Florida Senate - 2019 PROPOSED COMMITTEE SUBSTITUTE
Bill No. CS for SB 1712
Ì2094648Î209464
576-04096-19
Proposed Committee Substitute by the Committee on Appropriations
(Appropriations Subcommittee on Health and Human Services)
1 A bill to be entitled
2 An act relating to hospital licensure; amending s.
3 395.003, F.S.; deleting an obsolete provision;
4 providing applicability; requiring certain hospitals
5 licensed after a specified date to submit a notice to
6 the Agency for Health Care Administration which
7 contains specified information before filing for
8 approval of plans and specifications to establish a
9 new general hospital; prohibiting the agency from
10 licensing a new general hospital unless certain
11 criteria are met; requiring certain hospitals to
12 participate in the Medicaid program and the Medicare
13 program and to provide a certain amount of charity
14 care; defining the terms “charity care” and
15 “district”; providing a separate calculation of
16 required charity care for such hospitals located in a
17 medically underserved area; authorizing such hospitals
18 to provide a certain donation to the agency’s Grants
19 and Donations Trust Fund in lieu of providing the
20 required charity care; requiring such hospitals to
21 annually report compliance to the agency; requiring
22 the agency to impose a specified administrative fine
23 for noncompliance; requiring the agency to adopt
24 rules; repealing s. 395.6025, F.S., relating to rural
25 hospital replacement facilities; amending s. 408.032,
26 F.S.; revising the definition of the term “health care
27 facility” to eliminate a reference to long-term care
28 hospitals; deleting the definition of the term “long
29 term care hospital”; amending s. 408.034; authoring
30 the agency to issue a license to a general hospital
31 that has not been issued a certificate of need under
32 certain circumstances; amending s. 408.035, F.S.;
33 deleting provisions related to the agency’s
34 consideration and review of certificates of need for
35 general hospitals; amending s. 408.036, F.S.;
36 providing an exception for the construction or
37 establishment of a general hospital and the conversion
38 to a general hospital from certificate of need review
39 requirements; amending ss. 408.037 and 408.039, F.S.;
40 deleting provisions relating to certificate of need
41 applications for general hospitals; amending s.
42 408.040, F.S.; requiring the agency to assess a
43 specified administrative fine against the holder of a
44 certificate of need or the holder of an exemption
45 which fails to comply with specified conditions;
46 requiring a general hospital that was issued a
47 certificate of need with certain conditions to
48 continue to meet those conditions to maintain
49 licensure; amending s. 408.043, F.S.; deleting
50 provisions relating to certificates of need for
51 osteopathic acute care hospitals; prohibiting the
52 agency from initiating a review cycle or from
53 accepting letters of intent or applications for the
54 issuance of certificate of need for the new
55 construction or the establishment of a freestanding
56 hospital; requiring the agency to issue such a
57 certificate of need to certain applicants, regardless
58 of litigation status; providing applicability;
59 providing effective dates.
60
61 Be It Enacted by the Legislature of the State of Florida:
62
63 Section 1. Present subsections (8), (9), and (10) of
64 section 395.003, Florida Statutes, are redesignated as
65 subsections (9), (10), and (11), respectively, paragraph (c) of
66 subsection (1) and present subsections (9) and (10) of that
67 section are amended, and a new subsection (8) is added to that
68 section, to read:
69 395.003 Licensure; denial, suspension, and revocation.—
70 (1)
71 (c) Until July 1, 2006, additional emergency departments
72 located off the premises of licensed hospitals may not be
73 authorized by the agency.
74 (8) Applicable only to a general hospital that is, or will
75 be, newly licensed on or after July 1, 2019; that does not hold
76 a certificate of need issued by the agency; and that is not
77 replacing a currently operating general hospital located within
78 1 mile of the newly licensed hospital:
79 (a) When proposing a new general hospital project subject
80 to this subsection and before filing for approval of plans and
81 specifications under s. 395.0163, each prospective applicant for
82 licensure must submit a notice to the agency of its intent to
83 establish a newly licensed hospital which includes the location
84 for the proposed hospital, the number and types of beds to be
85 licensed, and the services that the hospital will offer.
