2005 Connecticut Code - Sec. 19a-638. (Formerly Sec. 19a-154). Certificate of need. Request for approval of transfer of ownership or control, change in function or service, capital expenditures and acquisition of equipment; letter of intent; approval process. Moratorium on nursing home beds.

      Sec. 19a-638. (Formerly Sec. 19a-154). Certificate of need. Request for approval of transfer of ownership or control, change in function or service, capital expenditures and acquisition of equipment; letter of intent; approval process. Moratorium on nursing home beds. (a) Except as provided in sections 19a-639a to 19a-639c, inclusive:

      (1) Each health care facility or institution, that intends to (A) transfer all or part of its ownership or control, (B) change the governing powers of the board of a parent company or an affiliate, whatever its designation, or (C) change or transfer the powers or control of a governing or controlling body of an affiliate, shall submit to the office, prior to the proposed date of such transfer or change, a request for permission to undertake such transfer or change.

      (2) Each health care facility or institution or state health care facility or institution, including any inpatient rehabilitation facility, which intends to introduce any additional function or service into its program of health care shall submit to the office, prior to the proposed date of the institution of such function or service, a request for permission to undertake such function or service.

      (3) Each health care facility or institution or state health care facility or institution which intends to terminate a health service offered by such facility or institution or reduce substantially its total bed capacity, shall submit to the office, prior to the proposed date of such termination or decrease, a request to undertake such termination or decrease.

      (4) Each applicant, prior to submitting a certificate of need application under this section, section 19a-639 or under both sections, shall submit a request, in writing, for application forms and instructions to the office. The request shall be known as a letter of intent. A letter of intent shall include: (A) The name of the applicant or applicants; (B) a statement indicating whether the application is for a new, replacement or additional facility, service or function, the expansion or relocation of an existing facility, service or function, a change in ownership or control, a termination of a service or a reduction in total bed capacity and the bed type, any new or additional beds and their type, a capital expenditure over one million dollars, the acquisition of major medical equipment, imaging equipment or a linear accelerator costing over four hundred thousand dollars, or any combination thereof; (C) the estimated capital cost, value or expenditure; (D) the town where the project is or will be located; and (E) a brief description of the proposed project. The office shall provide public notice of any complete letter of intent submitted under this section, section 19a-639, or both, by publication in a newspaper having a substantial circulation in the area served or to be served by the applicant. Such notice shall be submitted for publication not later than fifteen business days after a determination that a letter of intent is complete. No certificate of need application will be considered submitted to the office unless a current letter of intent, specific to the proposal and in compliance with this subsection, has been on file with the office at least sixty days. A current letter of intent is a letter of intent which has been on file at the office up to and including one hundred twenty days, except that an applicant may request a one-time extension of a letter of intent of up to an additional thirty days for a maximum total of up to one hundred fifty days if, prior to the expiration of the current letter of intent, the office receives a written request to so extend the letter of intent's current status. The extension request shall fully explain why an extension is requested. The office shall accept or reject the extension request within five business days and shall so notify the applicant.

