THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MUNDY, DeLUCA, EACHUS, BELFANTI, BISHOP, BRENNAN, BUXTON, CALTAGIRONE, CARROLL, COHEN, DePASQUALE, FRANKEL, FREEMAN, GEORGE, GIBBONS, GINGRICH, GOODMAN, GRUCELA, HARKINS, HESS, HORNAMAN, JOSEPHS, KIRKLAND, KORTZ, KULA, MANDERINO, MANN, McGEEHAN, McILVAINE SMITH, PALLONE, PASHINSKI, SANTONI, SCAVELLO, SIPTROTH, K. SMITH, SOLOBAY, WALKO, WANSACZ AND WHEATLEY, FEBRUARY 4, 2009

REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 4, 2009  

AN ACT

Amending the act of July 19, 1979 (P.L.130, No.48), entitled "An

act relating to health care; prescribing the powers and

duties of the Department of Health; establishing and

providing the powers and duties of the State Health

Coordinating Council, health systems agencies and Health Care

Policy Board in the Department of Health, and State Health

Facility Hearing Board in the Department of Justice;

providing for certification of need of health care providers

and prescribing penalties," reenacting and amending

provisions relating to definitions, powers and duties of

Department of Health and State health services plan;

reenacting provisions relating to regulations; reenacting and

amending provisions relating to certificates of need and

issuance of license; prohibiting certain referrals and claims

of payment; and repealing sunset provisions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 103 of the act of July 19, 1979 (P.L.130,

No.48), known as the Health Care Facilities Act, amended

December 18, 1992 (P.L.1602, No.179) and October 16, 1998 (P.L.

777, No.95), is reenacted and amended to read:

Section 103.  Definitions.

The following words and phrases when used in this act shall

have, unless the context clearly indicates otherwise, the

meanings given to them in this section:

"Act."  The comprehensive Health Care Facilities Act.

"Board."  The Health Policy Board established under section

401.1.

"Certificate of need."  A notice of approval issued by the

[department] Department of Health under the provisions of this

act, including those notices of approval issued as an amendment

to an existing certificate of need.

"Certification of need (CON) review board."  The CON review

board which consists of technical experts in the fields of

medicine, health facility administration, health economics,

health care cost inflation and the like, including experts from

within the Commonwealth agencies, together with consumers of

health care, all of whom are appointed by the Secretary of

Health.

"Clinically related health service."  Certain diagnostic,

treatment or rehabilitative services as determined in section

701.

["Community-based health services planning committee."  A

committee established in accordance with procedures approved by

the Department of Health which includes representatives of local

or regional groups of consumers, business, labor, health care

providers, payors or other affected interests.]

"Conflict of interest."  [For the purpose of section 501,

the] The interest of any person, whether financial, by

association with, or as a contributor of money or time to, any

nonprofit corporation or other corporation, partnership,

association, or other organization, and whenever a person is a

director, officer or employee of such organization, but shall

not exist whenever the organization in which such person is

interested is being considered as part of a class or group for

whom regulations are being considered, if the material facts as

to the relationship or interest are disclosed or are known to

the board.

"Consumer."  A natural person who is not involved in the

provision of health services or health insurance. For the

purpose of this act, any person who holds a fiduciary position

in any health care facility, health maintenance organization or

third party payor shall not be considered a consumer.

"Council."  The Health Care Cost Containment Council.

"Department."  The Department of Health of the Commonwealth.

"Develop."  When used in connection with health services or

facilities, means to undertake those activities which on their

completion will result in the offer of a new health service or

the incurring of a financial obligation in relation to the

offering of such a service.

"Health care facility."  [For purposes of Chapter 7, any] A 

health care facility providing clinically related health

services, including, but not limited to, a general or special

hospital, including psychiatric hospitals, rehabilitation

hospitals, ambulatory surgical facilities, diagnostic imaging

centers, MRI facilities, long-term care nursing facilities,

cancer treatment centers using radiation therapy on an

ambulatory basis and inpatient drug and alcohol treatment

facilities, both profit and nonprofit and including those

operated by an agency or State or local government. The term

shall also include a hospice. The term shall not include an

office used primarily for the private or group practice by

health care practitioners where no reviewable clinically related

health service is offered, a facility providing treatment solely

on the basis of prayer or spiritual means in accordance with the

tenets of any church or religious denomination or a facility

conducted by a religious organization for the purpose of

providing health care services exclusively to clergy or other

persons in a religious profession who are members of the

religious denominations conducting the facility.

"Health care practitioner."  An individual who is authorized

to practice some component of the healing arts by a license,

permit, certificate or registration issued by a Commonwealth

licensing agency or board.