86 (b) Other than a long-term care hospital, the agency may
87 not license a new general hospital subject to this subsection
88 unless:
89 1. The hospital has at least 100 beds and has intensive
90 care, progressive care, and medical-surgical beds. This
91 requirement does not apply if the hospital is a rural hospital,
92 as defined in s. 395.602, or is located in a medically
93 underserved area; and
94 2. The hospital has an onsite emergency department that
95 will operate 24 hours per day, 7 days per week.
96 (c) Each such hospital must participate in the state
97 Medicaid program and the Medicare program.
98 (d) Except as provided in paragraph (e), each such hospital
99 must provide charity care in an amount equal to or greater than
100 the district average for hospitals in the applicable district.
101 The agency shall adopt by rule a method for calculating the
102 district average for charity care for each district. For
103 purposes of this subsection, the term “charity care” has the
104 same meaning as in s. 409.911(1) and the term “district” has the
105 same meaning as in s. 408.032.
106 (e) If such a hospital is located in a medically
107 underserved area, the amount of charity care required to be
108 provided by the hospital under paragraph (d) is equivalent in
109 percentage to the medically underserved area’s Index of Medical
110 Underservice score as calculated by the federal Health Resources
111 and Services Administration within the Department of Health and
112 Human Services.
113 (f) In lieu of providing charity care under paragraph (d)
114 or paragraph (e), each such hospital may donate an amount
115 determined by the agency to be functionally equivalent to the
116 amounts required under those paragraphs to the agency’s Grants
117 and Donations Trust Fund.
118 (g) Each such hospital shall annually report to the agency
119 its compliance with paragraphs (c)-(f). Failure to report
120 compliance constitutes noncompliance. The agency shall assess an
121 administrative fine on a hospital that fails to comply with this
122 subsection in the amount of 1 percent of its net revenue for
123 each 0.5 percent of the required amount of charity care not
124 provided pursuant to paragraph (d) or paragraph (e) or the
125 required amount as determined by the agency pursuant to
126 paragraph (f).
127 (h) The agency shall adopt rules to implement this
128 subsection.
129 (10)(9) A hospital licensed as of June 1, 2004, is shall be
130 exempt from subsection (9) (8) as long as the hospital maintains
131 the same ownership, facility street address, and range of
132 services that were in existence on June 1, 2004. Any transfer of
133 beds, or other agreements that result in the establishment of a
134 hospital or hospital services within the intent of this section,
135 shall be subject to subsection (9) (8). Unless the hospital is
136 otherwise exempt under subsection (9) (8), the agency shall deny
137 or revoke the license of a hospital that violates any of the
138 criteria set forth in that subsection.
139 (11)(10) The agency may adopt rules implementing the
140 licensure requirements set forth in subsection (9) (8). Within
141 14 days after rendering its decision on a license application or
142 revocation, the agency shall publish its proposed decision in
143 the Florida Administrative Register. Within 21 days after
144 publication of the agency’s decision, any authorized person may
145 file a request for an administrative hearing. In administrative
146 proceedings challenging the approval, denial, or revocation of a
147 license pursuant to subsection (9) (8), the hearing must be
148 based on the facts and law existing at the time of the agency’s
149 proposed agency action. Existing hospitals may initiate or
150 intervene in an administrative hearing to approve, deny, or
151 revoke licensure under subsection (9) (8) based upon a showing
152 that an established program will be substantially affected by
153 the issuance or renewal of a license to a hospital within the
154 same district or service area.
155 Section 2. Section 395.6025, Florida Statutes, is repealed.
156 Section 3. Subsections (8) and (13) of section 408.032,
157 Florida Statutes, are amended to read:
158 408.032 Definitions relating to Health Facility and
159 Services Development Act.—As used in ss. 408.031-408.045, the
160 term:
161 (8) “Health care facility” means a hospital, long-term care
162 hospital, skilled nursing facility, hospice, or intermediate
163 care facility for the developmentally disabled. A facility
164 relying solely on spiritual means through prayer for healing is
165 not included as a health care facility.
166 (13) “Long-term care hospital” means a hospital licensed
167 under chapter 395 which meets the requirements of 42 C.F.R. s.
168 412.23(e) and seeks exclusion from the acute care Medicare
169 prospective payment system for inpatient hospital services.
