Florida Senate - 2019 CS for SB 1712
By the Committee on Health Policy; and Senator Harrell
588-03679-19 20191712c1
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 the agency’s Grants and
19 Donations Trust Fund in lieu of providing the required
20 charity care; requiring such hospitals to annually
21 report compliance to the agency; requiring the agency
22 to impose a specified administrative fine for
23 noncompliance; requiring the agency to adopt rules;
24 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 of a specialty hospital to a general hospital from
39 certificate of need review requirements; amending ss.
40 408.037 and 408.039, F.S.; deleting provisions
41 relating to certificate of need applications for
42 general hospitals; amending s. 408.040, F.S.;
43 requiring the agency to assess a specified
44 administrative fine against the holder of a
45 certificate of need or the holder of an exemption
46 which fails to comply with specified conditions;
47 requiring a general hospital that was issued a
48 certificate of need with certain conditions to
49 continue to meet those conditions to maintain
50 licensure; amending s. 408.043, F.S.; deleting
51 provisions relating to certificates of need for
52 osteopathic acute care hospitals; prohibiting the
53 agency from initiating a review cycle or from
54 accepting letters of intent or applications for the
55 issuance of certificate of need for the new
56 construction or the establishment of a freestanding
57 hospital; requiring the agency to issue such a
58 certificate of need to certain applicants, regardless
59 of litigation status; providing applicability;
60 providing effective dates.
61
62 Be It Enacted by the Legislature of the State of Florida:
63
64 Section 1. Present subsections (8), (9), and (10) of
65 section 395.003, Florida Statutes, are redesignated as
66 subsections (9), (10), and (11), respectively, paragraph (c) of
67 subsection (1) and present subsections (9) and (10) of that
68 section are amended, and a new subsection (8) is added to that
69 section, to read:
70 395.003 Licensure; denial, suspension, and revocation.—
71 (1)
72 (c) Until July 1, 2006, additional emergency departments
73 located off the premises of licensed hospitals may not be
74 authorized by the agency.
75 (8) Applicable only to a general hospital that is, or will
76 be, newly licensed on or after July 1, 2019; that does not hold
77 a certificate of need issued by the agency; and that is not
78 replacing a currently operating general hospital located within
79 1 mile of the newly licensed hospital:
80 (a) When proposing a new general hospital project subject
81 to this subsection and before filing for approval of plans and
82 specifications under s. 395.0163, each prospective applicant for
83 licensure must submit a notice to the agency of its intent to
84 establish a newly licensed hospital which includes the location
85 for the proposed hospital, the number and types of beds to be
86 licensed, and the services that the hospital will offer.
87 (b) Other than a long-term care hospital, the agency may
88 not license a new general hospital subject to this subsection
89 unless:
90 1. The hospital has at least 100 beds and has intensive
91 care, progressive care, and medical-surgical beds. This
92 requirement does not apply if the hospital is a rural hospital,
93 as defined in s. 395.602, or is located in a medically
94 underserved area; and
95 2. The hospital has an onsite emergency department that
96 will operate 24 hours per day, 7 days per week.
97 (c) Each such hospital must participate in the state
98 Medicaid program and the Medicare program.
99 (d) Except as provided in paragraph (e), each such hospital
100 must provide charity care in an amount equal to or greater than
101 the district average for hospitals in the applicable district.
102 The agency shall adopt by rule a method for calculating the
103 district average for charity care for each district. For
104 purposes of this subsection, the term “charity care” has the
105 same meaning as in s. 409.911(1) and the term “district” has the
106 same meaning as in s. 408.032.
107 (e) If such a hospital is located in a medically
108 underserved area, the amount of charity care required to be
109 provided by the hospital under paragraph (d) is equivalent in
110 percentage to the medically underserved area’s Index of Medical
111 Underservice score as calculated by the federal Health Resources
112 and Services Administration within the Department of Health and
113 Human Services.
114 (f) In lieu of providing charity care under paragraph (d)
115 or paragraph (e), each such hospital may donate an amount
116 determined by the agency to be functionally equivalent to the
117 amounts required under those paragraphs to the agency’s Grants
118 and Donations Trust Fund.
119 (g) Each such hospital shall annually report to the agency
120 its compliance with paragraphs (c)-(f). Failure to report
121 compliance constitutes noncompliance. The agency shall assess an
122 administrative fine on a hospital that fails to comply with this
123 subsection in the amount of 1 percent of its net revenue for
124 each 0.5 percent of the required amount of charity care not
125 provided pursuant to paragraph (d) or paragraph (e) or the
126 required amount as determined by the agency pursuant to
127 paragraph (f).
