Florida Senate - 2019                                    SB 1712
       By Senator Harrell
       25-01997-19                                           20191712__
    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         requiring hospitals licensed after a specified date to
    5         participate in the Medicaid program as a provider of
    6         medical assistance and provide a certain amount of
    7         charity care; providing a separate calculation of
    8         required charity care for such hospitals located in a
    9         medically underserved area; authorizing such hospitals
   10         to provide a certain donation the Agency for Health
   11         Care Administration’s Grants and Donations Trust Fund
   12         in lieu of providing the required charity care;
   13         requiring such hospitals to annually report compliance
   14         to the agency; requiring the agency to impose a
   15         specified administrative fine for noncompliance;
   16         conforming cross-references; amending s. 395.0191,
   17         F.S.; deleting a provision relating to certificates of
   18         need for hospitals; amending s. 395.1055, F.S.;
   19         deleting a provision requiring hospitals to submit
   20         data to the agency in the certificate-of-need review
   21         process; repealing s. 395.6025, F.S., relating to
   22         rural hospital replacement facilities; amending s.
   23         408.032, F.S.; revising the definition of the term
   24         “health care facility” to exclude hospitals and long
   25         term care hospitals for purposes of the Health
   26         Facility and Services Development Act; deleting the
   27         definitions of the terms “hospital” and “long-term
   28         care hospital”; amending s. 408.034; conforming a
   29         provision to changes made by the act; amending ss.
   30         408.035 and 408.036, F.S.; deleting provisions related
   31         to the agency’s consideration and review of
   32         certificates of need for general hospitals, specialty
   33         hospitals, and long-term care hospitals; amending ss.
   34         408.037, and 408.039, F.S.; deleting provisions
   35         relating to certificate of need applications for
   36         general hospitals; amending s. 408.040, F.S.;
   37         requiring the agency to assess a specified
   38         administrative fine against the holder of a
   39         certificate of need or the holder of an exemption that
   40         fails to comply with specified conditions; amending s.
   41         408.043, F.S.; deleting provisions relating to
   42         certificates of need for osteopathic acute care
   43         hospitals; amending s. 395.1065, F.S.; conforming a
   44         cross-reference; providing an effective date.
   46  Be It Enacted by the Legislature of the State of Florida:
   48         Section 1. Present subsections (8), (9), and (10) of
   49  section 395.003, Florida Statutes, are redesignated as
   50  subsections (9), (10), and (11), respectively, paragraph (c) of
   51  subsection (1) and present subsections (9) and (10) of that
   52  section are amended, and a new subsection (8) is added to that
   53  section, to read:
   54         395.003 Licensure; denial, suspension, and revocation.—
   55         (1)
   56         (c) Until July 1, 2006, additional emergency departments
   57  located off the premises of licensed hospitals may not be
   58  authorized by the agency.
   59         (8)Applicable only to a hospital licensed on or after July
   60  1, 2019:
   61         (a) Each such hospital must participate in the Medicaid
   62  program as a provider of medical assistance.
   63         (b) Except as provided in paragraph (c), each such hospital
   64  must provide charity care in an amount equal to or greater than
   65  the applicable district average among licensed providers of
   66  similar services. For purposes of this subsection, the term
   67  “charity care” means uncompensated care delivered to uninsured
   68  patients having incomes at or below 200 percent of the federal
   69  poverty level when such services are preauthorized by the
   70  licensee and not subject to collection procedures, and
   71  “district” has the same meaning as in s. 408.032(5). The
   72  valuation of charity care must be based on Medicaid
   73  reimbursement rates.
   74         (c) If such a hospital is located in a medically
   75  underserved area, the amount of charity care required to be
   76  provided by the hospital under paragraph (b) is equivalent in
   77  percentage to the medically underserved area’s Index of Medical
   78  Underservice score as calculated by the federal Health Resources
   79  and Services Administration within the Department of Health and
   80  Human Services.
   81         (d) In lieu of providing charity care under paragraph (b)
   82  or paragraph (c), each such hospital may donate an amount
   83  determined by the agency to be functionally equivalent to the
   84  amounts required under those paragraphs to the agency’s Grants
   85  and Donations Trust Fund.
   86         (e) Each such hospital shall annually report to the agency
   87  its compliance with this subsection. Failure to report
   88  compliance constitutes noncompliance. The agency shall assess an
   89  administrative fine on a hospital that fails to comply with this
   90  subsection in the amount of 1 percent of its net revenue for
   91  each 0.5 percent of the required amount of charity care that was
   92  not provided pursuant to paragraph (b) or paragraph (c) or the
   93  required amount as determined by the agency pursuant to
   94  paragraph (d).
