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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.020 is amended to read as follows: 3
(1) The provisions of this chapter that relate to the issuance of a certificate of need shall 4
not apply to abortion facilities as defined in KRS 216B.015; any hospital which 5
does not charge its patients for hospital services and does not seek or accept 6
Medicare, Medicaid, or other financial support from the federal government or any 7
state government; assisted living residences; family care homes; state veterans' 8
nursing homes; services provided on a contractual basis in a rural primary-care 9
hospital as provided under KRS 216.380; community mental health centers for 10
services as defined in KRS Chapter 210; primary care centers; rural health clinics; 11
private duty nursing services operating as health care services agencies as defined 12
in KRS 216.718; group homes; licensed residential crisis stabilization units; 13
licensed free-standing residential substance use disorder treatment programs[ with 14
sixteen (16) or fewer beds, but not including Levels I and II psychiatric residential 15
treatment facilities or licensed psychiatric inpatient beds]; outpatient behavioral 16
health treatment, [but not ]including partial hospitalization programs; psychiatric 17
hospitals; physical rehabilitation hospitals; chemical dependency programs or 18
centers; home health agencies; kidney disease treatment centers; freestanding 19
hemodialysis units; alcohol abuse, drug abuse, rehabilitative, and mental health 20
services; end stage renal disease dialysis facilities, freestanding or hospital based; 21
swing beds; special clinics, including but not limited to wellness, weight loss, 22
family planning, disability determination, speech and hearing, counseling, 23
pulmonary care, and other clinics which only provide diagnostic services with 24
equipment not exceeding the major medical equipment cost threshold and for which 25
there are no review criteria in the state health plan; nonclinically related 26
expenditures; nursing home beds that shall be exclusively limited to on-campus 27 UNOFFICIAL COPY 25 RS BR 61
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residents of a certified continuing care retirement community; home health services 1
provided by a continuing care retirement community to its on-campus residents; the 2
relocation of hospital administrative or outpatient services into medical office 3
buildings which are on or contiguous to the premises of the hospital; the relocation 4
of acute care beds which occur among acute care hospitals under common 5
ownership and which are located in the same area development district so long as 6
there is no substantial change in services and the relocation does not result in the 7
establishment of a new service at the receiving hospital for which a certificate of 8
need is required; the redistribution of beds by licensure classification within an 9
acute care hospital so long as the redistribution does not increase the total licensed 10
bed capacity of the hospital; residential hospice facilities established by licensed 11
hospice programs; the following health services provided on site in an existing 12
health facility when the cost is less than six hundred thousand dollars ($600,000) 13
and the services are in place by December 30, 1991: psychiatric care where 14
chemical dependency services are provided, level one (1) and level two (2) of 15
neonatal care, cardiac catheterization, and open heart surgery where cardiac 16
catheterization services are in place as of July 15, 1990; or ambulance services 17
operating in accordance with subsection (6), (7), or (8) of this section. These listed 18
facilities or services shall be subject to licensure, when applicable. 19
(2) Nothing in this chapter shall be construed to authorize the licensure, supervision, 20
regulation, or control in any manner of: 21
(a) Private offices and clinics of physicians, dentists, and other practitioners of 22
the healing arts, except any physician's office that meets the criteria set forth 23
in KRS 216B.015(5) or that meets the definition of an ambulatory surgical 24
center as set out in KRS 216B.015; 25
(b) Office buildings built by or on behalf of a health facility for the exclusive use 26
of physicians, dentists, and other practitioners of the healing arts; unless the 27 UNOFFICIAL COPY 25 RS BR 61
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physician's office meets the criteria set forth in KRS 216B.015(5), or unless 1
the physician's office is also an abortion facility as defined in KRS 216B.015, 2
except no capital expenditure or expenses relating to any such building shall 3
be chargeable to or reimbursable as a cost for providing inpatient services 4
offered by a health facility; 5
(c) Outpatient health facilities or health services that: 6
1. Do not provide services or hold patients in the facility after midnight; 7
and 8
2. Are exempt from certificate of need and licensure under subsection (3) 9
of this section; 10
(d) Dispensaries and first-aid stations located within business or industrial 11
establishments maintained solely for the use of employees, if the facility does 12
