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AN ACT relating to certificate of need. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 216B.040 is amended to read as follows: 3
(1) The cabinet shall have four (4) separate and distinct functions in administering this 4
chapter: 5
(a) To approve or deny certificates of need in accordance with the provisions of 6
this chapter, except as to those applications which have been granted 7
nonsubstantive review status by the cabinet; 8
(b) To issue and to revoke certificates of need; 9
(c) To provide a due process hearing and issue a final determination on all actions 10
by the cabinet to deny, revoke, modify, or suspend licenses of health facilities 11
and health services issued by the cabinet; and 12
(d) To enforce, through legal actions on its own motion, the provisions of this 13
chapter and its orders and decisions issued pursuant to its functions. 14
(2) The cabinet shall: 15
(a) Promulgate administrative regulations pursuant to the provisions of KRS 16
Chapter 13A: 17
1. To establish the certificate of need review procedures, including but not 18
limited to, application procedures, notice provisions, procedures for 19
review of completeness of applications, and timetables for review 20
cycles. 21
2. To establish criteria for issuance and denial of certificates of need which 22
shall be limited to the following considerations: 23
a. Consistency with plans. Each proposal approved by the cabinet 24
shall be consistent with the state health plan, and shall be subject 25
to biennial budget authorizations and limitations, and with 26
consideration given to the proposal's impact on health care costs in 27 UNOFFICIAL COPY 25 RS BR 62
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the Commonwealth. The state health plan shall contain a need 1
assessment for long-term care beds, which shall be based on a 2
statistically valid analysis of the present and future needs of the 3
state as a whole and counties individually. The need assessment 4
shall be applied uniformly to all areas of the state. The 5
methodology shall be reviewed and updated on an annual basis. 6
The long-term care bed need criteria in the state health plan or as 7
set forth by the appropriate certificate of need authority shall give 8
preference to conversion of personal care beds and acute care beds 9
to nursing facility beds, so long as the state health plan or the 10
appropriate certificate of need authority establishes a need in the 11
affected counties and the proposed conversions are more cost-12
effective than new construction. The fact that the state health plan 13
shall not address the specific type of proposal being reviewed shall 14
not constitute grounds for disapproval of the proposal. 15
Notwithstanding any other provision of law, the long-term care 16
bed need criteria in the state health plan or as set forth by the 17
appropriate certificate of need authority shall not consider, factor 18
in, or include any continuing care retirement community's nursing 19
home beds established under KRS 216B.015, 216B.020, 20
216B.330, and 216B.332; 21
b. Need and accessibility. The proposal shall meet an identified need 22
in a defined geographic area and be accessible to all residents of 23
the area. A defined geographic area shall be defined as the area the 24
proposal seeks to serve, including its demographics, and shall not 25
be limited to geographical boundaries; 26
c. Interrelationships and linkages. The proposal shall serve to 27 UNOFFICIAL COPY 25 RS BR 62
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accomplish appropriate and effective linkages with other services, 1
facilities, and elements of the health care system in the region and 2
state, accompanied by assurance of effort to achieve 3
comprehensive care, proper utilization of services, and efficient 4
functioning of the health care system; 5
d. Costs, economic feasibility, and resources availability. The 6
proposal, when measured against the cost of alternatives for 7
meeting needs, shall be judged to be an effective and economical 8
use of resources, not only of capital investment, but also ongoing 9
requirements for health manpower and operational financing; 10
e. Quality of services. The applicant shall be prepared to and capable 11
of undertaking and carrying out the responsibilities involved in the 12
proposal in a manner consistent with appropriate standards and 13
requirements assuring the provision of quality health care services, 14
as established by the cabinet; and 15
f. Hospital-based skilled nursing, intermediate care, and personal 16
care beds shall be considered by the cabinet in determining the 17
need for freestanding long-term care beds; and[.] 18
(b) Conduct public hearings, as requested by applicants for or holders of 19
certificates of need and licenses, in respect to certificate-of-need applications, 20
revocations of certificates of need, and denials, suspensions, modifications, or 21
revocations of licenses. 22
(3) The cabinet may: 23
(a) Issue other administrative regulations necessary for the proper administration 24
of this chapter; 25
(b) Administer oaths, issue subpoenas, subpoenas duces tecum, and all necessary 26
process in proceedings brought before or initiated by the cabinet, and the 27 UNOFFICIAL COPY 25 RS BR 62
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process shall extend to all parts of the Commonwealth. Service of process in 1
all proceedings brought before or initiated by the cabinet may be made by 2
certified mail, or in the same manner as other process in civil cases, as the 3
cabinet directs; 4
(c) Establish by promulgation of administrative regulation under KRS Chapter 5
13A reasonable application fees for certificates of need; 6
(d) Establish a mechanism for issuing advisory opinions to prospective applicants 7
for certificates of need regarding the requirements of a certificate of need; and 8