   95         (10)(9) A hospital licensed as of June 1, 2004, is shall be
   96  exempt from subsection (9)(8) as long as the hospital maintains
   97  the same ownership, facility street address, and range of
   98  services that were in existence on June 1, 2004. Any transfer of
   99  beds, or other agreements that result in the establishment of a
  100  hospital or hospital services within the intent of this section,
  101  shall be subject to subsection (9)(8). Unless the hospital is
  102  otherwise exempt under subsection (9)(8), the agency shall deny
  103  or revoke the license of a hospital that violates any of the
  104  criteria set forth in that subsection.
  105         (11)(10) The agency may adopt rules implementing the
  106  licensure requirements set forth in subsection (9)(8). Within 14
  107  days after rendering its decision on a license application or
  108  revocation, the agency shall publish its proposed decision in
  109  the Florida Administrative Register. Within 21 days after
  110  publication of the agency’s decision, any authorized person may
  111  file a request for an administrative hearing. In administrative
  112  proceedings challenging the approval, denial, or revocation of a
  113  license pursuant to subsection (9)(8), the hearing must be based
  114  on the facts and law existing at the time of the agency’s
  115  proposed agency action. Existing hospitals may initiate or
  116  intervene in an administrative hearing to approve, deny, or
  117  revoke licensure under subsection (9)(8) based upon a showing
  118  that an established program will be substantially affected by
  119  the issuance or renewal of a license to a hospital within the
  120  same district or service area.
  121         Section 2. Subsection (10) of section 395.0191, Florida
  122  Statutes, is amended to read:
  123         395.0191 Staff membership and clinical privileges.—
  124         (10) Nothing herein shall be construed by the agency as
  125  requiring an applicant for a certificate of need to establish
  126  proof of discrimination in the granting of or denial of hospital
  127  staff membership or clinical privileges as a precondition to
  128  obtaining such certificate of need under the provisions of s.
  129  408.043.
  130         Section 3. Paragraph (f) of subsection (1) of section
  131  395.1055, Florida Statutes, is amended to read:
  132         395.1055 Rules and enforcement.—
  133         (1) The agency shall adopt rules pursuant to ss. 120.536(1)
  134  and 120.54 to implement the provisions of this part, which shall
  135  include reasonable and fair minimum standards for ensuring that:
  136         (f) All hospitals submit such data as necessary to conduct
  137  certificate-of-need reviews required under part I of chapter
  138  408. Such data shall include, but shall not be limited to,
  139  patient origin data, hospital utilization data, type of service
  140  reporting, and facility staffing data. The agency may not
  141  collect data that identifies or could disclose the identity of
  142  individual patients. The agency shall utilize existing uniform
  143  statewide data sources when available and shall minimize
  144  reporting costs to hospitals.
  145         Section 4. Section 395.6025, Florida Statutes, is repealed.
  146         Section 5. Subsections (8), (11), and (13) of section
  147  408.032, Florida Statutes, are amended to read:
  148         408.032 Definitions relating to Health Facility and
  149  Services Development Act.—As used in ss. 408.031-408.045, the
  150  term:
  151         (8) “Health care facility” means a hospital, long-term care
  152  hospital, skilled nursing facility, hospice, or intermediate
  153  care facility for the developmentally disabled. A facility
  154  relying solely on spiritual means through prayer for healing is
  155  not included as a health care facility.
  156         (11) “Hospital” means a health care facility licensed under
  157  chapter 395.
  158         (13) “Long-term care hospital” means a hospital licensed
  159  under chapter 395 which meets the requirements of 42 C.F.R. s.
  160  412.23(e) and seeks exclusion from the acute care Medicare
  161  prospective payment system for inpatient hospital services.
  162         Section 6. Subsection (2) of section 408.034, Florida
  163  Statutes, is amended to read:
  164         408.034 Duties and responsibilities of agency; rules.—
  165         (2) In the exercise of its authority to issue licenses to
  166  health care facilities and health service providers, as provided
  167  under chapter chapters 393 and 395 and parts II, IV, and VIII of
  168  chapter 400, the agency may not issue a license to any health
  169  care facility or health service provider that fails to receive a
  170  certificate of need or an exemption for the licensed facility or
  171  service.
  172         Section 7. Section 408.035, Florida Statutes, is amended to
  173  read:
  174         408.035 Review criteria.—
  175         (1) The agency shall determine the reviewability of
  176  applications and shall review applications for certificate-of
  177  need determinations for health care facilities and health
  178  services in context with the following criteria, except for
  179  general hospitals as defined in s. 395.002:
  180         (1)(a) The need for the health care facilities and health
  181  services being proposed.