not contain inpatient or resident beds for patients or employees who generally 13
remain in the facility for more than twenty-four (24) hours; 14
(e) Establishments, such as motels, hotels, and boarding houses, which provide 15
domiciliary and auxiliary commercial services, but do not provide any health 16
related services and boarding houses which are operated by persons 17
contracting with the United States Department of Veterans Affairs for 18
boarding services; 19
(f) The remedial care or treatment of residents or patients in any home or 20
institution conducted only for those who rely solely upon treatment by prayer 21
or spiritual means in accordance with the creed or tenets of any recognized 22
church or religious denomination and recognized by that church or 23
denomination; and 24
(g) On-duty police and fire department personnel assisting in emergency 25
situations by providing first aid or transportation when regular emergency 26
units licensed to provide first aid or transportation are unable to arrive at the 27 UNOFFICIAL COPY 25 RS BR 61
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scene of an emergency situation within a reasonable time. 1
(3) The following outpatient categories of care shall be exempt from certificate of need 2
and licensure on July 14, 2018: 3
(a) Primary care centers; 4
(b) Special health clinics, unless the clinic provides pain management services 5
and is located off the campus of the hospital that has majority ownership 6
interest; 7
(c) Specialized medical technology services, unless providing a State Health Plan 8
service; 9
(d) Retail-based health clinics and ambulatory care clinics that provide 10
nonemergency, noninvasive treatment of patients; 11
(e) Ambulatory care clinics treating minor illnesses and injuries; 12
(f) Mobile health services, unless providing a service in the State Health Plan; 13
(g) Rehabilitation agencies; 14
(h) Rural health clinics; and 15
(i) Off-campus, hospital-acquired physician practices. 16
(4) The exemptions established by subsections (2) and (3) of this section shall not 17
apply to the following categories of care: 18
(a) An ambulatory surgical center as defined by KRS 216B.015(4); 19
(b) A health facility or health service that provides one (1) of the following types 20
of services: 21
1. Cardiac catheterization; 22
2. Megavoltage radiation therapy; 23
3. Adult day health care; 24
4. [Behavioral health services; 25
5. Chronic renal dialysis; 26
6. ]Birthing services; or 27 UNOFFICIAL COPY 25 RS BR 61
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5.[7.] Emergency services above the level of treatment for minor illnesses or 1
injuries; 2
(c) A pain management facility as defined by KRS 218A.175(1); 3
(d) An abortion facility that requires licensure pursuant to KRS 216B.0431; or 4
(e) A health facility or health service that requests an expenditure that exceeds the 5
major medical expenditure minimum. 6
(5) An existing facility licensed as an intermediate care or nursing home shall notify 7
the cabinet of its intent to change to a nursing facility as defined in Public Law 100-8
203. A certificate of need shall not be required for conversion of an intermediate 9
care or nursing home to the nursing facility licensure category. 10
(6) Ambulance services owned and operated by a city government, which propose to 11
provide services in coterminous cities outside of the ambulance service's designated 12
geographic service area, shall not be required to obtain a certificate of need if the 13
governing body of the city in which the ambulance services are to be provided 14
enters into an agreement with the ambulance service to provide services in the city. 15
(7) Ambulance services owned by a hospital shall not be required to obtain a certificate 16
of need for the sole purpose of providing non-emergency and emergency transport 17
services originating from its hospital. 18
(8) (a) As used in this subsection, "emergency ambulance transport services" means 19
the transportation of an individual that has an emergency medical condition 20
with acute symptoms of sufficient severity that the absence of immediate 21
medical attention could reasonably be expected to place the individual's health 22
in serious jeopardy or result in the serious impairment or dysfunction of the 23
individual's bodily organs. 24
(b) A city or county government that has conducted a public hearing for the 25
purposes of demonstrating that an imperative need exists in the city or county 26
to provide emergency ambulance transport services within its jurisdictional 27 UNOFFICIAL COPY 25 RS BR 61
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boundaries shall not be required to obtain a certificate of need for the city or 1
county to: 2
1. Directly provide emergency ambulance transport services as defined in 3
this subsection within the city's or county's jurisdictional boundaries; or 4
2. Enter into a contract with a hospital or hospitals within its jurisdiction, 5
or within an adjoining county if there are no hospitals located within the 6
county, for the provision of emergency ambulance transport services as 7
defined in this subsection within the city's or county's jurisdictional 8
boundaries. 9