(e) Establish a mechanism for biennial review of projects for compliance with the 9
terms of the certificate of need. 10
Section 2. KRS 216B.062 is amended to read as follows: 11
(1) Applications for certificates of need shall be submitted according to timetables 12
established by the cabinet by promulgation of administrative regulation, pursuant to 13
the provisions of KRS Chapter 13A. The application for a certificate of need shall 14
include the name and business address of any owner, investor, or stockholder in the 15
project whose ownership interest is greater than ten percent (10%). Once an 16
application has been deemed complete pursuant to the cabinet's administrative 17
regulations, notice shall be given as provided by the regulations of the beginning of 18
the review, the proposed review schedule, and the right of applicants to request a 19
hearing. The review shall be deemed to commence on the date of notice. No review 20
shall take longer than ninety (90) days from the commencement of the review 21
unless the applicant agrees to a deferral of action. 22
(2) Applications proposing the same or similar types of services, facilities, or 23
equipment shall be batched for review purposes, excluding those granted 24
nonsubstantive review status. The cabinet shall by promulgation of administrative 25
regulation under KRS Chapter 13A establish appropriate batching groups to assure 26
that applications for each type of service, facility, or equipment will be eligible for 27 UNOFFICIAL COPY 25 RS BR 62
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consideration at set intervals. In each review batch, the cabinet shall review and, if 1
appropriate, compare all timely-filed applications proposing similar types of 2
services, facilities, or equipment in the same health service areas. 3
Section 3. KRS 216B.085 is amended to read as follows: 4
(1) Within fifteen (15) days of a cabinet decision regarding an application for a 5
certificate of need, an applicant[Any time no later than fifteen (15) days after the 6
date the review commences, any affected person] may request a public hearing. 7
Hearings shall be before a person designated by the secretary to serve as hearing 8
officer. The hearing officer shall be authorized to administer oaths, issue subpoenas, 9
subpoenas duces tecum, and all necessary process in the proceedings. 10
(2) If a hearing is requested, the secretary shall set a date, time, and place for a public 11
hearing. Reasonable notice of the hearing shall be given to applicants[all affected 12
persons] in accordance with administrative regulations promulgated by the cabinet. 13
(3) At the hearing, applicants[any party to the proceedings] shall have the right to be 14
represented by counsel, and to present oral or written arguments and evidence 15
relevant to the matter which is the subject of the hearing[, and may conduct 16
reasonable cross-examination under oath of persons who make factual allegations 17
relevant to such matters]. A full and complete record shall be maintained of the 18
hearing. 19
(4) Any decision of the cabinet to issue or deny a certificate of need shall be based 20
solely on the record established with regard to the matter. All decisions granting, 21
denying, or modifying a certificate of need shall be made by the cabinet in writing. 22
The cabinet shall notify the applicant[parties to the proceedings] of the decision 23
and the decision shall be final for purposes of judicial appeal unless a request for 24
reconsideration is filed by the applicant. An approved certificate of need shall be 25
issued forty (40) days after notice of the cabinet's decision[ unless a request for 26
reconsideration is filed or a judicial appeal is taken and issuance is enjoined by the 27 UNOFFICIAL COPY 25 RS BR 62
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court]. 1
Section 4. KRS 216B.090 is amended to read as follows: 2
(1) Applicants[Any party to the proceedings] may, for good cause shown, request in 3
writing a hearing for purposes of reconsideration of a decision of the cabinet 4
pertaining to a certificate of need or the revocation of a certificate of need under 5
procedures promulgated by administrative regulation. The request shall be filed 6
within fifteen (15) days of the notice of the decision. For purposes of this section 7
there shall be deemed to be "good cause shown" if the request for a public hearing: 8
(a) Presents significant, relevant information not previously available for 9
consideration by the cabinet; 10
(b) Demonstrates that there have been significant changes in the factors or 11
circumstances relied upon by the cabinet in reaching its decision; or 12
(c) Demonstrates that the cabinet has materially failed to follow its adopted 13
procedures in reaching its decision[; or 14
(d) States that a public hearing pursuant to KRS 216B.085 was not conducted 15
prior to a decision to deny a certificate of need]. 16
(2) If a public hearing is granted, it shall be held within thirty (30) days after the 17
decision to grant the request for reconsideration. The hearing shall be conducted in 18
accordance with the provisions of this chapter. The cabinet shall make its decision 19
on reconsideration and shall give notice thereof. The decision of the cabinet shall be 20
final for purposes of judicial appeal. An approved certificate of need shall be issued 21
forty (40) days after notice of the cabinet's decision unless a judicial appeal is taken 22
and issuance is enjoined by the court. 23
Section 5. KRS 216B.095 is amended to read as follows: 24
(1) An applicant may waive the procedures for formal review of an application for a 25
certificate of need and request a nonsubstantive review as provided below. The 26
cabinet may grant or deny nonsubstantive review status within ten (10) days of the 27 UNOFFICIAL COPY 25 RS BR 62
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date the application is deemed completed[ and shall give notice to all affected 1