170 Section 4. Subsection (2) of section 408.034, Florida
171 Statutes, is amended to read:
172 408.034 Duties and responsibilities of agency; rules.—
173 (2) In the exercise of its authority to issue licenses to
174 health care facilities and health service providers, as provided
175 under chapters 393 and 395 and parts II, IV, and VIII of chapter
176 400, the agency may not issue a license to any health care
177 facility or health service provider that fails to receive a
178 certificate of need or an exemption for the licensed facility or
179 service, except that the agency may issue a license to a general
180 hospital that has not been issued a certificate of need if that
181 hospital meets the criteria established in s. 395.003(8).
182 Section 5. Section 408.035, Florida Statutes, is amended to
183 read:
184 408.035 Review criteria.—
185 (1) The agency shall determine the reviewability of
186 applications and shall review applications for certificate-of
187 need determinations for health care facilities and health
188 services in context with the following criteria, except for
189 general hospitals as defined in s. 395.002:
190 (1)(a) The need for the health care facilities and health
191 services being proposed.
192 (2)(b) The availability, quality of care, accessibility,
193 and extent of utilization of existing health care facilities and
194 health services in the service district of the applicant.
195 (3)(c) The ability of the applicant to provide quality of
196 care and the applicant’s record of providing quality of care.
197 (4)(d) The availability of resources, including health
198 personnel, management personnel, and funds for capital and
199 operating expenditures, for project accomplishment and
200 operation.
201 (5)(e) The extent to which the proposed services will
202 enhance access to health care for residents of the service
203 district.
204 (6)(f) The immediate and long-term financial feasibility of
205 the proposal.
206 (7)(g) The extent to which the proposal will foster
207 competition that promotes quality and cost-effectiveness.
208 (8)(h) The costs and methods of the proposed construction,
209 including the costs and methods of energy provision and the
210 availability of alternative, less costly, or more effective
211 methods of construction.
212 (9)(i) The applicant’s past and proposed provision of
213 health care services to Medicaid patients and the medically
214 indigent.
215 (10)(j) The applicant’s designation as a Gold Seal Program
216 nursing facility pursuant to s. 400.235, when the applicant is
217 requesting additional nursing home beds at that facility.
218 (2) For a general hospital, the agency shall consider only
219 the criteria specified in paragraph (1)(a), paragraph (1)(b),
220 except for quality of care in paragraph (1)(b), and paragraphs
221 (1)(e), (g), and (i).
222 Section 6. Paragraphs (b) and (c) of subsection (1) of
223 section 408.036, Florida Statutes, are amended to read:
224 408.036 Projects subject to review; exemptions.—
225 (1) APPLICABILITY.—Unless exempt under subsection (3), all
226 health-care-related projects, as described in paragraphs (a)
227 (f), are subject to review and must file an application for a
228 certificate of need with the agency. The agency is exclusively
229 responsible for determining whether a health-care-related
230 project is subject to review under ss. 408.031-408.045.
231 (b) The new construction or establishment of additional
232 health care facilities, except for the construction of or
233 establishment of a general hospital or including a replacement
234 health care facility when the proposed project site is not
235 located on the same site as or within 1 mile of the existing
236 health care facility, if the number of beds in each licensed bed
237 category will not increase.
238 (c) The conversion from one type of health care facility to
239 another, including the conversion from a general hospital, a
240 specialty hospital, or a long-term care hospital, except that a
241 conversion to a general hospital is not subject to review if,
242 once converted, the hospital meets the licensure criteria in s.
243 395.003(8).
244 Section 7. Section 408.037, Florida Statutes, is amended to
245 read:
246 408.037 Application content.—
247 (1) Except as provided in subsection (2) for a general
248 hospital, An application for a certificate of need must contain:
249 (a) A detailed description of the proposed project and
250 statement of its purpose and need in relation to the district
251 health plan.
252 (b) A statement of the financial resources needed by and
253 available to the applicant to accomplish the proposed project.
254 This statement must include:
255 1. A complete listing of all capital projects, including
256 new health facility development projects and health facility
257 acquisitions applied for, pending, approved, or underway in any
258 state at the time of application, regardless of whether or not
259 that state has a certificate-of-need program or a capital
260 expenditure review program pursuant to s. 1122 of the Social
261 Security Act. The agency may, by rule, require less-detailed
262 information from major health care providers. This listing must
263 include the applicant’s actual or proposed financial commitment
264 to those projects and an assessment of their impact on the
265 applicant’s ability to provide the proposed project.
