragraph (1) or (2) of this subsection for an expenditure by the health care facility to acquire the equipment or plant directly.

(4) A certificate of need is required before any equipment or plant is transferred to a health care facility at less than fair market value if a certificate of need would be required under paragraph (1) or (2) of this subsection for the transfer at fair market value.

(5) A certificate of need is required before a person acquires a health care facility if a certificate of need would be required under paragraph (1) or (2) of this subsection for the acquisition by or on behalf of the health care facility.

(6) This subsection does not apply to:

(i) Site acquisition;

(ii) Acquisition of a health care facility if, at least 30 days before making the contractual arrangement to acquire the facility, written notice of the intent to make the arrangement is filed with the Commission and the Commission does not find, within 30 days after the Commission receives notice, that the health services or bed capacity of the facility will be changed, provided that, for a merger with or acquisition of an existing general hospice, the purchaser of the general hospice may only acquire the authority to provide home-based hospice services in jurisdictions in which the seller of the general hospice is licensed to provide home-based hospice services;

(iii) Acquisition of business or office equipment that is not directly related to patient care;

(iv) Capital expenditures to the extent that they are directly related to the acquisition and installation of major medical equipment;

(v) A capital expenditure made as part of a consolidation or merger of two or more health care facilities, or conversion of a health care facility or part of a facility to a nonhealth-related use if:

1. At least 45 days before an expenditure is made, written notice of intent is filed with the Commission;

2. Within 45 days of receiving notice, the Commission in its sole discretion finds that the proposed consolidation, merger, or conversion:

A. Is not inconsistent with the State health plan or the institution-specific plan developed by the Commission as appropriate;

B. Will result in the delivery of more efficient and effective health care services; and

C. Is in the public interest; and

3. Within 45 days of receiving notice, the Commission notifies the health care facility of its finding;

(vi) A capital expenditure by a nursing home for equipment, construction, or renovation that:

1. Is not directly related to patient care; and

2. Is not directly related to any change in patient charges or other rates;

(vii) A capital expenditure by a hospital, as defined in § 19-301 of this title, for equipment, construction, or renovation that:

1. Is not directly related to patient care; and

2. Does not increase patient charges or hospital rates;

(viii) A capital expenditure by a hospital, as defined in § 19-301 of this title, for a project in excess of $10,000,000 for construction or renovation that:

1. May be related to patient care;

2. Does not require, over the entire period or schedule of debt service associated with the project, a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project as determined by the Commission, after consultation with the Health Services Cost Review Commission;

3. At least 45 days before the proposed expenditure is made, the hospital notifies the Commission;

4. A. Within 45 days of receipt of the relevant financial information, the Commission makes the financial determination required under item 2 of this item; or

B. The Commission has not made the financial determination required under item 2 of this item within 60 days of the receipt of the relevant financial information; and

5. The relevant financial information to be submitted by the hospital is defined in regulations adopted by the Commission, after consultation with the Health Services Cost Review Commission; or

(ix) A plant donated to a hospital, as defined in § 19-301 of this title, that does not require a cumulative increase in patient charges or hospital rates of more than $1,500,000 for capital costs associated with the donated plant as determined by the Commission, after consultation with the Health Services Cost Review Commission, if:

1. At least 45 days before the proposed donation is made, the hospital notifies the Commission;

2. A. Within 45 days of receipt of the relevant financial information, the Commission makes the financial determination required under this item (ix) of this paragraph; or

B. The Commission has not made the financial determination required under this item (ix) of this paragraph within 60 days of the receipt of the relevant financial information; and

3. The relevant financial information to be submitted by the hospital is defined in regulations adopted by the Commission after consultation with the Health Services Cost Review Commission.

(7) Paragraph (6)(vi), (vii), (viii), and (ix) of this subsection may not be construed to permit a facility to offer a new health care service for which a certificate of need is otherwise required.

(8) Subject to the notice requirements of paragraph (6)(ii) of this subsection, a hospital may acquire a freestanding ambulatory surgical facility or office of one or more health care practitioners or a group practice with one or more operating rooms used primarily for the purpose of providing ambulatory surgical services if the facility, office, or group practice:

(i) Has obtained a certificate of need;

(ii) Has obtained an exemption from certificate of need requirements; or

(iii) Did not require a certificate of need in order to provide ambulatory surgical services after June 1, 1995.