"Health care provider" or "provider."  An individual, a trust

or estate, a partnership, a corporation (including associations,

joint stock companies and insurance companies), the

Commonwealth, or a political subdivision or instrumentality

(including a municipal corporation or authority) thereof, that

operates a health care facility.

"Health planning area." A geographic area within the

Commonwealth designated by the Department of Health for purposes

of health planning.

"Hearing board."  The State Health Facility Hearing Board

created in the Office of General Counsel under the provisions of

this act.

"Interested person" or "person expressing an interest." [For

the purposes of Chapter 7, a] A member of the public who is to

be served by the proposed new health service in the area to be

served by the applicant, a health care facility or health

maintenance organization or any health care provider providing

similar services in the area to be served by the applicant or

who has received a certificate of need to provide services in

the area to be served by the applicant or who has formally filed

with the [department] Department of Health a letter of intent to

provide similar services in the area in which the proposed

service is to be offered or developed and any third party payor

of health services provided in that area who provides written

notice to the [department] Department of Health that the person

is interested in a specific certificate of need application

before the [department] Department of Health.

"Local review committee."  A committee established in

accordance with procedures approved by the Department of Health

which includes representatives of local or regional groups of

consumers, business, labor, health care providers, payors or

other affected interests.

"Offer."  Make provision for providing in a regular manner

and on an organized basis clinically related health services.

"Patient."  A natural person receiving health care in or from

a health care provider.

"Person."  A natural person, corporation (including

associations, joint stock companies and insurance companies),

partnership, trust, estate, association, the Commonwealth, and

any local governmental unit, authority and agency thereof.

"Policy board."  The Health Policy Board created in the

Department of Health under the provisions of this act.

"Public meeting."  A meeting open to the public where any

person has an opportunity to comment on a certificate of need

application or proposed State health [services] improvement plan

amendment.

"Secretary."  The Secretary of [the Department of] Health of

the Commonwealth of Pennsylvania.

["State health services plan."  A document developed by the

Department of Health, after consultation with the policy board

and approved by the Governor, that is consistent with section

401.3, that meets the current and projected needs of the

Commonwealth's citizens. The State health services plan shall

contain, in part, the standards and criteria against which

certificate of need applications are reviewed and upon which

decisions are based.]

"Third party payor."  A person who makes payments on behalf

of patients under compulsion of law or contract who does not

supply care or services as a health care provider or who is

engaged in issuing any policy or contract of individual or group

health insurance or hospital or medical service benefits. The

term shall not include the Federal, State, or any local

government unit, authority, or agency thereof or a health

maintenance organization.

Section 2.  Sections 201 and 401.3 of the act, amended or

added December 18, 1992 (P.L.1602, No.179), are reenacted and

amended to read:

Section 201.  Powers and duties of the department.

The Department of Health shall have the power and its duties

shall be:

(1)  To exercise exclusive jurisdiction over health care

providers in accordance with the provisions of this act.

(2)  To issue determinations of reviewability or

nonreviewability of certificate of need proposals.

(2.1)  To develop qualitative and quantitative standards

and criteria for the review and approval of certificate of

need applications.

(3)  To issue certificates of need and amended

certificates of need in accordance with the provisions of

this act.

(4)  To withdraw expired certificates of need.

(5)  To require, pursuant to regulation, submission of

periodic reports by providers of health services and other

persons subject to review respecting the development of

proposals subject to review.

[(6)  Upon consultation with the policy board, to

research, prepare and, after approval by the Governor,

publish, no later than 18 months after the effective date of

this act and annually thereafter, a revised State health

services plan for the Commonwealth as defined under this act.

Until the State health services plan as defined in section

401.3 is adopted, the department shall apply the State health

plan in existence on the effective date of this act, along

with any subsequent updates to that plan.]

(6.1)  To develop a certificate of need exceptions

process which permits exceptions to be granted to the

standards and criteria in order to reflect local experience

or ensure access or to respond to circumstances which pose a

threat to public health and safety. The exceptions process

shall begin only after the department issues a denial of a

certificate of need application. All exceptions must be

publicly disclosed. This provision creates no right or

entitlement to an exception.

(7)  To collect and disseminate such other information as

may be appropriate to determine the appropriate level of

facilities and services for the effective implementation of

certification of need under this act. Where such information

is collected by any other agency of State government,

duplication shall be avoided by coordination of data

collection activities[.], if such coordination does not

otherwise unduly burden those State agencies.

[(8)  To furnish such staff support and expertise to the

policy board as may be needed to perform its

responsibilities.]

(9)  To receive, log and review all applications for

certificates of need or amendments thereof and approve or

disapprove the same.