persons of the decision to conduct a nonsubstantive review]. Any affected person 2
other than the applicant may request a hearing by filing a request with the cabinet 3
within ten (10) days of the notice to conduct a nonsubstantive review. As 4
applicable, hearings shall be conducted as provided in KRS 216B.085. Based solely 5
upon the record established with regard to the matter, the cabinet shall approve or 6
deny a certificate of need on all projects assigned nonsubstantive review status 7
within thirty-five (35) days of the determination of nonsubstantive review status. If 8
the application is denied nonsubstantive review status, it shall automatically be 9
placed in the formal review process. 10
(2) If a certificate of need is denied following a nonsubstantive review, the applicant 11
may request that the application be placed in the next cycle of the formal review 12
process. Nothing in this subsection shall require an applicant to pursue a formal 13
review before obtaining judicial review pursuant to KRS 216B.115. 14
(3) The cabinet may grant nonsubstantive review status to an application for a 15
certificate of need which is required: 16
(a) To change the location of a proposed health facility; 17
(b) To replace or relocate a licensed health facility, if there is no substantial 18
change in health services or substantial change in bed capacity; 19
(c) To replace or repair worn equipment if the worn equipment has been used by 20
the applicant in a health facility for five (5) years or more; 21
(d) For cost escalations; or 22
(e) In other circumstances the cabinet by administrative regulation may prescribe. 23
(4) Notwithstanding any other provision to the contrary in this chapter, the cabinet may 24
approve a certificate of need for a project required for the purposes set out in 25
subsection (3)(a) to (e) of this section, unless it finds the facility or service with 26
respect to which the capital expenditure is proposed to be made is not required; or 27 UNOFFICIAL COPY 25 RS BR 62
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to the extent the facility or services contemplated by the proposed capital 1
expenditure is addressed in the state health plan, the cabinet finds that the capital 2
expenditure is not consistent with the state health plan. 3
(5) The decision of the cabinet approving or denying a certificate of need pursuant to 4
this section shall be final for purposes of judicial appeal, unless the applicant 5
requests the application be placed in the formal review process. An approved 6
certificate shall be issued thirty (30) days after notice of the cabinet's decision, 7
unless a judicial appeal is taken and issuance is enjoined by the court. 8
(6) Notwithstanding any other provision of law, the cabinet shall not grant 9
nonsubstantive review status to a certificate of need application that indicates an 10
intent to apply for Medicaid certification of nursing home beds within a continuing 11
care retirement community established under KRS 216B.015, 216B.020, 216B.330, 12
and 216B.332. 13
(7) Notwithstanding any provision of state law or the state health plan promulgated by 14
administrative regulation in accordance with KRS 216B.040, the cabinet shall grant 15
nonsubstantive review for a certificate of need proposal to establish an ambulatory 16
surgical center if the applicant complies with the following: 17
(a) The applicant is an ambulatory surgical center that was organized and in 18
operation as the private office of a physician or physician group prior to 19
October 1, 2006; 20
(b) 1. The cabinet's general counsel has submitted a letter to the Accreditation 21
Association for Ambulatory Health Care advising that the cabinet does 22
not object to the applicant's parent company applying for and obtaining 23
Medicare certification; or 24
2. The applicant is an ambulatory surgical center that has received from the 25
cabinet a favorable advisory opinion dated June 14, 2005, confirming 26
that the applicant would be exempt from the certificate of need or 27 UNOFFICIAL COPY 25 RS BR 62
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licensure requirement; 1
(c) The applicant's ambulatory surgical center has been inspected and accredited 2
by the Accreditation Association for Ambulatory Health Care since December 3
31, 2006, and has maintained accreditation with that organization consistently 4
since that time; and 5
(d) The applicant was a party to litigation concerning the ambulatory surgical 6
center and physician office issue and, prior to July 12, 2012, obtained a Court 7
of Appeals ruling in its favor. 8
Section 6. KRS 216B.115 is amended to read as follows: 9
(1) An appeal to the Franklin Circuit Court may be taken from any final decision of the 10
cabinet with respect to a certificate-of-need application, a certificate of need, or a 11
license, by an applicant[any party to the proceedings]. 12
(2) An appeal may be taken by filing a petition for review in the Franklin Circuit Court 13
within thirty (30) days after notice of the final decision unless a request for 14
reconsideration has been filed, in which case the petition shall be filed within 15
fifteen (15) days of the cabinet's decision not to reconsider or notice of its decision 16
on reconsideration. The petition shall state completely the grounds upon which the 17
review is sought and shall assign all errors relied upon. The petitioner shall serve a 18
copy of the petition to each person who was a party to the proceedings. Summons 19
shall be issued upon the petition directing the adverse party or parties to file an 20
answer within twenty (20) days after service of summons. The cabinet shall, upon 21
being served with the summons and within thirty (30) days thereafter, file a copy of 22
the record, duly certified by the secretary, the cost of the record to be taxed as costs 23
upon appeal. In lieu of filing of the record, an abstract thereof may be filed if all 24
parties to the appeal agree. 25