(9) Nothing in this subsection may be construed to permit a hospital to build or expand its ambulatory surgical capacity in any setting owned or controlled by the hospital without obtaining a certificate of need from the Commission if the building or expansion would increase the surgical capacity of the State’s health care system.

(l) (1) A certificate of need is not required to close any health care facility or part of a health care facility if at least 45 days before the closing or partial closing of the health care facility, including a State hospital, a person proposing to close all or part of the health care facility files notice of the proposed closing or partial closing with the Commission.

(2) A hospital located in a county with fewer than three hospitals that files a notice of its proposed closing or partial closing with the Commission shall hold a public informational hearing in the county where the hospital is located.

(3) The Commission may require a health care facility other than a hospital described in paragraph (2) of this subsection that files notice of its proposed closing or partial closing to hold a public informational hearing in the county where the health care facility is located.

(4) A public informational hearing required under paragraph (2) or (3) of this subsection shall be held by the health care facility, in consultation with the Commission, within 30 days after the health care facility files a notice of its proposed closing or partial closing with the Commission.

(m) (1) Notwithstanding any other provision of this section, the Commission shall consider the special needs and circumstances of a county where a medical service, as defined in this section, does not exist; and

(2) The Commission shall consider and may approve under this subsection a certificate of need application to establish, build, operate, or participate in a health care project to provide a new medical service in a county if the Commission, in its sole discretion, finds that:

(i) The proposed medical service does not exist in the county that the project would be located;

(ii) The proposed medical service is necessary to meet the health care needs of the residents of that county;

(iii) The proposed medical service would have a positive impact on the existing health care system;

(iv) The proposed medical service would result in the delivery of more efficient and effective health care services to the residents of that county; and

(v) The application meets any other standards or regulations established by the Commission to approve applications under this subsection.

(n) The Commission may not issue a certificate of need or a determination with respect to an acquisition that authorizes a general hospice to provide home-based hospice services on a statewide basis.

§ 19-120 - 1. Certificate of conformance

(a) Definitions. --

(1) In this section the following words have the meanings indicated.

(2) "Certificate of conformance" means an approval issued by the Commission that allows an acute general hospital to establish emergency PCI services or elective PCI services without a certificate of need.

(3) "Certificate of ongoing performance" means an approval issued by the Commission that the cardiac surgery services, emergency PCI services, or elective PCI services provided by an acute general hospital meet standards evidencing continued quality.

(4) "Elective PCI" (also known as "nonprimary PCI") includes PCI provided to a patient who is not suffering from an acute coronary syndrome, but whose condition is appropriately treated with PCI based on regulations established by the Commission.

(5) "Emergency PCI" (also known as "primary PCI") includes PCI capable of relieving coronary vessel narrowing associated with STEMI or, as defined by the Commission in regulations, STEMI equivalent.

(6) "PCI" means percutaneous coronary intervention.

(7) (i) "Percutaneous coronary intervention" means a procedure in which a catheter is inserted into a blood vessel and guided to the site of the narrowing of a coronary artery to relieve coronary narrowing.

(ii) "Percutaneous coronary intervention" includes a variety of catheter-based techniques, including balloon angioplasty.

(8) "STEMI" (ST-segment-elevation myocardial infarction) means a type of heart attack or myocardial infarction that is caused by a prolonged period of blocked blood supply, which affects a large area of the heart muscle and causes changes on an electrocardiogram and in the blood levels of key chemical markers.

(b) In general. --

(1) Beginning July 1, 2012, before an acute general hospital may establish emergency PCI services or elective PCI services, the hospital shall obtain a certificate of conformance from the Commission.

(2) The Commission may not issue a certificate of conformance unless the Commission finds that the proposed emergency PCI services or proposed elective PCI services:

(i) Are consistent with the State Health Plan for Facilities and Services;

(ii) Will result in the delivery of more efficient and effective health care services; and

(iii) Are in the public interest.

(c) Exception -- Emergency PCI services. -- Notwithstanding subsection (b) of this section, a certificate of conformance is not required for an acute general hospital to establish emergency PCI services if:

(1) The acute general hospital was providing emergency PCI services on January 1, 2012; and

(2) The Commission determines that the emergency PCI services are consistent with the State Health Plan for Facilities and Services.