(10)  To minimize the administrative burden on health

care providers by eliminating unnecessary duplication of

financial and operational reports and to the extent possible

and without undue burden coordinating reviews and inspections

performed by Federal, State, local and private agencies.

(11)  To adopt and promulgate regulations necessary to

carry out the purposes and provisions of this act relating to

certificate of need.

(12)  To enforce the rules and regulations promulgated by

the department as provided in this act.

(13)  To provide technical assistance to individuals and

public and private entities in filling out the necessary

forms for the development of projects and programs.

(14)  To establish and publish in the Pennsylvania

Bulletin a fee schedule for certificate of need applications

and letters of intent in accordance with section 902.1.

(15)  To coordinate any data collection activities

necessary for administration of this act so as not to

duplicate unnecessarily the data collection activities of

other Federal and State agencies.

(16)  To modify the list of reviewable clinically related

health services established under section 701.

(17)  To establish and publish in the Pennsylvania

Bulletin a detailed schedule of the review process for each

certificate of need application submitted to the department.

Section 401.3.  State health [services] improvement plan.

The State health [services] improvement plan shall consist of

at a minimum:

(1)  An identification of the clinically related health

services necessary to serve the health needs of the

population of this Commonwealth, including those medically

underserved areas in rural and inner-city locations.

(2)  An analysis of the availability, accessibility and

affordability of the clinically related health services

necessary to meet the health needs of the population of this

Commonwealth.

[(3)  Qualitative and quantitative standards and criteria

for the review of certificate of need applications by the

department under this act.

(4)  An exceptions process which permits exceptions to be

granted to the standards and criteria in order to reflect

local experience or ensure access or to respond to

circumstances which pose a threat to public health and

safety.]

Section 3.  Section 602 of the act is reenacted to read:

Section 602.  Regulations.

The department is hereby authorized and empowered pursuant to

the provisions of this act to adopt rules and regulations

establishing procedures required by this act for administration

of certificate of need.

Section 4.  Sections 603, 701 and 702 of the act, amended

December 18, 1992 (P.L.1602, No.179), are reenacted and amended

to read:

Section 603.  Enforcement of orders relating to certificate of

need.

(a)  (1)  No certificate of need shall be granted to any

person for a health care facility or reviewable clinically

related health service unless such facility or clinically

related health service is found by the department and CON

review board to be needed.

(2)  No person shall offer or develop a health care

facility or reviewable clinically related health service

without obtaining a certificate of need as required by this

act.

(3)  No binding arrangement or commitment for financing

the offering or development of a health care facility or

reviewable clinically related health service shall be made by

any person unless a certificate of need for such clinically

related health service or facility has been granted in

accordance with this act.

(b)  Orders for which the time of appeal has expired shall be

enforced by the department and the CON review board in summary

proceedings or, when necessary, with the aid of the court.

(c)  No [collateral attack on any order, including] questions

relating to jurisdiction shall be permitted in the enforcement

proceeding, but such relief may be sought when such relief has

not been barred by the failure to take a timely appeal.

(d)  Any person operating a reviewable clinically related

health service or health care facility within this Commonwealth

for which no certificate of need has been obtained, after

service of a cease and desist order of the department, [or after

expiration of the time for appeal of any final order on appeal,

upon conviction thereof,] shall be [sentenced to pay] subject to 

a fine of not less than [$100] $1,000 or more than [$1,000]

$10,000 and costs of [prosecution] enforcement. Each day of

operating a clinically related health service or health care

facility after issuance of a cease and desist order shall

constitute a separate offense.

(e)  Any person who violates this act by failing to obtain a

certificate of need, by deviating from the provisions of the

certificate, by beginning construction, by providing services,

or by acquiring equipment after the expiration of a certificate

of need shall be subject to a penalty of not less than [$100]

$1,000 per day and not more than [$1,000] $10,000 per day. Each

day of each such violation shall be considered a separate

offense.

(f)  The department may seek injunctive relief to prevent

continuing violations of this act. In seeking such relief, the

department need not prove damages or irreparable harm.

(g)  No license to operate a health care facility or

reviewable clinically related health service by any person in

this Commonwealth shall be granted and any license issued shall

be void and of no effect as to any facility, organization,

service or part thereof for which a certificate of need is

required by this act and not granted.

Section 701.  Certificate of need required; clinically related

health services subject to review.

