District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0948 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	COUNCIL OF THE DISTRICT OF COLUMBIA
2	2	The John A. Wilson Building
3	3	1350 Pennsylvania Avenue, nw
4	4	Washington, D.C. 20004
5	5
6	6
7	7	Statement of Introduction on the
8	8	Certificate of Need Improvement Amendment Act of 2024
9	9	September 16, 2024
10	10
11	11	Today, along with Councilmembers Charles Allen, Anita Bonds, Janeese Lewis George,
12	12	and Zachary Parker, I am introducing the Certificate of Need Improvement Amendment Act of
13	13	2024. This bill aims to strengthen and modernize the process through which a new institutional
14	14	health service, or capital expenditure related to an existing medical/health asset, obtains a
15	15	Certificate of Need (CON) from the State Health Planning and Development Agency (SHPDA)
16	16	within DC Health. Although 35 states require CONs in some instances, the District’s requirements
17	17	are the third most extensive among U.S. states, covering 25 types of health care services. Many
18	18	health care providers in the District cite the CON process as an obstacle to improving and
19	19	expanding health care services for District residents, given the typical 6-9 month process and
20	20	significant associated expenses. This bill aims to strike a balance between maintaining the benefits
21	21	of the CON process, which include enforcing uncompensated care requirements and promoting
22	22	health equity, and removing unnecessary and burdensome obstacles for health care institutions and
23	23	providers.
24	24	The primary purpose of the CON process is to control the number of health care resources
25	25	in a given area, by requiring hospitals and health care systems to demonstrate the public need for
26	26	a new health care service, facility, or expenditure from the state before starting the project.
27	27	Although research has never shown that CONs control or reduce health care spending, CONs are
28	28	a primary tool for state governments to encourage health care services to be distributed equitably.
29	29	In the case of the District, CONs are one tool for DC Health to encourage health care services in
30	30	parts of the District with less access to health care, such as Wards 7 and 8. Additionally, CON
31	31	programs enable state governments to enforce uncompensated care requirements, and are also one
32	32	of the only tools for regulating corporate mergers and acquisitions, which have been shown to
33	33	increase healthcare spending.
34	34	This bill proposes several improvements to the District’s CON process:
35	35	1. Exempt Telehealth: The District is an outlier in its enforcement of the CON process,
36	36	which was created to regulate the geographic distribution of brick-and-mortar health care
37	37	services, for virtual provider networks and virtual telehealth platforms. The bill instead
38	38	requires DC Health to create a registration process for these entities.
39	39	2. Exempt office-based primary care and specialist practices: Only 2 other states regulate
40	40	primary care facilities under CON (NJ, KY) and only 2 other states regulate specialist
41	41	Christina Henderson Committee Member
42	42	Councilmember, At-Large Hospital and Health Equity
43	43	Chairperson, Committee on Health Judiciary and Public Safety
44	44	Transportation and the Environment
45	45	COUNCIL OF THE DISTRICT OF COLUMBIA
46	46	The John A. Wilson Building
47	47	1350 Pennsylvania Avenue, nw
48	48	Washington, D.C. 20004
49	49
50	50	practices with no operating rooms (VA, GA, KY). This would align the District with other
51	51	states and encourage more primary and specialist care services to locate in the District.
52	52	3. Require biennial updates to the capital thresholds: SHPDA currently has the authority
53	53	to update the capital expenditure thresholds that would trigger a CON review on an annual
54	54	basis, but this does not regularly occur. This bill would require SHPDA to update the
55	55	thresholds every 2 years to accurately reflect inflation and other economic indicators.
56	56	4. Exclude nonpatient care capital projects: Currently, health care facilities must submit
57	57	for CON review for capital projects not related to patient care, such as installing new
58	58	elevators, garage improvements, and HVAC upgrades. These reviews can delay necessary
59	59	repairs and upgrades and create unnecessary costs. This bill proposes exempting these
60	60	types of nonpatient care projects.