(d) Exception -- Elective PCI services. -- Notwithstanding subsection (b) of this section, a certificate of conformance is not required for an acute general hospital to establish elective PCI services if:

(1) On January 1, 2012, the acute general hospital was providing elective PCI services through the C-PORT E registry under authority of a research waiver issued by the Commission;

(2) The Commission finds that the C-PORT E study produced results that should guide public policy; and

(3) The Commission determines that the elective PCI services provided by the acute general hospital continue to be consistent with:

(i) The requirements of the C-PORT E registry; and

(ii) Except for the requirements under COMAR 10.24.05.05, the requirements for maintaining a research waiver under COMAR 10.24.05 and 10.24.17, Table A-1.

(e) Cardiac surgery or PCI services. --

(1) This subsection applies to an acute general hospital that provides cardiac surgery or PCI services under:

(i) A certificate of need issued under § 19-120 of this subtitle;

(ii) A certificate of conformance issued under this section; or

(iii) An exception from the certificate of conformance requirements under subsection (c) or (d) of this section.

(2) An acute general hospital shall obtain and maintain a certificate of ongoing performance to continue to provide:

(i) Cardiac surgery services;

(ii) Emergency PCI services; or

(iii) Elective PCI services.

(f) Elective PCI services under research waiver. -- An acute general hospital that is providing elective PCI services under a research waiver issued by the Commission and does not meet the requirements of subsection (d) of this section shall obtain a certificate of conformance for its elective PCI services before the acute general hospital may obtain a certificate of ongoing performance to provide the elective PCI services.

(g) Regulations. --

(1) The Commission shall adopt regulations through an update to the State Health Plan for Facilities and Services to implement this section.

(2) The regulations shall:

(i) Address quality, access, and cost;

(ii) Establish a process and minimum standards for obtaining a certificate of conformance;

(iii) Establish a process and minimum standards for obtaining and maintaining a certificate of ongoing performance;

(iv) Set an appropriate time period for the expiration of a certificate of ongoing performance;

(v) Require, as a condition of the issuance of a certificate of conformance or a certificate of ongoing performance to an acute general hospital without on-site cardiac surgery services, that the acute general hospital agree to voluntarily relinquish its authority to provide emergency PCI services or elective PCI services if the hospital fails to meet the applicable standards established by the Commission;

(vi) Establish a process for an acute general hospital that is out of compliance with minimum standards for a certificate of ongoing performance to return to good standing;

(vii) Require that an acute general hospital, except for an acute general hospital located in a part of the State that does not have sufficient access to emergency PCI services, have provided emergency PCI services in accordance with established standards before seeking a certificate of conformance for elective PCI services;

(viii) Prohibit an acute general hospital from providing elective PCI services unless the acute general hospital also provides emergency PCI services;

(ix) Incorporate, to the extent appropriate, the standards for cardiac surgery services, emergency PCI services, and elective PCI services recommended by the clinical advisory group established under paragraph (3) of this subsection;

(x) Include requirements for peer or independent review, consistent with the ACCF/AHA/SCAI Guidelines for Percutaneous Coronary Intervention (Report of the American College of Cardiology Foundation/American Heart Association Task Force on Practice Guidelines and the Society for Cardiovascular Angiography and Interventions), of difficult or complicated cases and for randomly selected cases; and

(xi) For a certificate of conformance for elective PCI services, give weight to the experience, performance, investment, and scope of interventional capabilities of an applicant hospital that was providing emergency PCI services on January 1, 2012.

(3) (i) The Commission shall establish a clinical advisory group to advise the Commission and recommend standards for cardiac surgery services, emergency PCI services, and elective PCI services for inclusion in regulations adopted under this subsection.

(ii) The clinical advisory group shall be composed of experts in cardiac surgery services and PCI services, including:

1. Clinicians and representatives from hospitals in the State with and without on-site cardiac surgery services and with and without PCI services;

2. At least one representative of an acute general hospital that is not part of a merged asset system and provides only emergency PCI services; and

3. Other persons with needed expertise from inside and outside the State.

(4) (i) On or before September 30, 2013, after obtaining advice from the clinical advisory group and other appropriate stakeholders, the Commission shall:

1. Develop recommended regulations under this subsection;

2. Post the recommended regulations on its Web site for public comment; and

3. Submit the recommended regulations to the Governor and, in accordance with § 2-1246 of the State Government Article, the Senate Finance Committee and the House Health and Government Operations Committee.

(ii) The Senate Finance Committee and the House Health and Government Operations Committee shall have 60 days from receipt of the recommended regulations for review and comment.