2015 Tennessee Code
Title 68 - Health, Safety and Environmental Protection
Health
Chapter 11 - Health Facilities and Resources
Part 16 - Tennessee Health Services and Planning Act of 2002
§ 68-11-1607 - Certificate of need -- Applications -- Exemptions -- Registration of equipment -- Critical access hospital designation.

TN Code § 68-11-1607 (2015) What's This?

(a) No person may perform the following actions in the state except after applying for and receiving a certificate of need for the same:

(1) The construction, development, or other establishment of any type of health care institution;

(2) Modification of a health care institution, other than a hospital, including renovations and additions to facilities, where such modification requires a capital expenditure greater than two million dollars ($2,000,000), or in the case of a hospital where such modification requires a capital expenditure greater than five million dollars ($5,000,000). Acquisition of real property as an investment, not for immediate use by the health care institution, shall not be deemed a modification; however, the cost of such property, or its value at the time of application, regardless of whether acquired by lease, loan, or gift, shall be included as required by agency rules as part of the total project cost of any later proposed project for the improvement, development, or use of the property in a manner that does modify the institution's facilities or services in a manner that requires a certificate of need. This subdivision (a)(2) does not apply to expenditures not directly related to patient care;

(3) In the case of a health care institution, any change in the bed complement, regardless of cost, that:

(A) Increases by one (1) or more the total number of licensed beds;

(B) Redistributes beds from acute to long-term care categories;

(C) Redistributes beds from any category to acute, rehabilitation, child and adolescent psychiatric, or adult psychiatric; or

(D) Relocates beds to another facility or site;

(4) Initiation of any of the following health care services: burn unit, neonatal intensive care unit, open heart surgery, extracorporeal lithotripsy, magnetic resonance imaging, cardiac catheterization, linear accelerator, positron emission tomography, swing beds, home health, hospice, psychiatric, rehabilitation or hospital-based alcohol and drug treatment for adolescents provided under a systematic program of care longer than twenty-eight (28) days, or opiate addiction treatment provided through a nonresidential substitution-based treatment center for opiate addiction;

(5) A change in the location of or the replacement of existing or certified facilities providing health care services and health care institutions, or a change in the location of or the replacement of medical equipment that requires a certificate of need. An additional certificate of need is not required to move mobile medical equipment that requires a certificate of need to a facility site for which a certificate of need already has been issued. A change in the location of or the replacement of a home health agency may be exempted from the certificate of need requirements by agency rule. The relocation of the principal office of a home health agency or hospice within the same county shall not require a certificate of need;

(6) The acquisition by any person of major medical equipment for service to patients, the cost of which, exclusive of renovations or modifications, exceeds two million dollars ($2,000,000); provided, that the requirements of this subdivision (a)(6) shall not apply to the replacement of the same or similar equipment or an upgrade of equipment which improves the quality or cost effectiveness of the service. In order to receive such exemption for replacement or upgrade of equipment, the person acquiring such replacement or upgrade shall file a written notice of such replacement or upgrade with the health services and development agency. The notice filed shall contain a description of the original equipment and the replacement or upgraded equipment, together with the cost of such equipment. The health services and development agency shall consider the information contained in the notice to determine if the replacement or upgraded equipment meets the requirements of this subdivision (a)(6);

(7) The discontinuation of any obstetrical or maternity service;

(8) Nothing in this part shall require a certificate of need in order for an existing hospital licensed by the department of mental health and substance abuse services to become licensed by the department of health as a satellite of an affiliated general acute care hospital as provided by § 33-2-403(b)(8)(B); and

(9) The closing of any hospital that has been designated as a critical access hospital under the medicare rural flexibility program or the elimination in the hospital of any services for which a certificate of need is required.

(b) No agency of the state, or of any county or municipal government, shall approve any grant of funds for, or issue any license to a health care institution for any portion or activity of the health care institution that is established, modified, relocated, changed, or resumed, or that constitutes a covered health care service, in a manner in violation of this part. If any agency of the state, or any county or municipal government approves any grant of funds for, or issues any license to any person or institution for which a certificate of need was required but was not granted, the license shall become void and the funds shall be refunded to the state within ninety (90) days. The agency has the authority to impose civil penalties and petition any circuit or chancery court having jurisdiction to enjoin any person who is in violation as further defined in this part.