      (b) The office shall make such review of a request made pursuant to subdivision (1), (2) or (3) of subsection (a) of this section as it deems necessary. In the case of a proposed transfer of ownership or control, the review shall include, but not be limited to, the financial responsibility and business interests of the transferee and the ability of the institution to continue to provide needed services or, in the case of the introduction of a new or additional function or service expansion or the termination of a service or function, ascertaining the availability of such service or function at other inpatient rehabilitation facilities, health care facilities or institutions or state health care facilities or institutions or other providers within the area to be served, the need for such service or function within such area and any other factors which the office deems relevant to a determination of whether the facility or institution is justified in introducing or terminating such functions or services into or from its program. The office shall grant, modify or deny such request no later than ninety days after the date of receipt of a complete application, except as provided for in this section. Upon the request of the applicant, the review period may be extended for an additional fifteen days if the office has requested additional information subsequent to the commencement of the review period. The commissioner may extend the review period for a maximum of thirty days if the applicant has not filed in a timely manner information deemed necessary by the office. Failure of the office to act on such request within such review period shall be deemed approval thereof. The ninety-day review period, pursuant to this subsection, for an application filed by a hospital, as defined in section 19a-490, and licensed as a short-term acute-care general hospital or children's hospital by the Department of Public Health or an affiliate of such a hospital or any combination thereof, shall not apply if, in the certificate of need application or request, the hospital or applicant projects either (1) that, for the first three years of operation taken together, the total impact of the proposal on the operating budget of the hospital or an affiliate of such a hospital or any combination thereof will exceed one per cent of the actual operating expenses of the hospital for the most recently completed fiscal year as filed with or determined by the office, or (2) that the total capital expenditure for the project will exceed fifteen million dollars. If the office determines that an application is not subject to the ninety-day review period pursuant to this subsection, it shall remain so excluded for the entire review period of that application, even if the application or circumstances change and the application no longer meets the stated terms of the exclusion. Upon a showing by such facility or institution that the need for such function, service or termination or change of ownership or control is of an emergency nature, in that the function, service or termination or change of ownership or control is necessary to comply with requirements of any federal, state or local health, fire, building or life safety code, the commissioner may waive the letter of intent requirement, provided such request shall be submitted at least ten business days before the proposed date of institution of the function, service or termination or change of ownership or control.

      (c) (1) The office may hold a public hearing with respect to any complete certificate of need application submitted under this section. At least two weeks' notice of such public hearing shall be given to the applicant, in writing, and to the public by publication in a newspaper having a substantial circulation in the area served by the facility, institution or provider. At the discretion of the office, such hearing may be held in Hartford or in the area so served or to be served. In conducting its activities under this section, section 19a-639, or under both sections, the office may hold hearings on applications of a similar nature at the same time.

      (2) The office may hold a public hearing after consideration of criteria that include, but need not be limited to, whether the proposal involves: (A) The provision of a new or additional health care function or service through the use of technology that is new or being introduced into the state; (B) the provision of a new or additional health care function or service that is not provided in either a region designated by the applicant or in the applicant's existing primary service area as defined by the office; or (C) the termination of an existing health care function or service, the reduction of total beds or the closing of a health care facility.

      (3) The office shall hold a public hearing with respect to any complete certificate of need application submitted to the office under this section if three individuals or an individual representing an entity with five or more people submit a request, in writing, that a public hearing be held on the proposal after the office has published notice of a complete letter of intent.

      (d) For the purposes of this section, section 19a-639 or both sections, construction shall be deemed to have begun if the following have occurred and the office has been so notified in writing within the thirty days prior to the date by which construction is to begin: (1) All necessary town, state and federal approvals required to begin construction have been obtained, including all zoning and wetlands approvals; (2) all necessary town and state permits required to begin construction or site work have been obtained; (3) financing approval, as defined in subsection (e) of this section, has been obtained; and (4) construction of a structure approved in the certificate of need has begun. For the purposes of this subsection, commencement of construction of a structure shall include, at a minimum, completion of a foundation. Notwithstanding the provisions of this subsection, upon receipt of an application filed at least thirty days prior to the date by which construction is to begin, the office may deem construction to have begun if (A) an owner of a certificate of need has fully complied with the provisions of subdivisions (1), (2) and (3) of this subsection; (B) such owner submits clear and convincing evidence that he has complied with the provisions of this subsection sufficiently to demonstrate a high probability that construction shall be completed in time to obtain licensure by the Department of Public Health on or before the date required in the certificate of need as the office may amend it from time to time; (C) construction of a structure cannot begin due to unforseeable circumstances beyond the control of the owner; and (D) at least ten per cent of the approved total capital expenditure or two hundred fifty thousand dollars, whichever is greater, has been expended.

      (e) Financing shall be deemed to have been obtained for the purposes of this section if the owner of the certificate of need has (1) received a final commitment for financing in writing from a lender, or (2) provided evidence to the office that the owner has sufficient funds available to construct the project without financing.

