SB-1237, As Passed Senate, September 22, 2010

SUBSTITUTE FOR

SENATE BILL NO. 1237

     A bill to amend 1978 PA 368, entitled

"Public health code,"

by amending section 22225 (MCL 333.22225), as amended by 1993 PA

88.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 22225. (1) In order to be approved under this part, an

applicant for a certificate of need shall demonstrate to the

satisfaction of the department that the proposed project will meet

an unmet need in the area proposed to be served. An applicant shall

demonstrate the need for a proposed project by credible

documentation of compliance with the applicable certificate of need

review standards. If no certificate of need review standards are

applicable to the proposed project or to a portion of a proposed

project that is otherwise governed by this part, the applicant

shall demonstrate to the satisfaction of the department that an

unmet need for the proposed project or portion of the proposed

project exists by credible documentation that the proposed project

will be geographically accessible and efficiently and appropriately

utilized, in light of the type of project and the existing health

care system. Whether or not there are applicable certificate of

need review standards, in determining compliance with this

subsection, the department shall consider approved projects that

are not yet operational, proposed projects under appeal from a

final decision of the department, or proposed projects that are

pending final department decision.

     (2) If, and only if, the requirements of subsection (1) are

met, in order for an application to be approved under this part, an

applicant shall also demonstrate to the reasonable satisfaction of

the department all of the following:

     (a) With respect to the method proposed to meet the unmet need

identified under subsection (1), that the applicant has considered

alternatives to the proposed project and that, in light of the

alternatives available for consideration, the chosen alternative is

the most efficient and effective method of meeting that unmet need.

     (b) With respect to the financial aspects of the proposed

project, that each of the following is met:

     (i) The capital costs of the proposed project will result in

the least costly total annual operating costs.

     (ii) Funds are available to meet the capital and operating

needs of the proposed project.

     (iii) The proposed project utilizes the least costly method of

financing, in light of available alternatives.

     (iv) In the case of a construction project, the applicant

stipulates that the applicant will competitively bid capital

expenditures among qualified contractors or alternatively, the

applicant is proposing an alternative to competitive bidding that

will achieve substantially the same results as competitive bidding.

     (c) The proposed project will be delivered in compliance with

applicable operating standards and quality assurance standards

approved under section 22215(1)(b), including 1 or more of the

following:

     (i) Mechanisms for assuring appropriate utilization of the

project.

     (ii) Methods for evaluating the effectiveness of the project.

     (iii) Means of assuring delivery of the project by qualified

personnel and in compliance with applicable safety and operating

standards.

     (iv) Evidence of the current and historical compliance with

federal and state licensing and certification requirements in this

state by the applicant or the applicant's owner, or both, to the

degree determined appropriate by the commission in light of the

subject of the review standard.

     (v) Other criteria approved by the commission as appropriate

to evaluate the quality of the project.

     (d) The health services proposed in the project will be

delivered in a health facility that meets the criteria, if any,

established by the commission for determining health facility

viability, pursuant to this subdivision. The criteria shall be

proposed by the department and the office, and approved or

disapproved by the commission. At a minimum, the criteria shall

specify, to the extent applicable to the applicant, that an

applicant shall be considered viable by demonstrating at least 1 of

the following:

     (i) A minimum percentage occupancy of licensed beds.

     (ii) A minimum percentage of combined uncompensated discharges

and discharges under title XIX in the health facility's planning

area.

     (iii) A minimum percentage of the total discharges in the health

facility's planning area.

     (iv) Evidence that the health facility is the only provider in

the health facility's planning area of a service that is considered

essential by the commission.

     (v) An operating margin in an amount determined by the

commission.

     (vi) Other criteria approved by the commission as appropriate

for statewide application to determine health facility viability.

     (e) In the case of a nonprofit health facility, the health

facility is in fact governed by a body composed of a majority

consumer membership broadly representative of the population

served. In the case of a health facility sponsored by a religious

organization, or if the nature of the nonprofit health facility is

such that the legal rights of its owners or sponsors might be

impaired by a requirement as to the composition of its governing

body, an advisory board with majority consumer membership broadly

representative of the population served may be construed by the

department to be equivalent to the governing board described in

this subdivision, if the advisory board meets all of the following

requirements:

     (i) The role assigned to the advisory board is meaningful, as

determined by the department.

     (ii) The functions of the advisory board are clearly

prescribed.

     (iii) The advisory board is given an opportunity to influence

policy formulation by the legally recognized governing body, as

determined by the department.

     (f) In the case of a hospital licensed under part 215 that is

relocating beds from a licensed site to a licensed site in another

geographic location, the applicant submits evidence of adequate

access to public transportation services, to the degree determined

appropriate by the commission. The applicant may submit as evidence

under this subdivision a formal agreement with a public transit

agency servicing the area of the project that it will provide

public transportation services to the hospital.