(c) (1) Each application shall be commenced by the filing of a letter of intent. The letter of intent shall be filed between the first day of the month and the tenth day of the month, inclusive, prior to the commencement of the review cycle in which the application is to be considered. At the time of filing, the applicant shall cause the letter of intent to be published in a newspaper of general circulation in the proposed service area of the project. The published letter of intent must contain a statement:

(A) That any health care institution wishing to oppose the application must file written notice with the agency no later than fifteen (15) days before the agency meeting at which the application is originally scheduled; and

(B) That any other person wishing to oppose the application must file a written objection with the agency at or prior to the consideration of the application by the agency.

(2) Persons desiring to file a certificate of need application seeking a simultaneous review regarding a similar project for which a letter of intent has been filed, shall file with the agency a letter of intent within ten (10) days after publication of the first filed letter of intent. A copy of any letter of intent filed after the first letter of intent shall be mailed or delivered to the first filed applicant, and shall be published in a newspaper of general circulation in the proposed service area of the first filed applicant within ten (10) days after publication by the first filed applicant. The applications shall be considered and decided by the health services and development agency simultaneously. The agency may refuse to consider the applications simultaneously, if it finds that the applications do not meet the requirements of "simultaneous review" under the rules of the agency.

(3) Applications for a certificate of need, including simultaneous review applications, shall be filed within five (5) days from the date of publication of the letter of intent. All applications, original and simultaneous review, shall not enter the next review cycle, unless filed with the agency within such time as to assure that such application is deemed complete in accordance with the rules of the agency.

(4) If there are two (2) or more applications to be reviewed simultaneously in accordance with this part and the rules of the agency, and one (1) or more of those applications is not deemed complete to enter the review cycle, the other applications that are deemed complete shall enter the review cycle. The application or applications that are not deemed complete to enter the review cycle will not be considered with the applications deemed complete and entering the review cycle.

(5) Review cycles shall begin on the first day of each of the following months: January, March, May, July, September, and November; provided, however, that the agency may expand the beginning of the review cycle to other months by rule. Written notice of the beginning of the review cycle shall be made to all applicants deemed complete by the agency for that review cycle. The review cycle shall also be distributed to the members of the agency. If an application is not deemed complete within sixty (60) days after written notification is given to the applicant by the agency staff that the application is deemed incomplete, the application shall be deemed void. If the applicant decides to resubmit the application, the applicant shall comply with all procedures as set out by this part and a new filing fee shall accompany the application.

(6) Each application filed with the agency shall be accompanied by a nonrefundable examination fee which will be fixed by the rules of the agency.

(7) All information provided in the application or any information submitted to the agency in support of an application shall be true and correct. No substantive amendments to the application, as defined by rule of the agency, shall be allowed.

(8) Each applicant shall designate a representative as the contact person for the applicant and shall notify the agency, in writing, of the contact person's name, address, and telephone number. The applicant shall immediately notify the agency in writing of any change in the identity of the contact person or the contact person's address. In addition to any other method of service permitted by law, the agency may serve by registered or certified mail any notice or other legal document upon the contact person at such person's last address of record in the files of the agency. Notwithstanding any law to the contrary, service in the manner specified in this subdivision (c)(8) shall be deemed to constitute actual service upon the applicant.

(9) (A) Within ten (10) days of the filing of an application for a nonresidential substitution-based treatment center for opiate addiction with the agency, the applicant shall send a notice to the county mayor of the county in which the facility is proposed to be located; the state representative and senator representing the house district and the senate district in which the facility is proposed to be located; and the mayor of the municipality, if the facility is proposed to be located within the corporate boundaries of a municipality; by certified mail, return receipt requested, informing those officials that an application for a nonresidential substitution-based treatment center for opiate addiction has been filed with the agency by the applicant.

(B) If an application involves a healthcare facility in which a county or municipality is the lessor of the facility or real property on which it sits, then within ten (10) days of filing the application, the applicant shall notify the chief executive officer of the county or municipality of the filing, by certified mail, return receipt requested.

(C) An application subject to the notification requirement of this subdivision (c)(9) shall not be deemed complete if the applicant has not provided proof of compliance with this subdivision (c)(9) to the agency.

(d) (1) No communications are permitted with the members of the agency once the letter of intent initiating the application process is filed with the agency. Communications between agency members and agency staff shall not be prohibited. Any communication received by an agency member from a person unrelated to the applicant or party opposing the application shall be reported to the executive director and a written summary of such communication shall be made part of the certificate of need file.