(a)  Any person, including, but not limited to, a health care

facility, health maintenance organization or health care

provider who offers, develops, constructs, renovates, expands or

otherwise establishes or undertakes to establish within the

State a clinically related health service that is included in

the department's list of reviewable services developed under

subsections (d) and (e) or a health care facility as defined in

section 103 must obtain a certificate of need from the

department and CON review board if one or more of the following

factors applies:

(1)  [The proposal requires a capital expenditure in

excess of $2,000,000 under] Under generally accepted

accounting principles, consistently applied[.], the proposal

requires a capital expenditure in excess of:

(i)  for a new high-cost technology or high-cost

replacement technology in any health care facility,

$500,000;

(ii)  for equipment or other facility improvements in

an ambulatory surgical facility, or in an office where

reviewable clinically related health care services are

offered, whether a free-standing facility or office

within a hospital, $1,000,000; or

(iii)  for any other hospital-based improvement,

$2,000,000.

(2)  The proposal involves the establishment of a health

care facility or a reviewable clinically related health

service.

(3)  The proposal increases the number of licensed beds

by more than ten beds or 10%, whichever is less, every two

years.

(i)  If the additional beds are acute care beds and

are not beds in a distinct-part psychiatric,

rehabilitation or long-term care unit, all licensed beds

of the acute-care facility shall be counted in

determining whether the increased number of beds exceeds

10%.

(ii)  If the additional beds are beds in a distinct-

part psychiatric, rehabilitation or long-term care unit

of an acute care facility, only the beds within that unit

shall be counted in determining whether the increased

number of beds exceeds 10%.

(iii)  If the additional beds are in a freestanding

psychiatric, rehabilitation or long-term care facility,

all licensed beds of the freestanding facility shall be

counted in determining whether the increased number of

beds exceeds 10%.

(4)  The proposal substantially expands an existing

clinically related health service as determined by the

department [in the State health services plan].

(b)  For the purposes of this act, an expenditure for the

purpose of acquiring an existing health care facility [or

replacement of equipment where there is no change in service]

shall not be considered to be a capital expenditure subject to

review. Expenditures for nonclinical activities or services,

such as parking garages, computer systems or refinancing of

debt, and research projects involving premarket approval of new

equipment shall not be subject to review.

(c)  The capital expenditure threshold identified in

subsection (a)(1) may be modified periodically by the department

to reflect any increase in the construction cost or other

factors influencing health care-related capital expenditures.

The department shall publish a modification of the expenditure

threshold through the regulatory review process.

(d)  A list of reviewable clinically related health services

shall be published by the department and the CON review board 

within 30 days of the effective date of this act and may be

modified by regulation on an annual basis. Exclusive of new

high-cost technology, the initial list published by the

department and the CON review board as required under this

subsection shall be no more extensive than those services

reviewable on the effective date of this act. Criteria for

inclusion of reviewable services shall include, but not be

limited to:

(1)  the quality of the service to be offered is likely

to be compromised through insufficient volumes or

utilization;

(2)  the service is dependent upon the availability of

scarce natural resources such as human organs;

(3)  the operating costs associated with the service are

reimbursed by major third party payors on a cost

reimbursement basis; or

(4)  the service involves the use of new technology.

(e)  Any changes to the list required under subsection (d)

and proposed by regulation shall be developed by the department

[after consultation with the policy board.] and the CON review

board.

(f)  A facility providing treatment solely on the basis of

prayer or spiritual means in accordance with the tenets of any

church or religious denomination or a facility conducted by a

religious organization for the purpose of providing health care

services exclusively to clergy or other persons in a religious

profession who are members of the religious denomination

conducting the facility shall not be considered to constitute a

health service subject to review under this act.

(g)  As used in this section, "new high-cost technology"

means new technological equipment with an aggregate purchase

cost of greater than $500,000. The department and the CON review

board shall consult with national medical and surgical

speciality organizations recognized by the American Board of

Medical Specialities (ABMS) and other nationally recognized

scientific resources in the determination of what constitutes

new technological equipment.

Section 702.  Certificates of need; notice of intent;

application; issuance.

(a)  Projects requiring a certificate of need shall, at the

earliest possible time in their planning, but not later than

April 1 of the calendar year prior to the year of the proposed

project start date, be submitted to the department and the CON

review board in a letter of intent in such detail advising of

the scope and nature of the project as required by regulations.

Within 30 days after receipt of the letter of intent, the

department and the CON review board shall inform the applicant

providing the letter of intent whether the proposed project is

subject to a certificate of need review or if additional

information is required to make that determination. If the

department [determines] and the CON review board determine that

the project is subject to a certificate of need review, the

project shall be subject to the remaining provisions of this

act.

(b)  A person desiring to obtain or amend a certificate of

need shall apply in writing to the department, supplying such

information as is required by the department and the CON review

board, including, but not limited to, a cost impact analysis as

further defined by the department in regulations implementing

this act, and certifying that all data, information and

statements are factual to the best of their knowledge,

information and belief. The department and the CON review board 

shall have 60 days after receipt of the application within which

to assess the application and in which to request specific

further information. If further information is requested, the

department and the CON review board shall complete its

preliminary assessment of the application within 45 days of

receipt of the same. No information shall be required that is

not specified in the rules and regulations promulgated by the

department.