266 2. A detailed listing of the needed capital expenditures,
267 including sources of funds.
268 3. A detailed financial projection, including a statement
269 of the projected revenue and expenses for the first 2 years of
270 operation after completion of the proposed project. This
271 statement must include a detailed evaluation of the impact of
272 the proposed project on the cost of other services provided by
273 the applicant.
274 (c) An audited financial statement of the applicant or the
275 applicant’s parent corporation if audited financial statements
276 of the applicant do not exist. In an application submitted by an
277 existing health care facility, health maintenance organization,
278 or hospice, financial condition documentation must include, but
279 need not be limited to, a balance sheet and a profit-and-loss
280 statement of the 2 previous fiscal years’ operation.
281 (2) An application for a certificate of need for a general
282 hospital must contain a detailed description of the proposed
283 general hospital project and a statement of its purpose and the
284 needs it will meet. The proposed project’s location, as well as
285 its primary and secondary service areas, must be identified by
286 zip code. Primary service area is defined as the zip codes from
287 which the applicant projects that it will draw 75 percent of its
288 discharges. Secondary service area is defined as the zip codes
289 from which the applicant projects that it will draw its
290 remaining discharges. If, subsequent to issuance of a final
291 order approving the certificate of need, the proposed location
292 of the general hospital changes or the primary service area
293 materially changes, the agency shall revoke the certificate of
294 need. However, if the agency determines that such changes are
295 deemed to enhance access to hospital services in the service
296 district, the agency may permit such changes to occur. A party
297 participating in the administrative hearing regarding the
298 issuance of the certificate of need for a general hospital has
299 standing to participate in any subsequent proceeding regarding
300 the revocation of the certificate of need for a hospital for
301 which the location has changed or for which the primary service
302 area has materially changed. In addition, the application for
303 the certificate of need for a general hospital must include a
304 statement of intent that, if approved by final order of the
305 agency, the applicant shall within 120 days after issuance of
306 the final order or, if there is an appeal of the final order,
307 within 120 days after the issuance of the court’s mandate on
308 appeal, furnish satisfactory proof of the applicant’s financial
309 ability to operate. The agency shall establish documentation
310 requirements, to be completed by each applicant, which show
311 anticipated provider revenues and expenditures, the basis for
312 financing the anticipated cash-flow requirements of the
313 provider, and an applicant’s access to contingency financing. A
314 party participating in the administrative hearing regarding the
315 issuance of the certificate of need for a general hospital may
316 provide written comments concerning the adequacy of the
317 financial information provided, but such party does not have
318 standing to participate in an administrative proceeding
319 regarding proof of the applicant’s financial ability to operate.
320 The agency may require a licensee to provide proof of financial
321 ability to operate at any time if there is evidence of financial
322 instability, including, but not limited to, unpaid expenses
323 necessary for the basic operations of the provider.
324 (2)(3) The applicant must certify that it will license and
325 operate the health care facility. For an existing health care
326 facility, the applicant must be the licenseholder of the
327 facility.
328 Section 8. Paragraphs (c) and (d) of subsection (3),
329 paragraphs (b) and (c) of subsection (5), and paragraph (d) of
330 subsection (6) of section 408.039, Florida Statutes, are amended
331 to read:
332 408.039 Review process.—The review process for certificates
333 of need shall be as follows:
334 (3) APPLICATION PROCESSING.—
335 (c) Except for competing applicants, in order to be
336 eligible to challenge the agency decision on a general hospital
337 application under review pursuant to paragraph (5)(c), existing
338 hospitals must submit a detailed written statement of opposition
339 to the agency and to the applicant. The detailed written
340 statement must be received by the agency and the applicant
341 within 21 days after the general hospital application is deemed
342 complete and made available to the public.
343 (d) In those cases where a written statement of opposition
344 has been timely filed regarding a certificate of need
345 application for a general hospital, the applicant for the
346 general hospital may submit a written response to the agency.
347 Such response must be received by the agency within 10 days of
348 the written statement due date.
