Chapter 267

2004 -- H 7239 SUBSTITUTE A AS AMENDED

Enacted 07/02/04

A N A C T

RELATING TO HEALTH AND SAFETY

Introduced By: Representatives Fox, Lima, Costantino, Ajello, and Almeida

Date Introduced: January 15, 2004

It is enacted by the General Assembly as follows:

     SECTION 1. Section 23-15-4 of the General Laws in Chapter 23-15 entitled

"Determination of Need for New Health Care Equipment and New Institutional Health Services"

is hereby amended to read as follows:

23-15-4. Review and approval of new health care equipment and new institutional

health services. -- (a) No health care provider or health care facility shall develop or offer new

health care equipment or new institutional health services in Rhode Island, the magnitude of

which exceeds the limits defined by this chapter, without prior review by the health services

council and approval by the state agency; except that review by the health services council may

be waived in the case of expeditious reviews conducted in accordance with section 23-15-5, and

except that health maintenance organizations which fulfill criteria to be established in rules and

regulations promulgated by the state agency with the advice of the health services council shall be

exempted from the review and approval requirement established in this section upon approval by

the state agency of an application for exemption from the review and approval requirement

established in this section which contain any information that the state agency may require to

determine if the health maintenance organization meets the criteria.

      (b) No approval shall be made without an adequate demonstration of need by the

applicant at the time and place and under the circumstances proposed, nor shall the approval be

made without a determination that a proposal for which need has been demonstrated is also

affordable by the people of the state.

      (c) No approval of new institutional health services for the provision of health services to

inpatients shall be granted unless the written findings required in accordance with section 23-15-

6(b)(6) are made.

      (d) Applications for determination of need shall be filed with the state agency on a date

fixed by the state agency together with plans and specifications and any other appropriate data

and information that the state agency shall require by regulation, and shall be considered in

relation to each other no less than once a year. A duplicate copy of each application together with

all supporting documentation shall be kept on file by the state agency as a public record.

      (e) The health services council shall consider, but shall not be limited to, the following in

conducting reviews and determining need:

      (1) The relationship of the proposal to state health plans that may be formulated by the

state agency;

      (2) The impact of approval or denial of the proposal on the future viability of the

applicant and of the providers of health services to a significant proportion of the population

served or proposed to be served by the applicant;

      (3) The need that the population to be served by the proposed equipment or services has

for the equipment or services;

      (4) The availability of alternative, less costly, or more effective methods of providing

services or equipment, including economies or improvements in service that could be derived

from feasible cooperative or shared services;

      (5) The immediate and long term financial feasibility of the proposal, as well as the

probable impact of the proposal on the cost of, and charges for, health services of the applicant;

      (6) The relationship of the services proposed to be provided to the existing health care

system of the state;

      (7) The impact of the proposal on the quality of health care in the state and in the

population area to be served by the applicant;

      (8) The availability of funds for capital and operating needs for the provision of the

services or equipment proposed to be offered;

      (9) The cost of financing the proposal including the reasonableness of the interest rate,

the period of borrowing, and the equity of the applicant in the proposed new institutional health

service or new equipment;

      (10) The relationship, including the organizational relationship of the services or

equipment proposed, to ancillary or support services;

      (11) Special needs and circumstances of those entities which provide a substantial

portion of their services or resources, or both, to individuals not residing within the state;

      (12) Special needs of entities such as medical and other health professional schools,

multidisciplinary clinics, and specialty centers; also, the special needs for and availability of

osteopathic facilities and services within the state;

      (13) In the case of a construction project:

      (i) The costs and methods of the proposed construction, and

      (ii) The probable impact of the construction project reviewed on the costs of providing

health services by the person proposing the construction project;

      (14) Those appropriate considerations that may be established in rules and regulations

promulgated by the state agency with the advice of the health services council;

      (15) The potential of the proposal to demonstrate or provide one or more innovative

approaches or methods for attaining a more cost effective and/or efficient health care system;

      (16) The relationship of the proposal to the need indicated in any requests for proposals

issued by the state agency. ;

(17) The input of the community to be served by the proposed equipment and services

and the people of the neighborhoods close to the health care facility who are impacted by the

proposal;

(18) The relationship of the proposal to any long-range capital improvement plan of the

health care facility applicant.