(c) Any license obtained under KRS Chapter 311A by a city or county for the 10
provision of ambulance services operating under a certificate of need 11
exclusion pursuant to this subsection shall be held exclusively by the city or 12
county government and shall not be transferrable to any other entity. 13
(d) Prior to obtaining the written agreement of a city, an ambulance service 14
operating under a county government certificate of need exclusion pursuant to 15
this subsection shall not provide emergency ambulance transport services 16
within the boundaries of any city that: 17
1. Possesses a certificate of need to provide emergency ambulance 18
services; 19
2. Has an agency or department thereof that holds a certificate of need to 20
provide emergency ambulance services; or 21
3. Is providing emergency ambulance transport services within its 22
jurisdictional boundaries pursuant to this subsection. 23
(9) (a) Except where a certificate of need is not required pursuant to subsection (6), 24
(7), or (8) of this section, the cabinet shall grant nonsubstantive review for a 25
certificate of need proposal to establish an ambulance service that is owned by 26
a: 27 UNOFFICIAL COPY 25 RS BR 61
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1. City government; 1
2. County government; or 2
3. Hospital, in accordance with paragraph (b) of this subsection. 3
(b) A notice shall be sent by the cabinet to all cities and counties that a certificate 4
of need proposal to establish an ambulance service has been submitted by a 5
hospital. The legislative bodies of the cities and counties affected by the 6
hospital's certificate of need proposal shall provide a response to the cabinet 7
within thirty (30) days of receiving the notice. The failure of a city or county 8
legislative body to respond to the notice shall be deemed to be support for the 9
proposal. 10
(c) An ambulance service established under this subsection shall not be 11
transferred to another entity that does not meet the requirements of paragraph 12
(a) of this subsection without first obtaining a substantive certificate of need. 13
(10) Notwithstanding any other provision of law, a continuing care retirement 14
community's nursing home beds shall not be certified as Medicaid eligible unless a 15
certificate of need has been issued authorizing applications for Medicaid 16
certification. The provisions of subsection (5) of this section notwithstanding, a 17
continuing care retirement community shall not change the level of care licensure 18
status of its beds without first obtaining a certificate of need. 19
(11) An ambulance service established under subsection (9) of this section shall not be 20
transferred to an entity that does not qualify under subsection (9) of this section 21
without first obtaining a substantive certificate of need. 22
(12) (a) The provisions of subsections (7), (8), and (9) of this section shall expire on 23
July 1, 2026. 24
(b) All actions taken by cities, counties, and hospitals, exemptions from obtaining 25
a certificate of need, and any certificate of need granted under subsections (7), 26
(8), and (9) of this section prior to July 1, 2026, shall remain in effect on and 27 UNOFFICIAL COPY 25 RS BR 61
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after July 1, 2026. 1
Section 2. KRS 216B.065 is amended to read as follows: 2
(1) As used in this section: 3
(a) "Health facility" does not include psychiatric hospitals, physical 4
rehabilitation hospitals, chemical dependency programs or centers, 5
community mental health centers, home health agencies, kidney disease 6
treatment centers, or freestanding hemodialysis units; and 7
(b) "Health services" does not include alcohol abuse, drug abuse, 8
rehabilitative, or mental health services. 9
(2) Before any person enters into a contractual agreement to acquire a licensed health 10
facility, the person shall notify the cabinet of the intent to acquire the facility or 11
major medical equipment and of the services to be offered in the facility and its bed 12
capacity or the use of the medical equipment. The notice shall be in writing and 13
shall be filed at least thirty (30) days prior to entry into a contract to acquire the 14
health facility or major medical equipment with respect to which the notice is given. 15
(3)[(2)] A certificate of need shall be required for the acquisition of a health facility or 16
major medical equipment, only if: 17
(a) The notice required in this section is not filed and the arrangement will 18
require the obligation of a capital expenditure which exceeds the capital 19
expenditure minimum; or 20
(b) The cabinet finds within thirty (30) days after the date it received notice that 21
the health services or bed capacity of the health facility will be substantially 22
changed in being acquired. 23
(4)[(3)] Donations, transfers, and leases of major medical equipment and health 24
facilities shall be considered acquisitions of equipment and facilities, and an 25
acquisition of medical equipment or a facility for less than fair market value shall 26
be considered an acquisition if the fair market value exceeds the expenditure 27 UNOFFICIAL COPY 25 RS BR 61
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minimum. 1