349 (5) ADMINISTRATIVE HEARINGS.—
350 (b) Hearings shall be held in Tallahassee unless the
351 administrative law judge determines that changing the location
352 will facilitate the proceedings. The agency shall assign
353 proceedings requiring hearings to the Division of Administrative
354 Hearings of the Department of Management Services within 10 days
355 after the time has expired for requesting a hearing. Except upon
356 unanimous consent of the parties or upon the granting by the
357 administrative law judge of a motion of continuance, hearings
358 shall commence within 60 days after the administrative law judge
359 has been assigned. For an application for a general hospital,
360 administrative hearings shall commence within 6 months after the
361 administrative law judge has been assigned, and a continuance
362 may not be granted absent a finding of extraordinary
363 circumstances by the administrative law judge. All parties,
364 except the agency, shall bear their own expense of preparing a
365 transcript. In any application for a certificate of need which
366 is referred to the Division of Administrative Hearings for
367 hearing, the administrative law judge shall complete and submit
368 to the parties a recommended order as provided in ss. 120.569
369 and 120.57. The recommended order shall be issued within 30 days
370 after the receipt of the proposed recommended orders or the
371 deadline for submission of such proposed recommended orders,
372 whichever is earlier. The division shall adopt procedures for
373 administrative hearings which shall maximize the use of
374 stipulated facts and shall provide for the admission of prepared
375 testimony.
376 (c) In administrative proceedings challenging the issuance
377 or denial of a certificate of need, only applicants considered
378 by the agency in the same batching cycle are entitled to a
379 comparative hearing on their applications. Existing health care
380 facilities may initiate or intervene in an administrative
381 hearing upon a showing that an established program will be
382 substantially affected by the issuance of any certificate of
383 need, whether reviewed under s. 408.036(1) or (2), to a
384 competing proposed facility or program within the same district.
385 With respect to an application for a general hospital, competing
386 applicants and only those existing hospitals that submitted a
387 detailed written statement of opposition to an application as
388 provided in this paragraph may initiate or intervene in an
389 administrative hearing. Such challenges to a general hospital
390 application shall be limited in scope to the issues raised in
391 the detailed written statement of opposition that was provided
392 to the agency. The administrative law judge may, upon a motion
393 showing good cause, expand the scope of the issues to be heard
394 at the hearing. Such motion shall include substantial and
395 detailed facts and reasons for failure to include such issues in
396 the original written statement of opposition.
397 (6) JUDICIAL REVIEW.—
398 (d) The party appealing a final order that grants a general
399 hospital certificate of need shall pay the appellee’s attorney’s
400 fees and costs, in an amount up to $1 million, from the
401 beginning of the original administrative action if the appealing
402 party loses the appeal, subject to the following limitations and
403 requirements:
404 1. The party appealing a final order must post a bond in
405 the amount of $1 million in order to maintain the appeal.
406 2. Except as provided under s. 120.595(5), in no event
407 shall the agency be held liable for any other party’s attorney’s
408 fees or costs.
409 Section 9. Subsection (1) of section 408.040, Florida
410 Statutes, is amended, to read:
411 408.040 Conditions and monitoring.—
412 (1)(a) The agency may issue a certificate of need, or an
413 exemption, predicated upon statements of intent expressed by an
414 applicant in the application for a certificate of need or an
415 exemption. Any conditions imposed on a certificate of need or an
416 exemption based on such statements of intent shall be stated on
417 the face of the certificate of need or in the exemption
418 approval.
419 (b) The agency may consider, in addition to the other
420 criteria specified in s. 408.035, a statement of intent by the
421 applicant that a specified percentage of the annual patient days
422 at the facility will be utilized by patients eligible for care
423 under Title XIX of the Social Security Act. Any certificate of
424 need issued to a nursing home in reliance upon an applicant’s
425 statements that a specified percentage of annual patient days
426 will be utilized by residents eligible for care under Title XIX
427 of the Social Security Act must include a statement that such
428 certification is a condition of issuance of the certificate of
429 need. The certificate-of-need program shall notify the Medicaid
430 program office and the Department of Elderly Affairs when it
431 imposes conditions as authorized in this paragraph in an area in
432 which a community diversion pilot project is implemented.