      (f) The General Assembly finds evidence of insufficient need for all the nursing home beds approved by the Office of Health Care Access but not yet constructed and finds allowing unnecessary beds and facilities to be built will result in severely damaging economic consequences to the state and to consumers. All certificates of need for nursing home beds granted pursuant to this section shall expire on June 9, 1993, except (1) beds for which an application for financing was received and deemed complete by the Connecticut Health and Educational Facilities Authority prior to March 1, 1993; (2) beds restricted to use by patients with acquired immune deficiency syndrome or traumatic brain injury; (3) beds associated with a continuing care facility which guarantees life care for its residents as defined in subsection (b) of section 17b-354; (4) beds authorized under a certificate of need for an addition of five beds in a facility which has undertaken the addition of ten beds pursuant to section 17b-351; and (5) beds for which twenty-five per cent of project costs have been expended prior to June 9, 1993, as submitted to the Office of Health Care Access in the form of a report prepared by a certified public accountant having no affiliation with the owner of the certificate of need or the developer of the project. A certificate of need which has expired pursuant to this subsection may be reauthorized by the Office of Health Care Access, provided need for nursing home beds exists and twenty per cent or more of the project costs have been expended by June 9, 1993. A request for reauthorization shall be submitted to the Office of Health Care Access no later than July 15, 1993. The office shall issue a decision on such request within forty-five days of receipt of documentation necessary to determine expended project costs. Project expenditures shall cease from June 9, 1993, until reauthorization by the office. Evidence of project costs expended shall be submitted in the form of a report prepared by a certified public accountant having no affiliation with the owner of the certificate of need or the developer of the project. For the purposes of this section, "need for nursing home beds" means there is a demonstrated bed need in the towns within twenty miles of the town in which the facility is proposed to be located, including the town of the proposed location, as listed in the March 1, 1974, official mileage table of the Public Utilities Commission. Bed need shall be projected no more than five years into the future at ninety-seven and one-half per cent occupancy using the latest official population projections by town and age as published by the Office of Policy and Management and the latest available nursing home utilization statistics by age cohort from the Department of Public Health. For the purposes of this subsection, "project costs" means the capital costs approved by the Office of Health Care Access in the certificate of need, exclusive of the cost of land acquisition. Owners of certificates of need for nursing home beds which have expired may apply to the Commissioner of Social Services for compensation on or after June 29, 1993, but no later than September 1, 1993. Such compensation shall be limited to actual verifiable losses which directly result from the expiration of the certificate of need pursuant to this subsection and which cannot be otherwise recouped through the mitigating efforts of the owner, excluding consequential and incidental losses such as lost profits. Such compensation shall not exceed an amount approved by the office within the certificate of need unless the commissioner determines it is reasonable or cost-effective to compensate the excess amount. Notwithstanding any provision of this subsection, no compensation shall be provided to an owner of a certificate of need whose ability to implement the certificate of need is contingent on the outcome of a legal action taken against the owner until the owner obtains a final decision in his favor. An owner aggrieved by the amount of compensation determined by the commissioner may request a hearing in accordance with the provisions of sections 17b-61 and 17b-104. The commissioner may so compensate an owner of a certificate of need for nursing home beds who volunteers to relinquish such a certificate, provided the request for compensation is received by the commissioner prior to July 15, 1993. The commissioner shall notify such an owner as to whether he will be compensated within forty-five days from receipt of notice of voluntary relinquishment or forty-five days of June 29, 1993, whichever is later.

      (P.A. 73-117, S. 13, 31; P.A. 77-192, S. 7, 13; 77-304, S. 2; 77-601, S. 7, 11; P.A. 79-98, S. 1, 4; P.A. 80-73, S. 4; P.A. 81-211; 81-441, S. 1; 81-465, S. 5, 9, 18; P.A. 82-415, S. 15, 18; P.A. 83-215, S. 1, 3; P.A. 86-374, S. 2, 6; P.A. 87-192, S. 1, 3; 87-420, S. 11, 14; P.A. 89-72, S. 1, 5; 89-325, S. 12, 26; P.A. 91-48, S. 1, 4; June Sp. Sess. P.A. 91-8, S. 27, 63; June Sp. Sess. P.A. 91-12, S. 10; P.A. 92-220, S. 1, 2; P.A. 93-229, S. 3, 21; 93-262, S. 1, 17, 87; 93-381, S. 9, 39; 93-406, S. 1, 6; 93-435, S. 59, 95; P.A. 94-236, S. 9, 10; P.A. 95-257, S. 12, 21, 39, 46, 58; P.A. 97-112, S. 2; P.A. 98-150, S. 2, 17; P.A. 02-89, S. 34; P.A. 03-17, S. 1.)

