2005 Vermont Code - § 9434. — Certificate of need; general rules

§ 9434. Certificate of need; general rules

(a) A health care facility other than a hospital shall not develop, or have developed on its behalf a new health care project without issuance of a certificate of need by the commissioner. For purposes of this subsection, a "new health care project" includes the following:

(1) The construction, development, purchase, renovation, or other establishment of a health care facility, or any capital expenditure by or on behalf of a health care facility, for which the capital cost exceeds $1,500,000.00.

(2) A change from one licensing period to the next in the number of licensed beds of a health care facility through addition or conversion, or through relocation from one physical facility or site to another.

(3) The offering of any home health service, or the transfer or conveyance of more than a 50 percent ownership interest of a home health agency.

(4) The purchase, lease, or other comparable arrangement of a single piece of diagnostic and therapeutic equipment for which the cost, or in the case of a donation the value, is in excess of $1,000,000.00. For purposes of this subdivision, the purchase or lease of one or more articles of diagnostic or therapeutic equipment which are necessarily interdependent in the performance of their ordinary functions or which would constitute any health care facility included under subdivision 9432(7)(B) of this title, as determined by the commissioner, shall be considered together in calculating the amount of an expenditure. The commissioner's determination of functional interdependence of items of equipment under this subdivision shall have the effect of a final decision and is subject to appeal under this subchapter.

(5) The offering of a health care service or technology having an annual operating expense which exceeds $500,000.00 for either of the next two budgeted fiscal years, if the service or technology was not offered or employed by the health care facility within the previous three fiscal years.

(b) A health care facility other than a hospital that proposes to develop a project described in subdivision (a)(1) or (4) of this section which is exempt from the requirements of this subchapter solely because the cost or value of the proposed project does not exceed the financial thresholds of those subdivisions shall file a letter of intent with the commissioner, if the cost or value is greater than $750,000.00 or, in the case of durable medical equipment, $500,000.00. Upon review, the commissioner may require the health care facility to obtain a certificate of need if, within 30 days of receiving the letter of intent, he or she finds that the proposed development:

(1) may be inconsistent with the health resource allocation plan;

(2) has the potential for significantly increasing utilization or rates; or

(3) may substantially change the type, scope, or volume of service.

(c) A hospital shall not develop, or have developed on its behalf a new health care project without issuance of a certificate of need by the commissioner. For purposes of this subsection, a "new health care project" includes the following:

(1) The construction, development, purchase, renovation or other establishment of a health care facility, or any capital expenditure by or on behalf of a hospital, for which the capital cost exceeds $3,000,000.00.

(2) The purchase, lease, or other comparable arrangement of a single piece of diagnostic and therapeutic equipment for which the cost, or in the case of a donation the value, is in excess of $1,000,000.00. For purposes of this subdivision, the purchase or lease of one or more articles of diagnostic or therapeutic equipment which are necessarily interdependent in the performance of their ordinary functions or which would constitute any health care facility included under subdivision 9432(7)(B) of this title, as determined by the commissioner, shall be considered together in calculating the amount of an expenditure. The commissioner's determination of functional interdependence of items of equipment under this subdivision shall have the effect of a final decision and is subject to appeal under this subchapter.

(3) The offering of a health care service or technology having an annual operating expense which exceeds $500,000.00 for either of the next two budgeted fiscal years, if the service or technology was not offered or employed by the hospital within the previous three fiscal years.

(4) A change from one licensing period to the next in the number of licensed beds of a health care facility through addition or conversion, or through relocation from one physical facility or site to another.

(d) A hospital that proposes to develop a project described in subdivision (c)(1) or (2) of this section which is exempt from the requirements of this subchapter solely because the cost or value of the proposed project does not exceed the financial thresholds of those subdivisions shall file a letter of intent with the commissioner, if the cost or value is greater than $1,500,000.00 or, in the case of diagnostic and therapeutic equipment, $750,000.00. Upon review, the commissioner may require the health care facility to obtain a certificate of need if, within 30 days of receiving the letter of intent, he or she finds that the proposed development:

(1) may be inconsistent with the health resource allocation plan;

(2) has the potential for significantly increasing utilization or rates;

(3) may substantially change the type, scope, or volume of service; or

(4) has the potential to place an undue financial burden on the hospital's resources.

(e) In the case of a project which requires a certificate of need under this section, expenditures for which are anticipated to be in excess of $20,000,000.00, the applicant first shall secure a conceptual development phase certificate of need, in accordance with the standards and procedures established in this subchapter, which permits the applicant to make expenditures for architectural services, engineering design services, and any other planning services needed in connection with the project. Upon completion of the conceptual development phase of the project, and before offering or further developing the project, the applicant shall secure a final certificate of need, in accordance with the standards and procedures established in this subchapter. Applicants shall not be subject to sanctions for failure to comply with the provisions of this subsection if such failure is solely the result of good faith reliance on verified project cost estimates issued by qualified persons, which cost estimates would have led a reasonable person to conclude the project was not anticipated to be in excess of $20,000,000.00 and therefore not subject to this subsection.

(f) If the commissioner determines that a person required to obtain a certificate of need under this subchapter has separated a single project into components in order to avoid cost thresholds or other requirements under this subchapter, the person shall be required to submit an application for a certificate of need for the entire project, and the commissioner may proceed under section 9445 of this title. The commissioner's determination under this subsection shall have the effect of a final decision and is subject to appeal under this subchapter.

(g) Beginning January 1, 2005, and biannually thereafter, the commissioner may by rule adjust the monetary jurisdictional thresholds contained in this section. In doing so, the commissioner shall reflect the same categories of health care facilities, services, and programs recognized in this section. Any adjustment by the commissioner shall not exceed the consumer price index rate of inflation. (Added 1979, No. 65, § 1; amended 1985, No. 234 (Adj. Sess.), § 2; 1987, No. 96, § 21(b); 1989, No. 180 (Adj. Sess.), § 2; 1991, No. 160 (Adj. Sess.), § 38, eff. May 11, 1992; 1993, No. 30, § 17, eff. May 21, 1993; 1995, No. 160 (Adj. Sess.), § 8; No. 178 (Adj. Sess.), §§ 132a, 306; No. 180 (Adj. Sess.), § 25; 1997, No. 159 (Adj. Sess.), § 8, eff. April 29, 1998; 2003, No. 53, §§ 10, 26; 2003, No. 105 (Adj. Sess.), § 14, eff. May 4, 2004; 2005, No. 57, § 4, eff. June 13, 2005.)