(5)[(4)] Before any health facility reduces or terminates a health service or reduces its 2
bed capacity, the facility shall notify the cabinet of its intent. The notice shall be in 3
writing and shall be filed at least thirty (30) days prior to the reduction or 4
termination. A certificate of need shall be required for the reduction or termination 5
only if the notice required in this section is not filed. 6
(6)[(5)] (a) Before acquiring or constructing an acute care hospital as defined in 7
KRS 216B.0425 that is required to be licensed under KRS 216B.042, the 8
University of Kentucky or the University of Louisville, or a medical system or 9
college or school of medicine affiliate thereof, shall first obtain the approval 10
of the General Assembly by means of an act or joint resolution explicitly 11
identifying and authorizing the acquisition or construction of the specific 12
acute care hospital. 13
(b) The approval required under paragraph (a) of this subsection shall be in 14
addition to any certificate of need required to acquire or construct an acute 15
care hospital. 16
(c) 1. Nothing in this subsection shall be interpreted or construed to apply to a 17
pediatric teaching hospital as defined in KRS 205.565. 18
2. Paragraph (a) of this subsection shall not apply to the acquisition or 19
construction of an acute care hospital within thirty (30) miles of the 20
affiliated university's primary academic campus. 21
3. After May 31, 2026, the acquisition or construction of an acute care 22
hospital valued at less than ten million dollars ($10,000,000) shall be 23
exempt from the provisions of paragraph (a) of this subsection. 24
Section 3. KRS 216.380 is amended to read as follows: 25
(1) The licensure category of critical access hospital is hereby created for existing 26
licensed acute-care hospitals which qualify under this section for that status. 27 UNOFFICIAL COPY 25 RS BR 61
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(2) It shall be unlawful to operate or maintain a critical access hospital without first 1
obtaining a license from the Cabinet for Health and Family Services. An acute-care 2
hospital converting to a critical access hospital shall not require a certificate of 3
need. A certificate of need shall not be required for services provided on a 4
contractual basis in a critical access hospital. A certificate of need shall not be 5
required for an existing critical access hospital to increase its acute-care bed 6
capacity to twenty-five (25) beds. 7
(3) Except as provided in subsection (4) of this section, only a hospital licensed as a 8
general acute-care hospital may be relicensed as a critical access hospital if: 9
(a) The hospital is located in a county in a rural area that is: 10
1. Located more than a thirty-five (35) mile drive, or, where the terrain is 11
mountainous or only secondary roads are available, located more than a 12
fifteen (15) mile drive, from another acute-care hospital or critical 13
access hospital; or 14
2. Certified by the secretary as a necessary provider of health care services 15
to area residents; 16
(b) For the purposes of paragraph (a) of this subsection, a hospital shall be 17
considered to be located in a rural area if the hospital is not in a county which 18
is part of a standard metropolitan statistical area, the hospital is located in a 19
rural census tract of a metropolitan statistical area as determined under the 20
most recent modification of the Goldsmith Modification, or is designated by 21
the state as a rural provider. The secretary shall designate a hospital as a rural 22
provider if the hospital is not located in a county which has the largest county 23
population of a standard metropolitan statistical area; 24
(c) Except as provided in paragraph (d) of this subsection, the hospital provides 25
not more than twenty-five (25) acute care inpatient beds for providing acute 26
inpatient care for a period that does not exceed, as determined on an annual, 27 UNOFFICIAL COPY 25 RS BR 61
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average basis, ninety-six (96) hours; 1
(d) If the hospital is operating swing beds under which the hospital's inpatient 2
hospital facilities are used for the provision of extended care services, the 3
hospital may be designated as a critical access hospital so long as the total 4
number of beds that may be used at any time for furnishing of either extended 5
care services or acute inpatient services does not exceed twenty-five (25) 6
beds. For the purposes of this section, any bed of a unit of the hospital that is 7
licensed as a nursing facility at the time the hospital applies to the state for 8
designation as a critical care access hospital shall not be counted. 9
(4) The secretary for health and family services may designate a facility as a critical 10
access hospital if the facility: 11
(a) Was a hospital that ceased operations on or after ten (10) years prior to April 12
21, 2000; or 13
(b) Was a hospital that was converted to a licensed ambulatory health center or 14
other type of licensed health clinic or health center and, as of the effective 15
date of that conversion, meets the criteria for licensure as a critical access 16
hospital under this subsection or subsection (3) of this section. 17