(c)  Timely notice of the beginning of review of the

application by the department shall be published after

preliminary assessment of the application is completed by the

department and the CON review board. The "date of notification"

of the beginning of review shall be the date such notice is

sent, or the date such notice is published in the Pennsylvania

Bulletin or in a newspaper of general circulation, whichever is

latest.

(d)  The department and the CON review board shall approve or

disapprove the application within 90 days from the date of

notification of the beginning of the review unless the period

for review is extended by the applicant in writing.

(e)  (1)  Certificates of need shall be granted or refused by

the department. They shall not be conditioned upon the

applicant changing other aspects of its facilities or

services or requiring the applicant to meet other specified

requirements, and no such condition shall be imposed by the

department in granting or refusing approval of certificates

of need.

(2)  A certificate of need shall state the maximum amount

of expenditures which may be obligated under it and

applicants proceeding with an approved project may not exceed

this level of expenditure except as allowed under the

conditions and procedures established by the department

through regulation.

(f)  (1)  The department and the CON review board shall make

written findings which state the basis for any final decision

made by the department. Such findings shall be served upon

the applicant and provided to all persons expressing an

interest in the proceedings and shall be made available to

others upon written request.

(2)  All decisions of the department and the CON review

board shall be based solely on the record. No ex parte

contact regarding the application between any employee of the

department or the CON review board who exercises

responsibilities respecting the application and the

applicant, any person acting on behalf of the applicant or

any person opposed to the issuance of the certificate of need

shall occur after the commencement of a hearing on the

application and before a decision is made by the department.

(g)  Modification of the application at any stage of the

proceeding shall not extend the time limits provided by this act

unless the department and the CON review board expressly [finds]

find that the modification represents a substantial change in

the character of the application.

(h)  The responsibility of performing certificate of need

review may not be delegated by the department and the CON review

board. The department and the CON review board shall consider

recommendations of [one or more community-based health services

planning committees] the local review committees whose

localities are affected by specific applications in reviewing

the applications.

(i)  The department and the CON review board may provide that

categories of projects shall receive simultaneous and

comparative review.

(j)  Once the department and the CON review board have

finished the initial review of an application and determined

that the application shall be reviewed by a local review

committee, the department and the CON review board shall notify

the council in writing that a community review is pending and

request analyses to assist the review process. The council shall

offer its analyses to the department and the CON review board

prior to the completion of the review process. The department

and the CON review board shall share these analyses with the

local review committee. If the council determines that it does

not have the requisite data and information to provide analyses

to the department and the CON review board, the council shall

notify the department in writing. The department and the CON

review board shall notify the local review committee about the

council's determination. In carrying out its responsibilities,

the council shall have all the powers and duties of the council

enumerated by the act of July 8, 1986 (P.L.408, No.89), known as

the "Health Care Cost Containment Act."

Section 5.  Section 703 of the act, amended July 12, 1980

(P.L.655, No.136), is reenacted and amended to read:

Section 703.  Notice and hearings before [health systems

agencies] the department and CON review board.

(a)  Notice of completed applications for certificates of

need or amendment thereto and of the beginning of review shall

be published by the [health systems agency] department in the

appropriate news media and by the department in the Pennsylvania

Bulletin in accordance with 45 Pa.C.S. [Chap. 7B] Ch. 7 Subch. B 

(relating to publication of documents), and the [health systems

agency] department shall notify all affected persons with notice

of the schedule for review, the date by which a public hearing

must be demanded, and of the manner notice will be given of a

hearing, if one is to be held. Notice to affected persons (other

than members of the public who are to be served by the proposed

new institutional health service) shall be by mail (which may be

part of a newsletter). Members of the public may be notified

through newspapers of general circulation. Directly affected

persons may file objections within 15 days of such publication

with the [local health systems agency] department setting forth

specifically the reasons such objections were filed. Persons

filing the objections shall be parties to the proceeding, unless

and until such objections are withdrawn.

(b)  Affected persons may request a public hearing or the

[health systems agency] department may require a public hearing

during the course of such review. Fourteen days written notice

of the hearing shall be given to affected persons in the same

manner as a notice of a completed application is provided in

subsection (a). In the hearing, any person shall have the right

to be represented by counsel and to present oral or written

arguments and relevant evidence. Any person directly affected

may conduct reasonable questioning of persons who make relevant

factual allegations. A record of the hearing shall be

maintained.