      History: P.A. 77-192 included state health care facilities or institutions in provisions of section; P.A. 77-304 specified applicability to facilities or institutions which intend to "transfer all or any part of its ownership or control prior to being initially licensed" and specified factors to be considered in review if transfer of ownership or control is proposed; P.A. 77-601 added provisions concerning applicability of provisions to home health care, homemaker-home health aide, or coordination assessment and monitoring agencies and added Subsec. (b) re approval of home health care, homemaker-home health aide or coordination, assessment and monitoring agencies; P.A. 79-98 made provisions applicable to inpatient rehabilitation facilities affiliated with Easter Seal Society; P.A. 80-73 allowed commission to modify requests as well as to grant or deny requests in Subsec. (a); P.A. 81-211 mandated commission approval in Subsec. (a) for decreases in services to medical assistance patients by termination of medicaid provider agreements; P.A. 81-441 amended the commission on hospitals and health care certificate of need review process by exempting from review outpatient, i.e. "ambulatory", services provided by a health maintenance organization and by extending review to any facility plan to terminate a health service or to substantially decrease bed capacity; P.A. 81-465 amended Subsec. (a) to exempt home health care and homemaker-home health care agencies from commission review relative to transfers of ownership prior to initial licensure or increased staffing or services, and added provisions, codified by the Revisors as Subsec. (c), re coordination of activities between commission and health systems agencies; P.A. 82-415 eliminated exception for ambulatory service programs by health maintenance organizations from provision requiring submission of request for permission to add a function or service or to increase staff in Subsec. (a); Sec. 19-73l transferred to Sec. 19a-154 in 1983; P.A. 83-215 exempted ambulatory services established and conducted by a health maintenance organization from certificate of need review, provided for a fifteen day extension of the ninety day review period if additional information is requested by the commissioner or a motion to approve, modify or deny a request results in a tie vote and authorized the adoption of regulations to establish a schedule for the submission of similar requests; P.A. 86-374 deleted references to coordination, assessment and monitoring agencies, including all of Subsec. (b), relettering Subsec. (c) accordingly; P.A. 87-192 deleted references to "ninety-day" review period and added the provision re extension of the review period for thirty days; P.A. 87-420 deleted references to health systems agency and deleted the provision re coordination of activities with health systems agencies; P.A. 89-72 amended Subsec. (b) to change "shall" to "may" with regard to holding of hearings, adopting of regulations and establishing of a schedule which provides for completed applications pertaining to similar types of services; P.A. 89-325 deleted provisions re the decrease in services to recipients of medical assistance benefits in Subsec. (a); P.A. 91-48 restated Subsec. (a) provision re agencies required to request permission to undertake transfer of ownership or control, to institute additional functions or services or to terminate functions and services or to reduce bed capacity; June Sp. Sess. P.A. 91-8 added Subsecs. (d), (e) and (f) re moratorium on certificate of need for additional nursing home beds, on additional requests for beds from residential facilities for the mentally retarded, and any requests to modify the capital cost or expiration date of approval; June Sp. Sess. P.A. 91-12 amended Subsec. (c) requiring the commission to adopt regulations requiring that applications for certificates be submitted in cycles; P.A. 92-220 amended Subsec. (d) by extending moratorium through June 30, 1994, and adding provision re date by which construction shall begin and date by which nursing home shall be licensed under certificates of need in effect August 1, 1991, amended Subsec. (e) by deleting provision re expiration of approval of additional nursing home beds granted on or before July 1, 1991, and substituting definition of "a continuing care facility which guarantees life care for its residents", added Subsec. (g) re joint request for merger of certificates of need, added Subsec. (h) re when construction shall be deemed to have begun, added Subsec. (i) re when financing shall be deemed to have been obtained, and added