      (f) In conducting its review, the health services council shall perform the following:

      (1) Within one hundred and fifteen (115) days after initiating its review, which must be

commenced no later than thirty-one (31) days after the filing of an application, the health services

council shall determine as to each proposal whether the applicant has demonstrated need at the

time and place and under the circumstances proposed, and in doing so may apply the criteria and

standards set forth in subsection (e) of this section; provided however, that a determination of

need shall not alone be sufficient to warrant a recommendation to the state agency that a proposal

should be approved. The director shall render his or her decision within five (5) days of the

determination of the health services council.

      (2) Prior to the conclusion of its review in accordance with section 23-15-6(e), the health

services council shall evaluate each proposal for which a determination of need has been

established in relation to other proposals, comparing proposals with each other, whether similar

or not, establishing priorities among the proposals for which need has been determined, and

taking into consideration the criteria and standards relating to relative need and affordability as

set forth in subsection (e) of this section and section 23-15-6(f).

      (3) At the conclusion of its review, the health services council shall make

recommendations to the state agency relative to approval or denial of the new institutional health

services or new health care equipment proposed; provided that:

      (i) The health services council shall recommend approval of only those proposals found

to be affordable in accordance with the provisions of section 23-15-6(f); and

      (ii) If the state agency proposes to render a decision that is contrary to the

recommendation of the health services council, the state agency must render its reasons for doing

so in writing.

      (g) Approval of new institutional health services or new health care equipment by the

state agency shall be subject to conditions that may be prescribed by rules and regulations

developed by the state agency with the advice of the health services council, but those conditions

must relate to the considerations enumerated in subsection (e) and to considerations that may be

established in regulations in accordance with subsection (e)(14).

      (h) The offering or developing of new institutional health services or health care

equipment by a health care facility without prior review by the health services council and

approval by the state agency shall be grounds for the imposition of licensure sanctions on the

facility, including denial, suspension, revocation, or curtailment or for imposition of any

monetary fines that may be statutorily permitted by virtue of individual health care facility

licensing statutes.

      (i) No government agency and no hospital or medical service corporation organized

under the laws of the state shall reimburse any health care facility or health care provider for the

costs associated with offering or developing new institutional health services or new health care

equipment unless the health care facility or health care provider has received the approval of the

state agency in accordance with this chapter. Government agencies and hospital and medical

service corporations organized under the laws of the state shall, during budget negotiations, hold

health care facilities and health care providers accountable to operating efficiencies claimed or

projected in proposals which receive the approval of the state agency in accordance with this

chapter.

      (j) In addition, the state agency shall not make grants to, enter into contracts with, or

recommend approval of the use of federal or state funds by any health care facility or health care

provider which proceeds with the offering or developing of new institutional health services or

new health care equipment after disapproval by the state agency.

     SECTION 2. Section 23-17-13 of the General Laws in Chapter 23-17 entitled "Licensing

of Health Care Facilities" is hereby amended to read as follows:

23-17-13. Health services council. -- There shall be established a health services council

consisting of twenty-two (22) twenty-four (24) members, eight (8) of whom shall be appointed by

the speaker of the house, one of whose appointments shall represent hospital service corporations,

six (6) of whom shall be appointed by the president of the senate, one of whose appointments

shall represent hospitals and a second of whose appointments shall represent the business

community, and eight (8) ten (10) of whom shall be appointed by the governor, one of whose

appoints shall represent the state budget office, and a second of whose appointment shall

represent the department of human services. and two (2) of whom shall be members of the

general public that maintain his or her principal residence within fifteen hundred feet (1500 ft.) of

a licensed hospital. The governor shall appoint members of the council in staggered

appointments, three (3) members one year, two (2) members the next year, and two (2) members

the year after that. All members shall serve until their successors are appointed and qualified. In

the month of February in each year, the governor shall appoint successors to the members of the

council whose terms shall expire in that year, to hold office commencing on the first day of

March in the year of appointment until the first day of March in the third year after appointment

or until their respective successors are appointed and qualified. Legislative members shall serve

until the end of their legislative term. Any vacancy of a member appointed which may occur in

the commission shall be filled by appointment by the respective appointing authority for the

remainder of the unexpired term. The council may also serve as an advisory council as authorized

by section 23-16-3.

     SECTION 3. This act shall take effect upon passage.

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LC00847/SUB A

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