Maryland Health - General Section 19-120
§ 19-120.
(a) (1) In this section the following words have the meanings indicated.
(2) "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 or 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.
(3) (i) "Health care service" means any clinically related patient service.
(ii) "Health care service" includes a medical service.
(4) "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 following health care projects for which a certificate of need is required under this section.
(2) A certificate of need issued prior to 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 2 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;
D. Is in the public interest; and
3. Within 45 days of receiving notice, the Commission shall notify 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 an open heart surgery, organ transplant surgery, or burn or neonatal intensive health care service;
3. Establishment of a home health program, hospice program, or freestanding ambulatory surgical center or facility; or
4. 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 1 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 2 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 subparagraph, the Commission shall notify 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 health care facility:
(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 $1,250,000;
2. The expenditure is made as part of a replacement of any plant and equipment of the health care facility and is more than $1,250,000 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; or
4. The expenditure results in the establishment of a new medical service in a health care facility 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, 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 $1,250,000;
2. The expenditure is made as part of a replacement of any plant and equipment and is more than $1,250,000 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; or
4. The expenditure results in the establishment of a new medical service in a health care facility that would require a certificate of need under subsection (i) of this section.
(2) 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) of this subsection for an expenditure by the health care facility to acquire the equipment or plant directly.
(3) 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) of this subsection for the transfer at fair market value.
(4) 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) of this subsection for the acquisition by or on behalf of the health care facility.
(5) 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 2 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 shall notify 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 $1,250,000 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 and within 45 days of receipt of the relevant financial information, the Commission makes the financial determination required under item 2 of this subparagraph; and
4. 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, which 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 that:
1. At least 45 days before the proposed donation is made, the hospital notifies the Commission and within 45 days of receipt of the relevant financial information, the Commission makes the financial determination required under this subparagraph; and
2. 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.
(6) Paragraph (5)(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.
(7) Subject to the notice requirements of paragraph (5)(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.
(8) 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) A certificate of need is not required to close any hospital or part of a hospital as defined in § 19-301 of this title if:
(1) (i) Except as provided in paragraph (2) of this subsection, at least 45 days before the closing or partial closing of a hospital, including a State hospital, a person proposing to close all or part of the hospital files notice of the proposed closing or partial closing with the Commission; and
(ii) Within 30 days after receipt of the notice of intent to close, the hospital, in consultation with the Commission, holds a public informational hearing in the county where the hospital is located; or
(2) (i) For a hospital located in a county with fewer than three hospitals, at least 45 days before the closing or partial closing of the hospital, a person proposing to close all or part of the hospital files notice of the proposed closing or partial closing with the Commission; and
(ii) The Commission finds that the closing:
1. Is in the public interest; and
2. Is not inconsistent with:
A. The State health plan; or
B. An institution-specific plan developed by the Commission under § 19-119 of this subtitle.
(m) In this section the terms "consolidation" and "merger" include increases and decreases in bed capacity or services among the components of an organization which:
(1) Operates more than one health care facility; or
(2) Operates one or more health care facilities and holds an outstanding certificate of need to construct a health care facility.
(n) (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.
(o) 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.