61	61	5. More flexible project timeline: Currently, SHPDA imposes a uniform deadline of 3 years
62	62	for CON approved capital projects. Facilities have had to restart the process when an active
63	63	project is taking longer than expected. This bill proposes a more flexible approach to extend
64	64	the timeline if the applicant is making good faith efforts to meet the schedule.
65	65	6. Define “Group practice”: Although the term “group practice” is used in the current D.C.
66	66	Code, it is not a defined term, which has led to confusion about when a new health care
67	67	facility must apply for a CON. This bill seeks to clearly define that term.
68	68	7. Adjust threshold for number of beds: Currently, SHPDA requires any facility changing
69	69	its licensed bed capacity to obtain a CON if the change is by at least 10 beds or 10% of
70	70	total beds, whichever is less. This bill proposes increasing the threshold to 10 beds or 20%
71	71	of total beds, to avoid small facilities going through a lengthy CON process for small
72	72	changes to their operations.
73	73
74	74	These proposed changes will encourage more health care facilities to enter and stay in the
75	75	District, bringing more jobs and health care access to our residents. I look forward to working with
76	76	my Council colleagues and other stakeholders to advance and pass this legislation. 1
77	77	1
78	78	____________________________ ______________________________ 2
79	79	Councilmember Charles Allen Councilmember Christina Henderson 3
80	80	4
81	81	5
82	82	____________________________ ______________________________ 6
83	83	Councilmember Zachary Parker Councilmember Janeese Lewis George 7
84	84	8
85	85	9
86	86	______________________________ 10
87	87	Councilmember Anita Bonds 11
88	88	12
89	89	13
90	90	A BILL 14
91	91	15
92	92	_________________ 16
93	93	17
94	94	18
95	95	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 19
96	96	20
97	97	_________________ 21
98	98	22
99	99	23
100	100	To amend the Health Services Planning Program Re-establishment Act of 1996 to exempt from 24
101	101	the certificate of need process digital-only telehealth platforms and providers and primary 25
102	102	care and specialty care providers not affiliated with hospitals and medical schools, to 26
103	103	define group practice and nonpatient care project, to remove the 3 year maximum on 27
104	104	certificate of need applications for active projects, to require the State Health Planning 28
105	105	and Development Agency to update the capital expenditure and medical equipment 29
106	106	spending thresholds every two years, to increase the number of beds that must be added 30
107	107	or removed at a health care facility in order to trigger a certificate of need, and to require 31
108	108	the Department of Health to create a registration process for facilities offering primary 32
109	109	and secondary care, virtual provider networks, and virtual telehealth platforms. 33
110	110	34
111	111	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 35
112	112	act may be cited as the “Certificate of Need Improvement Amendment Act of 2024.” 36
113	113	Sec. 2. The Health Services Planning Program Re-establishment Act of 1996, effective 37
114	114	April 9, 1997 (D.C. Law 11-191; D.C. Official Code § 44–401 et seq.), is amended as follows: 38
115	115	(a) Section 2 is amended as follows: 39
116	116	(1) Paragraph (3) is amended as follows: 40 2
117	117	(A) Subparagraph (A) is amended as follows: 41
118	118	(i) Sub-subparagraph (i) is amended by striking the phrase 42
119	119	“SHPDA may, by rule, adjust this threshold annually” and inserting the phrase “SHPDA shall, 43
120	120	by rule, adjust this threshold every 2 years” in its place. 44
121	121	(ii) Sub-subparagraph (ii) is amended by striking the phrase 45
122	122	“SHPDA may, by rule, adjust this threshold annually” and inserting the phrase “SHPDA shall, 46
123	123	by rule, adjust this threshold every 2 years” in its place. 47
124	124	(B) A new subparagraph (C) is added to read as follows: 48
125	125	“(C) The term “capital expenditure” does not include an expenditure on a 49
126	126	nonpatient care project.”. 50
127	127	(2) A new paragraph (9B) is added to read as follows: 51
128	128	“(9B) “Group practice” means: 52
129	129	“(A) A group of 2 or more health professionals, including a faculty practice 53
