March 18, 2010, Introduced by Senators BIRKHOLZ, ALLEN, JACOBS, GILBERT, PAPPAGEORGE, RICHARDVILLE, HARDIMAN, KAHN, HUNTER, GEORGE, CLARKE, GLEASON, SWITALSKI and BARCIA and referred to the Committee on Commerce and Tourism.
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 health facility that is relocating beds
from a licensed site to 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 health facility. As used in this subdivision, "health facility"
means that term as defined in section 22205(1)(a), (b), or (c).