Section 6.  Sections 704 and 705 of the act, amended December

18, 1992 (P.L.1602, No.179), are reenacted to read:

Section 704.  Notice of public meetings.

(a)  Notification of the beginning of review of a certificate

of need application shall be published by the department in the

appropriate news media and in the Pennsylvania Bulletin in

accordance with 45 Pa.C.S. Ch. 7 Subch. B (relating to

publication of documents). The notice shall identify the

schedule for review, the date by which a public meeting must be

requested and the manner in which notice will be given of a

meeting, if one is held.

(b)  Interested persons may request a public meeting within

15 days of publication, and the department shall hold such a

meeting or the department may require a public meeting during

the course of such review. The department shall publish written

notice of the meeting in the appropriate news media and the

Pennsylvania Bulletin at least 14 days prior to the public

meeting date. In the meeting, the applicant and any interested

person providing prior notice to the department shall have the

right to present oral or written comments and relevant evidence

on the application in the manner prescribed by the department.

The department shall prepare a transcript of the oral testimony

presented at the meeting. Meetings shall be held in accordance

with the guidelines and procedures established by the department

and published in the Pennsylvania Code as a statement of policy.

The department may require the applicant to provide copies of

the application to any interested person making a request for

such application, at the expense of the interested person.

(c)  The applicant may, for good cause shown, request in

writing a public hearing for the purpose of reconsideration of a

decision of the department within ten days of service of the

decision of the department. The department shall treat the

request in accordance with the provisions of 1 Pa. Code § 35.241

(relating to application for rehearing or reconsideration). The

department shall set forth the cause for the hearing and the

issues to be considered at such hearing. If such hearing is

granted, it shall be held no sooner than six days and no later

than 30 days after the notice to grant such a hearing and shall

be limited to the issues submitted for reconsideration. A

transcript shall be made of the hearing and a copy of the

transcript shall be provided at cost to the applicant. The

department shall affirm or reverse its decision and submit the

same to the person requesting the hearing within 30 days of the

conclusion of such hearing. Any change in the decision shall be

supported by the reasons for the change.

(d)  Where hearings under subsection (b) are held on more

than two days, consecutive days of hearings and intervening

weekends and holidays shall be excluded in calculating the time

permitted for the department to conduct its review, and, if

briefs are to be filed, ten days subsequent to the adjournment

of the hearing shall also be excluded.

Section 705.  Good cause.

Good cause shall be deemed to have been shown if:

(1)  there is significant, relevant information not

previously considered;

(2)  there is significant change in factors or

circumstances relied on in making the decision;

(3)  there has been material failure to comply with the

procedural requirements of this act; or

(4)  good cause is otherwise found to exist.

Section 7.  Sections 706, 707 and 708.1 of the act, amended

or added December 18, 1992 (P.L.1602, No.179), are reenacted and

amended to read:

Section 706.  Information during review.

During the course of review the department and the CON review

board shall upon request of any person set forth the status, any

findings made in the proceeding and other appropriate

information requested. The department and the CON review board 

may require such request in writing.

Section 707.  Criteria for review of applications for

certificates of need or amendments.

(a)  An application for certificate of need shall be

considered for approval when the department [determines] and the

CON review board determine that the application substantially

meets the requirements listed below:

(1)  There is need by the population served or to be

served by the proposed service or facility.

(2)  The proposed service or facility will provide care

consistent with quality standards established by the [State

health services plan] department.

(3)  The proposed service or facility will meet the

standards identified [in the State health services plan] by

the department for access to care by medically underserved

groups, including individuals eligible for medical assistance

and persons without health insurance.

(4)  The applicant has submitted a data-based cost

analysis that includes an analysis demonstrating that:

(i)  There is not a more appropriate, less costly or

more effective alternative method of providing the

proposed services.

(ii)  The service or facility is financially and

economically feasible, considering anticipated volume of

care and the availability of reasonable financing based

on information from the applicant and other sources

during the review process.

(iii)  The proposed service or facility will not have

an inappropriate, adverse impact on the overall level of

health care expenditures in the area.

(iv)  The proposed service or facility does not

adversely impact the maintenance and development of rural

and inner-city health services generally and, in

particular, those services provided by health care

providers which are based in rural and inner-city

locations and which have an established history of

providing services to medically underserved populations.

[(b)  The department shall issue a certificate of need if the

project substantially meets the criteria of subsection (a)(1),

(2) and (3) and the project is consistent with the State health

services plan unless the department can demonstrate:

(1)  There is a more appropriate, less costly or more

effective alternative method of providing the proposed

services.

(2)  The service or facility is not financially and

economically feasible, considering anticipated volume of care

and the availability of reasonable financing based on

information received from the applicant and other sources

during the review process.