433 Effective July 1, 2012, the agency may not impose sanctions
434 related to patient day utilization by patients eligible for care
435 under Title XIX of the Social Security Act for nursing homes.
436 (c) A certificateholder or an exemption holder may apply to
437 the agency for a modification of conditions imposed under
438 paragraph (a) or paragraph (b). If the holder of a certificate
439 of need or an exemption demonstrates good cause why the
440 certificate or exemption should be modified, the agency shall
441 reissue the certificate of need or exemption with such
442 modifications as may be appropriate. The agency shall by rule
443 define the factors constituting good cause for modification.
444 (d) If the holder of a certificate of need or the holder of
445 an exemption fails to comply with a condition that is unrelated
446 to the provision of charity care or the provision of care under
447 the Florida Medicaid program upon which the issuance of the
448 certificate or exemption was predicated, the agency may assess
449 an administrative fine against the certificateholder or
450 exemption holder in an amount not to exceed $1,000 per failure
451 per day. If the holder of a certificate of need or the holder of
452 an exemption fails to comply with a condition related to the
453 provision of charity care or the provision of care under the
454 Florida Medicaid program upon which the issuance of the
455 certificate or exemption was predicated, the agency must assess
456 an administrative fine against the certificateholder or
457 exemption holder in the amount of $2,500 per day for each
458 instance of noncompliance. Failure to annually report compliance
459 with any condition upon which the issuance of the certificate or
460 exemption was predicated constitutes noncompliance. In assessing
461 the penalty, the agency shall take into account as mitigation
462 the degree of noncompliance. Proceeds of such penalties shall be
463 deposited in the Public Medical Assistance Trust Fund.
464 (e) A general hospital that was issued a certificate of
465 need with conditions imposed as described in paragraph (a) or
466 paragraph (b), relating to the provision of charity care or the
467 provision of care under the Florida Medicaid program, must
468 continue to meet those conditions to maintain licensure
469 regardless of the status of that hospital’s certificate of need
470 unless such conditions are modified by the agency pursuant to
471 paragraph (c).
472 Section 10. Subsection (1) of section 408.043, Florida
473 Statutes, is amended to read:
474 408.043 Special provisions.—
475 (1) OSTEOPATHIC ACUTE CARE HOSPITALS.—When an application
476 is made for a certificate of need to construct or to expand an
477 osteopathic acute care hospital, the need for such hospital
478 shall be determined on the basis of the need for and
479 availability of osteopathic services and osteopathic acute care
480 hospitals in the district. When a prior certificate of need to
481 establish an osteopathic acute care hospital has been issued in
482 a district, and the facility is no longer used for that purpose,
483 the agency may continue to count such facility and beds as an
484 existing osteopathic facility in any subsequent application for
485 construction of an osteopathic acute care hospital.
486 Section 11. Effective upon this act becoming a law:
487 (1) The Agency for Health Care Administration may not
488 initiate a review cycle or accept letters of intent or
489 applications for the issuance of a certificate of need for the
490 new construction or establishment of a freestanding general
491 hospital.
492 (2) The agency shall issue a certificate of need to any
493 pending applicant for a certificate of need for the new
494 construction of or establishment of a freestanding general
495 hospital:
496 (a) With intensive care, progressive care, and medical
497 surgical beds;
498 (b) With an onsite emergency department that will be
499 operational 24 hours per day, 7 days per week; and
500 (c) Whose application for a certificate of need has been
501 approved by the agency, regardless of the litigation status of
502 the application.
503 (3) For an applicant seeking a certificate of need for the
504 new construction or establishment of a freestanding general
505 hospital that does not meet the criteria in subsection (2),
506 including an applicant whose application is pending approval or
507 denial by the agency and an applicant whose application was
508 initially denied by the agency but such denial is under appeal,
509 ss. 395.6025, 408.032, 408.034, 408.035, 408.036, 408.037,
510 408.039, and 408.043, Florida Statutes (2018), and any rules
511 adopted thereunder remain in effect until such time as the
512 agency has either issued the applicant a certificate of need,
513 the agency has denied the application and all appeals of the
514 denial have been exhausted, or the application has been
515 withdrawn.
516 Section 12. Except as otherwise expressly provided in this
517 act and except for this section, which shall take effect upon
518 this act becoming a law, this act shall take effect July 1,
519 2019.