  182         (2)(b) The availability, quality of care, accessibility,
  183  and extent of utilization of existing health care facilities and
  184  health services in the service district of the applicant.
  185         (3)(c) The ability of the applicant to provide quality of
  186  care and the applicant’s record of providing quality of care.
  187         (4)(d) The availability of resources, including health
  188  personnel, management personnel, and funds for capital and
  189  operating expenditures, for project accomplishment and
  190  operation.
  191         (5)(e) The extent to which the proposed services will
  192  enhance access to health care for residents of the service
  193  district.
  194         (6)(f) The immediate and long-term financial feasibility of
  195  the proposal.
  196         (7)(g) The extent to which the proposal will foster
  197  competition that promotes quality and cost-effectiveness.
  198         (8)(h) The costs and methods of the proposed construction,
  199  including the costs and methods of energy provision and the
  200  availability of alternative, less costly, or more effective
  201  methods of construction.
  202         (9)(i) The applicant’s past and proposed provision of
  203  health care services to Medicaid patients and the medically
  204  indigent.
  205         (10)(j) The applicant’s designation as a Gold Seal Program
  206  nursing facility pursuant to s. 400.235, when the applicant is
  207  requesting additional nursing home beds at that facility.
  208         (2) For a general hospital, the agency shall consider only
  209  the criteria specified in paragraph (1)(a), paragraph (1)(b),
  210  except for quality of care in paragraph (1)(b), and paragraphs
  211  (1)(e), (g), and (i).
  212         Section 8. Paragraph (c) of subsection (1) and paragraph
  213  (a) of subsection (2) of section 408.036, Florida Statutes, are
  214  amended to read:
  215         408.036 Projects subject to review; exemptions.—
  216         (1) APPLICABILITY.—Unless exempt under subsection (3), all
  217  health-care-related projects, as described in paragraphs (a)
  218  (f), are subject to review and must file an application for a
  219  certificate of need with the agency. The agency is exclusively
  220  responsible for determining whether a health-care-related
  221  project is subject to review under ss. 408.031-408.045.
  222         (c) The conversion from one type of health care facility to
  223  another, including the conversion from a general hospital, a
  224  specialty hospital, or a long-term care hospital.
  225         (2) PROJECTS SUBJECT TO EXPEDITED REVIEW.—Unless exempt
  226  pursuant to subsection (3), the following projects are subject
  227  to expedited review:
  228         (a) Transfer of a certificate of need, except that when an
  229  existing hospital is acquired by a purchaser, all certificates
  230  of need issued to the hospital which are not yet operational
  231  shall be acquired by the purchaser without need for a transfer.
  233  The agency shall develop rules to implement the expedited review
  234  process, including time schedule, application content that may
  235  be reduced from the full requirements of s. 408.037(1), and
  236  application processing.
  237         Section 9. Section 408.037, Florida Statutes, is amended to
  238  read:
  239         408.037 Application content.—
  240         (1) Except as provided in subsection (2) for a general
  241  hospital, An application for a certificate of need must contain:
  242         (a) A detailed description of the proposed project and
  243  statement of its purpose and need in relation to the district
  244  health plan.
  245         (b) A statement of the financial resources needed by and
  246  available to the applicant to accomplish the proposed project.
  247  This statement must include:
  248         1. A complete listing of all capital projects, including
  249  new health facility development projects and health facility
  250  acquisitions applied for, pending, approved, or underway in any
  251  state at the time of application, regardless of whether or not
  252  that state has a certificate-of-need program or a capital
  253  expenditure review program pursuant to s. 1122 of the Social
  254  Security Act. The agency may, by rule, require less-detailed
  255  information from major health care providers. This listing must
  256  include the applicant’s actual or proposed financial commitment
  257  to those projects and an assessment of their impact on the
  258  applicant’s ability to provide the proposed project.
  259         2. A detailed listing of the needed capital expenditures,
  260  including sources of funds.
  261         3. A detailed financial projection, including a statement
  262  of the projected revenue and expenses for the first 2 years of
  263  operation after completion of the proposed project. This
  264  statement must include a detailed evaluation of the impact of
  265  the proposed project on the cost of other services provided by
  266  the applicant.
  267         (c) An audited financial statement of the applicant or the
  268  applicant’s parent corporation if audited financial statements
  269  of the applicant do not exist. In an application submitted by an
  270  existing health care facility, health maintenance organization,
  271  or hospice, financial condition documentation must include, but
  272  need not be limited to, a balance sheet and a profit-and-loss
  273  statement of the 2 previous fiscal years’ operation.