(3)  The proposed service or facility will have an

inappropriate, adverse impact on the overall level of health

care expenditures in the area.

(4)  The proposed service or facility adversely impacts

the maintenance and development of rural and inner-city

health services generally and, in particular, those services

provided by health care providers which are based in rural

and inner-city locations and which have an established

history of providing services to medically underserved

populations.]

(c)  Notwithstanding the provisions of [subsections (a) and

(b)] subsection (a), applications for projects described in

subsection (d) shall be approved unless the department [finds]

and the CON review board find that the facility or service with

respect to such expenditure as proposed is not needed [or that

the project is not consistent with the State health services

plan]. An application made under this subsection shall be

approved only to the extent that the department [determines] and

the CON review board determine it is required to overcome the

conditions described in subsection (d).

(d)  Subject to the provisions of subsection (c),

[subsections (a) and (b)] subsection (a) shall not apply to

capital expenditures required to:

(1)  eliminate or prevent imminent safety hazards as a

result of violations of safety codes or regulations;

(2)  comply with State licensure standards; or

(3)  comply with accreditation standards, compliance with

which is required to receive reimbursement or payments under

Title XVIII or XIX of the Federal Social Security Act.

Section 708.1.  Monitoring certificate of need; expiration of a

certificate of need.

A certificate of need or an amendment to it shall expire two

years from the date issued unless substantially implemented, as

defined by regulation. The department and the CON review board 

may grant extensions for a specified time upon request of the

applicant and upon a showing that the applicant has or is making

a good faith effort to substantially implement the project. An

expired certificate of need shall be invalid, and no person may

proceed to undertake any activity pursuant to it for which a

certificate of need or amendment is required. The applicant

shall report to the department, on forms prescribed by the

department, the status of the project until such time as the

project is licensed or operational, if no license is required.

Section 8.  Section 709 of the act, amended December 18, 1992

(P.L.1602, No.179), is reenacted to read:

Section 709.  Emergencies.

Notwithstanding any other provision of this act, in the event

of an emergency the department may suspend the foregoing

application process and permit such steps to be taken as may be

required to meet the emergency including the replacement of

equipment or facilities.

Section 9.  Section 710 of the act is reenacted to read:

Section 710.  Notice of termination of services.

For informational purposes only, at least 30 days prior to

termination or substantial reduction of a service or a permanent

decrease in the bed complement, the provider shall notify the

[health systems agency and the] department of its intended

action.

Section 10.  Section 711 of the act, amended December 18,

1992 (P.L.1602, No.179), is reenacted and amended to read:

Section 711.  Review of activities.

(a)  The department and the CON review board shall prepare

and publish not less frequently than annually reports of reviews

conducted under this act, including a statement on the status of

each such review and of reviews completed by it and statements

of the decisions made in the course of such reviews since the

last report. The department and the CON review board shall also

make available to the general public for examination at

reasonable times of the business day all applications reviewed

by it. Such reports and applications shall be considered public

records.

(b)  The department's and the CON review board's report which

shall be submitted to the members of the Health and Welfare

Committees of the Senate and House of Representatives shall

contain the following information:

(1)  The volume of applications submitted, by project

type, their dollar value, and the numbers and costs

associated with those approved and those not approved.

(2)  The assessment of the extent of competition in

specific service sectors that guided decisions.

(3)  A detailed description of projects involving

nontraditional or innovative service delivery methods or

organizational arrangements and the decisions made on each of

these projects.

(4)  The average time for review, by level of review.

(5)  The fees collected for reviews and the cost of the

program.

Section 11.  Section 712 of the act, added July 12, 1980

(P.L.655, No.136) and repealed in part December 20, 1982 (P.L.

1409, No.326), is reenacted and amended to read:

Section 712.  Actions against violations of law and rules and

regulations[; bonds].

(a)  Whenever any person, regardless of whether such person

is a licensee, has willfully violated any of the provisions of

this act or the rules and regulations adopted thereunder, the

department may maintain any action in the name of the

Commonwealth for an injunction or other process restraining or

prohibiting such person from engaging in such activity.

Section 12.  Section 808 of the act, amended December 18,

1992 (P.L.1602, No.179) and July 7, 2006 (P.L.334, No.69), is

reenacted and amended to read:

Section 808.  Issuance of license.

(a)  Standards.--The department shall issue a license to a

health care provider when it is satisfied that the following

standards have been met:

(1)  that the health care provider is a responsible

person;

(2)  that the place to be used as a health care facility

is adequately constructed, equipped, maintained and operated

to safely and efficiently render the services offered;

(3)  that the health care facility provides safe and

efficient services which are adequate for the care, treatment

and comfort of the patients or residents of such facility;

(4)  that there is substantial compliance with the rules

and regulations adopted by the department pursuant to this

act; and

(5)  that a certificate of need has been issued if one is

necessary.