Subsec. (j) re when financing shall be deemed to have been obtained on and after March 1, 1993; P.A. 93-229 amended Subsec. (a) to add new Subdiv. (4) re submission of letter of intent, amended Subsec. (b) re exception to ninety-day review period, adding language explaining that emergency nature to include compliances with fire, building or life safety code and that the letter of intent may be waived and amended Subsec. (c) to change "shall" to "may" re adoption of regulations, effective June 4, 1993; P.A. 93-262 deleted homemaker-home health aide agencies and added nursing homes, homes for the aged, rest homes and certain residential facilities for the mentally retarded as facilities to which section applies, deleted Subsecs. (d) to (g), inclusive, and (i) concerning requests for additional nursing home beds, continuing care facilities, requests for beds in residential facilities for the mentally retarded, certificates of need and financing methods, relettering remaining Subsecs. as necessary, effective July 1, 1993; P.A. 93-381 replaced department of health services with department of public health and addiction services, effective July 1, 1993; P.A. 93-406 added Subsecs. (f) and (g) re expiration of certificates of need for nursing home beds, effective June 29, 1993 (Revisor's note: Pursuant to P.A. 93-262, 93-381 and 93-435 references to commissioners and departments of health services and income maintenance were replaced editorially by the Revisors by references to commissioners and departments of public health and addiction services and social services, respectively); P.A. 94-236 deleted former Subsec. (g) regarding nonexpiration of certificate of need if additional beds are used for a continuing care facility, effective June 7, 1994; P.A. 95-257 replaced Commission on Hospitals and Health Care and "commission" with Office of Health Care Access and "office" or "commissioner", replaced Department of Public Health and Addiction Services with Department of Public Health and deleted reference to a tie vote of the former commission, effective July 1, 1995; Sec. 19a-154 transferred to Sec. 19a-638 in 1997; P.A. 97-112 replaced "home for the aged" with "residential care home"; P.A. 98-150 added reference to exceptions in introductory language of Subsec. (a) and deleted the exceptions throughout section, reworded transfer as Subpara. (A) in Subsec. (a)(1) and added Subparas. (B) and (C), changed "transfer" to "transfer or change" in Subsec. (a)(1), amended Subdiv. (a)(4) by adding "replacement or additional", adding "or relocation" to "expansion" adding references to change in ownership or control, termination of services or reduction in bed capacity or type, capital expenditure over one million dollars and acquisition of specified equipment over four hundred thousand dollars, added "value or expenditure" to Subdiv. (a)(4)(C), changed ninety days to sixty in Subdiv. (a)(4)(E) and added exception re one-time extension, amended Subsec. (b) by adding "new" and "expansion or the termination" to service or function and adding reference to termination or change of ownership throughout Subsec., added "affiliate of such hospital or any combination thereof", replaced reference to future budget adjustments with Subdivs. (1), (2) and language re exclusion during review period, amended Subsec. (c) by deleting obsolete authority to adopt regulations and made technical changes throughout, effective June 5, 1998; P.A. 02-89 amended Subsec. (a) to replace reference to Sec. 19a-639d with Sec. 19a-639c, reflecting repeal of Sec. 19a-639d by the same public act; P.A. 03-17 amended Subsec. (a) by replacing "decrease" with "reduce" in Subdiv. (3) and by changing licensed bed capacity to total bed capacity and requiring notice when letter of intent received in Subdiv. (4), made technical changes in Subsec. (b) and amended Subsec. (c) by adding Subdivs. (1) to (3) re public hearings on complete certificate of need applications under certain circumstances.

      See chapter 54 re uniform administrative procedure.

      See Sec. 17b-347 re transfer of Medicaid patients to participating facility by nursing home which terminates its provider agreement.

      Annotation to former section 19-73l:

      Cited. 33 CS 86.

      Annotations to former section 19a-154:

      Cited. 200 C. 133, 135. Cited. 208 C. 663-665, 667, 668, 670. Cited. 214 C. 321, 323-327, 333-335. Cited. 226 C. 105, 108, 113, 134. Cited. 235 C. 128, 130, 131, 141. Cited. 238 C. 216.

      Subsec. (a):

      Cited. 200 C. 489, 498. Cited. 208 C. 663, 668. Cited. 214 C. 321, 326, 335. Cited. 226 C. 105, 108. Cited. 235 C. 128, 140.