(5) A critical access hospital shall provide the following services: 18
(a) Twenty-four (24) hour emergency-room care that the secretary determines is 19
necessary for insuring access to emergency care services in each area served 20
by a critical access hospital; and 21
(b) Basic laboratory, radiologic, pharmacy, and dietary services. These services 22
may be provided on a part-time, off-site contractual basis. 23
(6) A critical access hospital may provide the following services: 24
(a) Swing beds or a distinct unit of the hospital which is a nursing facility in 25
accordance with KRS Chapter 216B and subject to approval under certificate 26
of need; 27 UNOFFICIAL COPY 25 RS BR 61
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(b) Surgery; 1
(c) Normal obstetrics; 2
(d) Primary care; 3
(e) Adult day health care; 4
(f) Respite care; 5
(g) Rehabilitative and therapeutic services including, but not limited to, physical 6
therapy, respiratory therapy, occupational therapy, speech pathology, and 7
audiology, which may be provided on an off-site contractual basis; 8
(h) Ambulatory care; 9
(i) Home health services[ which may be established upon obtaining a certificate 10
of need]; and 11
(j) Mobile diagnostic services with equipment not exceeding the major medical 12
equipment cost threshold pursuant to KRS Chapter 216B and for which there 13
are no review criteria in the State Health Plan. 14
(7) In addition to the services that may be provided under subsection (6) of this section, 15
a critical access hospital may establish the following units in accordance with 16
applicable Medicare regulations and subject to certificate of need approval: 17
(a) A psychiatric unit that is a distinct part of the hospital, with a maximum of ten 18
(10) beds; and 19
(b) A rehabilitation unit that is a distinct part of the hospital, with a maximum of 20
ten (10) beds notwithstanding any other bed limit contained in law or 21
regulation. 22
(8) Psychiatric unit and rehabilitation unit beds operated under subsection (7) of this 23
section shall not be counted in determining the number of beds or the average 24
length of stay of a critical access hospital for purposes of applying the bed and 25
average length of stay limitations under paragraph (c) of subsection (3) of this 26
section. 27 UNOFFICIAL COPY 25 RS BR 61
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(9) The following staffing plan shall apply to a critical access hospital: 1
(a) The hospital shall meet staffing requirements as would apply under section 2
1861(e) of Title XVIII of the Federal Social Security Act to a hospital located 3
in a rural area except that: 4
1. The hospital need not meet hospital standards relating to the number of 5
hours during a day, or days during a week, in which the hospital shall be 6
open and fully staffed, except insofar as the facility is required to make 7
available emergency services and nursing services available on a 8
twenty-four (24) hour basis; and 9
2. The hospital need not otherwise staff the facility except when an 10
inpatient is present; and 11
(b) Physician assistants and nurse practitioners may provide inpatient care within 12
the limits of their statutory scope of practice and with oversight by a physician 13
who is not required to be on-site at the hospital. 14
(10) A critical access hospital shall have a quality assessment and performance 15
improvement program and procedures for review of utilization of services. 16
(11) A critical access hospital shall have written contracts assuring the following 17
linkages: 18
(a) Secondary and tertiary hospital referral services which shall provide for the 19
transfer of a patient to the appropriate level of care and the transfer of patients 20
to the critical access hospital for recuperative care; 21
(b) Ambulance services; 22
(c) Home health services; and 23
(d) Nursing facility services if not provided on-site. 24
(12) If the critical access hospital is part of a rural health network, the hospital shall have 25
the following: 26
(a) An agreement for patient referral and transfer, development, and use of 27 UNOFFICIAL COPY 25 RS BR 61
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communications systems including telemetry and electronic sharing of patient 1
data, and emergency and nonemergency transportation; and 2
(b) An agreement for credentialing and quality assurance with a network hospital, 3
peer review organization, or other appropriate and qualified entity identified 4
in the state rural health plan. 5
(13) The Cabinet for Health and Family Services and any insurer or managed care 6
program for Medicaid recipients that contracts with the Department for Medicaid 7
Services for the receipt of Federal Social Security Act Title XIX funds shall provide 8
for reimbursement of services provided to Medicaid recipients in a critical access 9
hospital at rates that are at least equal to those established by the Federal Health 10
Care Financing Administration or Centers for Medicare and Medicaid Services for 11
Medicare reimbursement to a critical access hospital. 12
(14) The Cabinet for Health and Family Services shall promulgate administrative 13
regulations pursuant to KRS Chapter 13A necessary to implement this section. 14