130	130	plan, legally organized and authorized to do business in the District of Columbia, for which: 54
131	131	“(i) Each member of the group is licensed to practice in the District 55
132	132	of Columbia and provides substantially the full range of services which the health professional 56
133	133	routinely provides, including medical care, consultation, diagnosis, or treatment, through the 57
134	134	joint use of shared office space, facilities, equipment and personnel, except surgery as defined at 58
135	135	D.C. Official Code § 44-501(13A); 59
136	136	“(ii) Substantially all of the services provided through the group are 60
137	137	billed under a billing number assigned to the group and amounts received are treated as revenue 61
138	138	of the group; 62 3
139	139	“(iii) The overhead expenses of and the income from the practice are 63
140	140	distributed in accordance with methods previously determined by group members; 64
141	141	“(iv) No member of the group directly or indirectly receives 65
142	142	compensation based on the volume or value of referrals by the health professional; and 66
143	143	“(v) Members of the group personally conduct no less than 75 67
144	144	percent of the patient encounters of the group practice. 68
145	145	“(B) In the case of a faculty practice plan associated with a hospital, 69
146	146	institution of higher education, or medical school with an approved medical residency training 70
147	147	program, paragraph (A) of this section shall only apply to the services provided within the 71
148	148	faculty practice plan.”. 72
149	149	(3) Paragraph (10) is amended to read as follows: 73
150	150	“(10) “Health care facility” or “HCF” means any private general hospital, 74
151	151	psychiatric hospital, other specialty hospital, rehabilitation facility, skilled nursing facility, 75
152	152	intermediate care facility, ambulatory care center or clinic, ambulatory surgical facility, kidney 76
153	153	disease treatment center, freestanding hemodialysis facility, diagnostic health care facility home 77
154	154	health agency, hospice, or other comparable health care facility which has an annual operating 78
155	155	budget of at least $500,000. The term “health care facility” shall not include the private office 79
156	156	facilities, clinics, or other establishments with no operating rooms where a health professional or 80
157	157	group of health professionals provides primary care services or specialty care services according 81
158	158	to the applicable scope of practice defined by their licensure; a virtual provider network or 82
159	159	virtual telehealth platform; or a health care facility licensed or to be licensed as a community 83
160	160	residence facility, or an Assisted Living Residence as defined by section 201 of the Assisted 84 4
161	161	Living Residence Regulatory Act of 2000, effective June 24, 2000 (D.C. Law 13-127; D.C. 85
162	162	Official Code § 44-102.01).”. 86
163	163	(4) Paragraph (12) is amended by striking the phrase “services provided by 87
164	164	physicians, dentists, HMOs, and other individual providers in individual or group practice.” and 88
165	165	inserting the phrase “services provided within private office facilities, clinics, or other 89
166	166	establishments with no operating rooms where a health professional or group of health 90
167	167	professionals provides primary care services or specialty care services according to the 91
168	168	applicable scope of practice defined by their licensure, or services provided by a virtual 92
169	169	provider network or accessed through a virtual telehealth platform.” in its place. 93
170	170	(5) Paragraph (14)(A)(i) is amended by striking the phrase “SHPDA may, by rule, 94
171	171	adjust this threshold annually” and inserting the phrase “SHPDA shall, by rule, adjust this 95
172	172	threshold every 2 years” in its place. 96
173	173	(6) Paragraph (15) is amended as follows: 97
174	174	(A) Subparagraph (A) is amended as follows: 98
175	175	(i) Sub-subparagraph (iii) is amended by striking the phrase “Any 99
176	176	new health service;” and inserting the phrase “Any new health service with a physical location;” 100
177	177	in its place. 101
178	178	(ii) Sub-subparagraph (iv) is amended by striking the phrase “or 102
179	179	10%” and insert the phrase “or 20%” in its place. 103
180	180	(B) Subparagraph (B) is amended by striking the phrase “SHPDA may, by 104