(2) All communications between the contact person or legal counsel for the applicant and the executive director or agency staff after an application is deemed complete and placed in the review cycle are prohibited, unless submitted in writing or confirmed in writing and made part of the certificate of need application file. Communications for the purposes of clarification of facts and issues that may arise after an application has been deemed complete and initiated by the executive director or agency staff are not prohibited.

(e) For purposes of this part, agency action shall be the same as administrative action defined in § 3-6-102.

(f) (1) Notwithstanding this section to the contrary, Tennessee state veterans' homes pursuant to title 58, chapter 7 shall not be required to obtain a certificate of need pursuant to this section.

(2) Notwithstanding this section to the contrary, the beds located in any Tennessee state veterans' home pursuant to title 58, chapter 7 shall not be considered by the health services and development agency when granting a certificate of need to a health care institution due to a change in the number of licensed beds, redistributing beds, or relocating beds pursuant to this section.

(g) A hospital with fewer than one hundred (100) licensed beds may increase its total number of licensed beds by ten (10) beds over any period of one (1) year without obtaining a certificate of need. The hospital shall provide written notice of the proposed increase in beds to the agency on forms provided by the agency, prior to the hospital's request for review to the board of licensing health care facilities.

(h) After a person holding a certificate of need has completed the actions for which a certificate of need was granted, such certificate of need shall expire.

(i) The owners of the following types of equipment shall register such equipment with the health services and development agency: computerized axial tomographers, lithotripters, magnetic resonance imagers, linear accelerators and position emission tomography. The registration shall be in a manner and on forms prescribed by the agency and shall include ownership, location, and the expected useful life of such equipment. The first registration of all such equipment shall be on or before September 30, 2002. Thereafter, registration shall occur within ninety (90) days of acquisition of the equipment. All such equipment shall be filed on an annual inventory survey developed by the agency. The survey shall include, but not be limited to, the identification of the equipment and utilization data according to source of payment. The survey shall be filed no later than thirty (30) days following the end of each state fiscal year. The agency is authorized to impose a penalty not to exceed fifty dollars ($50.00) for each day the survey is late.

(j) Notwithstanding this section to the contrary, an entity, or its successor, that was formerly licensed as a hospital, and that has received from the commissioner of health a written determination that it will be eligible for designation as a critical access hospital under the medicare rural hospital flexibility program, is not required to obtain a certificate of need to establish a hospital qualifying for such designation, if it meets the requirements of this subsection (j). In order to qualify for the exemption set forth in this subsection (j), the entity proposing to establish a critical access hospital shall publish notice of its intent to do so in a newspaper of general circulation in the county where the hospital will be located and in contiguous counties. Such notice shall be published at least twice within a 15-day period. The written determination from the department of health and proof of publication required by this subsection (j) shall be filed with the agency within ten (10) days after the last date of publication. If no health care institution within the same county or contiguous counties files a written objection to the proposal with the agency within thirty (30) days of the last publication date, then the exemption set forth in this subsection (j) shall be applicable; provided, that this exemption shall apply only to the establishment of a hospital that qualifies as a critical access hospital under the medicare rural flexibility program and not to any other activity or service. If a written objection by a health care institution within the same county or contiguous counties is filed with the agency within thirty (30) days from the last date of publication, then the exemption set forth in this subsection (j) shall not be applicable.

(k) (1) A nursing home may increase its total number of licensed beds by the lesser of ten (10) beds or ten percent (10%) of its licensed capacity over any period of one (1) year without obtaining a certificate of need. The nursing home shall provide written notice of the increase in beds to the agency on forms provided by the agency prior to the request for licensing by the board for licensing health care facilities.

(2) For new nursing homes, the ten (10) bed or ten percent (10%) increase cannot be requested until one (1) year after the date all of the new beds were initially licensed.

(3) When determining projected county nursing home bed need for certificate of need applications, all notices filed with the agency pursuant to subdivision (k)(1), with written confirmation from the board of licensing health care facilities that a request and application for license has been received and a review has been scheduled, shall be considered with the total of licensed nursing home beds, plus the number of beds from approved certificates of need, but yet unlicensed.

(4) During such time as § 68-11-1622 shall apply, this subsection (k) shall be suspended.

(l) Nothing in this part shall require a certificate of need for a home care organization that is authorized to provide only professional support services as defined in § 68-11-201.

(m) Notwithstanding any other law to the contrary, after May 14, 2004, a home care organization may only initiate hospice services after applying for and receiving a certificate of need for providing hospice services.

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