  274         (2) An application for a certificate of need for a general
  275  hospital must contain a detailed description of the proposed
  276  general hospital project and a statement of its purpose and the
  277  needs it will meet. The proposed project’s location, as well as
  278  its primary and secondary service areas, must be identified by
  279  zip code. Primary service area is defined as the zip codes from
  280  which the applicant projects that it will draw 75 percent of its
  281  discharges. Secondary service area is defined as the zip codes
  282  from which the applicant projects that it will draw its
  283  remaining discharges. If, subsequent to issuance of a final
  284  order approving the certificate of need, the proposed location
  285  of the general hospital changes or the primary service area
  286  materially changes, the agency shall revoke the certificate of
  287  need. However, if the agency determines that such changes are
  288  deemed to enhance access to hospital services in the service
  289  district, the agency may permit such changes to occur. A party
  290  participating in the administrative hearing regarding the
  291  issuance of the certificate of need for a general hospital has
  292  standing to participate in any subsequent proceeding regarding
  293  the revocation of the certificate of need for a hospital for
  294  which the location has changed or for which the primary service
  295  area has materially changed. In addition, the application for
  296  the certificate of need for a general hospital must include a
  297  statement of intent that, if approved by final order of the
  298  agency, the applicant shall within 120 days after issuance of
  299  the final order or, if there is an appeal of the final order,
  300  within 120 days after the issuance of the court’s mandate on
  301  appeal, furnish satisfactory proof of the applicant’s financial
  302  ability to operate. The agency shall establish documentation
  303  requirements, to be completed by each applicant, which show
  304  anticipated provider revenues and expenditures, the basis for
  305  financing the anticipated cash-flow requirements of the
  306  provider, and an applicant’s access to contingency financing. A
  307  party participating in the administrative hearing regarding the
  308  issuance of the certificate of need for a general hospital may
  309  provide written comments concerning the adequacy of the
  310  financial information provided, but such party does not have
  311  standing to participate in an administrative proceeding
  312  regarding proof of the applicant’s financial ability to operate.
  313  The agency may require a licensee to provide proof of financial
  314  ability to operate at any time if there is evidence of financial
  315  instability, including, but not limited to, unpaid expenses
  316  necessary for the basic operations of the provider.
  317         (2)(3) The applicant must certify that it will license and
  318  operate the health care facility. For an existing health care
  319  facility, the applicant must be the licenseholder of the
  320  facility.
  321         Section 10. Paragraphs (c) and (d) of subsection (3),
  322  paragraphs (b) and (c) of subsection (5), and paragraph (d) of
  323  subsection (6) of section 408.039, Florida Statutes, are amended
  324  to read:
  325         408.039 Review process.—The review process for certificates
  326  of need shall be as follows:
  327         (3) APPLICATION PROCESSING.—
  328         (c) Except for competing applicants, in order to be
  329  eligible to challenge the agency decision on a general hospital
  330  application under review pursuant to paragraph (5)(c), existing
  331  hospitals must submit a detailed written statement of opposition
  332  to the agency and to the applicant. The detailed written
  333  statement must be received by the agency and the applicant
  334  within 21 days after the general hospital application is deemed
  335  complete and made available to the public.
  336         (d) In those cases where a written statement of opposition
  337  has been timely filed regarding a certificate of need
  338  application for a general hospital, the applicant for the
  339  general hospital may submit a written response to the agency.
  340  Such response must be received by the agency within 10 days of
  341  the written statement due date.
  343         (b) Hearings shall be held in Tallahassee unless the
  344  administrative law judge determines that changing the location
  345  will facilitate the proceedings. The agency shall assign
  346  proceedings requiring hearings to the Division of Administrative
  347  Hearings of the Department of Management Services within 10 days
  348  after the time has expired for requesting a hearing. Except upon
  349  unanimous consent of the parties or upon the granting by the
  350  administrative law judge of a motion of continuance, hearings
  351  shall commence within 60 days after the administrative law judge
  352  has been assigned. For an application for a general hospital,
  353  administrative hearings shall commence within 6 months after the
  354  administrative law judge has been assigned, and a continuance
  355  may not be granted absent a finding of extraordinary
  356  circumstances by the administrative law judge. All parties,
  357  except the agency, shall bear their own expense of preparing a
  358  transcript. In any application for a certificate of need which
  359  is referred to the Division of Administrative Hearings for
  360  hearing, the administrative law judge shall complete and submit
  361  to the parties a recommended order as provided in ss. 120.569
  362  and 120.57. The recommended order shall be issued within 30 days
  363  after the receipt of the proposed recommended orders or the
  364  deadline for submission of such proposed recommended orders,
  365  whichever is earlier. The division shall adopt procedures for
  366  administrative hearings which shall maximize the use of
  367  stipulated facts and shall provide for the admission of prepared
  368  testimony.