(b)  Separate and limited licenses.--Separate licenses shall

not be required for different services within a single health

care facility except that home health care, home care, hospice

or long-term nursing care will require separate licenses. A

limited license, excluding from its terms a particular service

or portion of a health care facility, may be issued under the

provisions of this act.

(c)  Addition of services.--When the certificate of need for

a facility is amended as to services which can be offered, the

department shall issue an appropriate license for those services

upon demonstration of compliance with licensure requirements.

(d)  Monitoring.--

(1)  One year after the certificate of need has been

issued, the department shall monitor quality of the facility

or service by requesting from the council relevant data,

which may include mortality rates and the number of

procedures performed.

(2)  If the department finds that the facility or service

is not meeting the standards set forth in subsection (a), the

department shall take disciplinary action pursuant to this

act and existing regulations.

Section 13.  The act is amended by adding a section to read:

Section 808.1.  Prohibition of referrals and claims of payment.

(a)  Referrals.--A provider may not:

(1)  Refer a person for treatment and services if the

provider has a financial interest with the person or in the

entity that receives the referral.

(2)  Enter into an arrangement or scheme, including, but

not limited to, a cross-referral arrangement, that the

provider knows or should know has a principal purpose of

assuring referrals by the provider to a particular entity

which, if the provider directly made referrals to the entity,

would be in violation of this act.

(b)  Claim for payment.--No claim for payment may be

presented by an entity to any individual, third-party payor or

other entity for a service furnished pursuant to conduct

prohibited under subsection (a).

(c)  Refund.--If an entity collects any amount that was

billed in violation of this section, the entity shall refund

that amount on a timely basis to the payor or individual.

Section 14.  Section 901 of the act, amended July 12, 1980

(P.L.655, No.136), is reenacted and amended to read:

Section 901.  Existing facilities and institutions.

(a)  (1)  No certificate of need shall be required for any

buildings, real property and equipment owned, leased or being

operated, or under contract for construction, purchase, or

lease and for all services being rendered by licensed or

approved providers [on April 1, 1980.] prior to the effective

date of this paragraph.

(2)  Nor shall a certificate of need be required for any

new institutional health services for which an approval has

been granted under section 1122 of the Social Security Act or

for which an application is found pursuant to such section to

be in conformity with the standards, criteria or plans to

which such section refers, or as to which the Federal

Secretary of Health and Human Services makes a finding that

reimbursement shall be granted.[: Provided, however, That

such approval is in force on August 1, 1980 or such

application shall have been filed prior to August 1, 1980 or

the acceptance of applications for reviews under this act,

whichever shall last occur.]

(b)  Existing facilities and institutions shall be required

to obtain a certificate of need for projects outlined in section

701.

Section 15.  Section 902.1 of the act, added December 18,

1992 (P.L.1602, No.179), is reenacted and amended to read:

Section 902.1.  Fees for review of certificate of need

applications.

(a)  The department shall charge a fee of [$150] $500 for

each letter of intent filed. The letter of intent fee shall be

deducted from the total application fee required under

subsection (b) if an application is submitted on the project

proposed in the letter of intent.

(b)  For each application the department shall charge a fee,

payable on submission of an application. The fee shall not be

less than $500 plus up to [$3] $10 per $1,000 of proposed

capital expenditure and shall not be more than [$20,000]

$50,000.

(c)  The department shall publish a fee schedule in the

Pennsylvania Bulletin which shall explain the procedure for

filing fees.

(d)  All fees payable under this section are due upon the

date of filing a letter of intent or application. If a person

fails to file the appropriate fee, all time frames required of

the department under this act, with respect to review of a

letter of intent or application, are suspended until the

applicable fee is paid in full.

(e)  Each local review committee may apply for up to $10,000

in funding from the department for administrative functions

associated with reviewing certificate of need proposals. This

funding is to be allocated from the Patient Safety Authority

appropriation.

Section 16.  Section 904.1 of the act, added December 18,

1992 (P.L.1602, No.179), is repealed:

[Section 904.1.  Sunset.

The authority, obligations and duties arising under Chapter 7

and all other provisions of this act pertaining to certificates

of need shall terminate four years after the effective date of

this section. Twelve months prior to this expiration, the

Legislative Budget and Finance Committee shall commence a review

of the impact of the certificate of need program on quality,

access and cost of health care services, including the costs of

appeals, reviewable under this act.]

Section 17.  This act shall take effect immediately.