181	181	rule, adjust this threshold annually” and inserting the phrase “SHPDA shall, by rule, adjust this 105
182	182	threshold every 2 years” in its place. 106
183	183	(7) A new paragraph (15A) is added to read as follows: 107 5
184	184	“(15A) “Nonpatient care project” means any capital project by a healthcare facility or a 108
185	185	hospital that does not solely directly or indirectly impact clinical procedures, treatments, patient 109
186	186	interactions, or clinical areas. Nonpatient care projects can include the construction or renovation 110
187	187	of administrative offices; the purchase of non-medical equipment such as office furniture or IT 111
188	188	systems; renovation or replacement of electrical, heating, cooling and ventilation systems; 112
189	189	replacement or renovation of elevator and escalators or other means of ingress and egress; 113
190	190	renovation or replacement of fire and life safety systems; and other initiatives focused solely on 114
191	191	supporting the administrative functions of the facility.”. 115
192	192	(8) New paragraphs (21) and (22) are added to read as follows: 116
193	193	“(21) “Virtual provider network” means a provider-owned and managed entity which 117
194	194	employs or contracts with licensed health care providers, and which exclusively provides 118
195	195	telehealth or telemedicine health care services through a virtual telehealth platform. The term 119
196	196	“virtual provider network” does not mean an entity who maintains a physical facility, office, or 120
197	197	other similar location in any jurisdiction where a person may go to seek care in person. 121
198	198	“(22) “Virtual telehealth platform” means a digital-only telehealth or telemedicine entity 122
199	199	which facilitates the ability for District residents to access licensed health care providers by 123
200	200	exclusively providing health care services through a virtual provider network. The term “virtual 124
201	201	telehealth platform” does not mean an entity who maintains a physical facility, office, or other 125
202	202	similar location in any jurisdiction where a person may go to seek care in person.”. 126
203	203	(b) Section 3 is amended as follows: 127
204	204	(1) Subsection (b-1) is repealed. 128
205	205	(2) A new subsection b-2 is inserted to read as follows: 129 6
206	206	“(b-2)(1) The Director of the Department of Health shall create a registration process for 130
207	207	facilities offering primary care and specialty care services, virtual provider networks, and virtual 131
208	208	telehealth platforms operating in the District. 132
209	209	“(2) The registration process shall be consistent with and shall not create 133
210	210	requirements more restrictive than those set forth in the provisions contained in this Act.”. 134
211	211	(c) Section 8(b) is amended as follows: 135
212	212	(1) Paragraph (3) is amended by striking the phrase “requiring the obligation of a 136
213	213	capital expenditure of less than $8 million;” and inserting a semicolon in its place. 137
214	214	(2) A new paragraph (21) is added to read as follows: 138
215	215	“(21) Any proposal by a virtual telehealth platform or virtual provider network to 139
216	216	provide access to, offer, or develop health care services provided exclusively via a virtual 140
217	217	telehealth platform and accessible by District of Columbia residents.”. 141
218	218	(d) Section 12(a) is amended by striking the phrase “; except that no certificate of need 142
219	219	shall be effective for more than 3 years from the original date of issuance.” and inserting a period 143
220	220	in its place. 144
221	221	Sec. 3. Fiscal impact statement. 145
222	222	The Council adopts the fiscal impact statement in the committee report as the fiscal 146
223	223	impact statement required by section 4a of the General Legislative Procedures Act of 1975, 147
224	224	approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 148
225	225	Sec. 4. Effective date. 149
226	226	This act shall take effect following approval by the Mayor (or in the event of veto by the 150
227	227	Mayor, action by the Council to override the veto), a 30-day period of congressional review as 151
228	228	provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 152 7
229	229	24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and publication in the District of 153
230	230	Columbia Register. 154