  369         (c) In administrative proceedings challenging the issuance
  370  or denial of a certificate of need, only applicants considered
  371  by the agency in the same batching cycle are entitled to a
  372  comparative hearing on their applications. Existing health care
  373  facilities may initiate or intervene in an administrative
  374  hearing upon a showing that an established program will be
  375  substantially affected by the issuance of any certificate of
  376  need, whether reviewed under s. 408.036(1) or (2), to a
  377  competing proposed facility or program within the same district.
  378  With respect to an application for a general hospital, competing
  379  applicants and only those existing hospitals that submitted a
  380  detailed written statement of opposition to an application as
  381  provided in this paragraph may initiate or intervene in an
  382  administrative hearing. Such challenges to a general hospital
  383  application shall be limited in scope to the issues raised in
  384  the detailed written statement of opposition that was provided
  385  to the agency. The administrative law judge may, upon a motion
  386  showing good cause, expand the scope of the issues to be heard
  387  at the hearing. Such motion shall include substantial and
  388  detailed facts and reasons for failure to include such issues in
  389  the original written statement of opposition.
  390         (6) JUDICIAL REVIEW.—
  391         (d) The party appealing a final order that grants a general
  392  hospital certificate of need shall pay the appellee’s attorney’s
  393  fees and costs, in an amount up to $1 million, from the
  394  beginning of the original administrative action if the appealing
  395  party loses the appeal, subject to the following limitations and
  396  requirements:
  397         1. The party appealing a final order must post a bond in
  398  the amount of $1 million in order to maintain the appeal.
  399         2. Except as provided under s. 120.595(5), in no event
  400  shall the agency be held liable for any other party’s attorney’s
  401  fees or costs.
  402         Section 11. Paragraph (d) of subsection (1) of section
  403  408.040, Florida Statutes, is amended to read:
  404         408.040 Conditions and monitoring.—
  405         (1)
  406         (d) If the holder of a certificate of need or the holder of
  407  an exemption fails to comply with a condition that is unrelated
  408  to the provision of charity care or the provision of care under
  409  the Florida Medicaid program upon which the issuance of the
  410  certificate or exemption was predicated, the agency may assess
  411  an administrative fine against the certificateholder or
  412  exemption holder in an amount not to exceed $1,000 per failure
  413  per day. If the holder of a certificate of need or the holder of
  414  an exemption fails to comply with a condition related to the
  415  provision of charity care or the provision of care under the
  416  Florida Medicaid program upon which the issuance of the
  417  certificate or exemption was predicated, the agency must assess
  418  an administrative fine against the certificateholder or
  419  exemption holder in the amount of $2,500 per day for each
  420  instance of noncompliance. Failure to annually report compliance
  421  with any condition upon which the issuance of the certificate or
  422  exemption was predicated constitutes noncompliance. In assessing
  423  the penalty, the agency shall take into account as mitigation
  424  the degree of noncompliance. Proceeds of such penalties shall be
  425  deposited in the Public Medical Assistance Trust Fund.
  426         Section 12. Subsection (1) of section 408.043, Florida
  427  Statutes, is amended to read:
  428         408.043 Special provisions.—
  429         (1) OSTEOPATHIC ACUTE CARE HOSPITALS.—When an application
  430  is made for a certificate of need to construct or to expand an
  431  osteopathic acute care hospital, the need for such hospital
  432  shall be determined on the basis of the need for and
  433  availability of osteopathic services and osteopathic acute care
  434  hospitals in the district. When a prior certificate of need to
  435  establish an osteopathic acute care hospital has been issued in
  436  a district, and the facility is no longer used for that purpose,
  437  the agency may continue to count such facility and beds as an
  438  existing osteopathic facility in any subsequent application for
  439  construction of an osteopathic acute care hospital.
  440         Section 13. Subsection (5) of section 395.1065, Florida
  441  Statutes, is amended to read:
  442         395.1065 Criminal and administrative penalties;
  443  moratorium.—
  444         (5) The agency shall impose a fine of $500 for each
  445  instance of the facility’s failure to provide the information
  446  required by rules adopted pursuant to s. 395.1055(1)(g) s.
  447  395.1055(1)(h).
  448         Section 14. This act shall take effect July 1, 2019.