128 (h) The agency shall adopt rules to implement this
129 subsection.
130 (10)(9) A hospital licensed as of June 1, 2004, is shall be
131 exempt from subsection (9) (8) as long as the hospital maintains
132 the same ownership, facility street address, and range of
133 services that were in existence on June 1, 2004. Any transfer of
134 beds, or other agreements that result in the establishment of a
135 hospital or hospital services within the intent of this section,
136 shall be subject to subsection (9) (8). Unless the hospital is
137 otherwise exempt under subsection (9) (8), the agency shall deny
138 or revoke the license of a hospital that violates any of the
139 criteria set forth in that subsection.
140 (11)(10) The agency may adopt rules implementing the
141 licensure requirements set forth in subsection (9) (8). Within
142 14 days after rendering its decision on a license application or
143 revocation, the agency shall publish its proposed decision in
144 the Florida Administrative Register. Within 21 days after
145 publication of the agency’s decision, any authorized person may
146 file a request for an administrative hearing. In administrative
147 proceedings challenging the approval, denial, or revocation of a
148 license pursuant to subsection (9) (8), the hearing must be
149 based on the facts and law existing at the time of the agency’s
150 proposed agency action. Existing hospitals may initiate or
151 intervene in an administrative hearing to approve, deny, or
152 revoke licensure under subsection (9) (8) based upon a showing
153 that an established program will be substantially affected by
154 the issuance or renewal of a license to a hospital within the
155 same district or service area.
156 Section 2. Section 395.6025, Florida Statutes, is repealed.
157 Section 3. Subsections (8) and (13) of section 408.032,
158 Florida Statutes, are amended to read:
159 408.032 Definitions relating to Health Facility and
160 Services Development Act.—As used in ss. 408.031-408.045, the
161 term:
162 (8) “Health care facility” means a hospital, long-term care
163 hospital, skilled nursing facility, hospice, or intermediate
164 care facility for the developmentally disabled. A facility
165 relying solely on spiritual means through prayer for healing is
166 not included as a health care facility.
167 (13) “Long-term care hospital” means a hospital licensed
168 under chapter 395 which meets the requirements of 42 C.F.R. s.
169 412.23(e) and seeks exclusion from the acute care Medicare
170 prospective payment system for inpatient hospital services.
171 Section 4. Subsection (2) of section 408.034, Florida
172 Statutes, is amended to read:
173 408.034 Duties and responsibilities of agency; rules.—
174 (2) In the exercise of its authority to issue licenses to
175 health care facilities and health service providers, as provided
176 under chapters 393 and 395 and parts II, IV, and VIII of chapter
177 400, the agency may not issue a license to any health care
178 facility or health service provider that fails to receive a
179 certificate of need or an exemption for the licensed facility or
180 service, except that the agency may issue a license to a general
181 hospital that has not been issued a certificate of need if that
182 hospital meets the criteria established in s. 395.003(8).
183 Section 5. Section 408.035, Florida Statutes, is amended to
184 read:
185 408.035 Review criteria.—
186 (1) The agency shall determine the reviewability of
187 applications and shall review applications for certificate-of
188 need determinations for health care facilities and health
189 services in context with the following criteria, except for
190 general hospitals as defined in s. 395.002:
191 (1)(a) The need for the health care facilities and health
192 services being proposed.
193 (2)(b) The availability, quality of care, accessibility,
194 and extent of utilization of existing health care facilities and
195 health services in the service district of the applicant.
196 (3)(c) The ability of the applicant to provide quality of
197 care and the applicant’s record of providing quality of care.
198 (4)(d) The availability of resources, including health
199 personnel, management personnel, and funds for capital and
200 operating expenditures, for project accomplishment and
201 operation.
202 (5)(e) The extent to which the proposed services will
203 enhance access to health care for residents of the service
204 district.
205 (6)(f) The immediate and long-term financial feasibility of
206 the proposal.
207 (7)(g) The extent to which the proposal will foster
208 competition that promotes quality and cost-effectiveness.
209 (8)(h) The costs and methods of the proposed construction,
210 including the costs and methods of energy provision and the
211 availability of alternative, less costly, or more effective
212 methods of construction.
213 (9)(i) The applicant’s past and proposed provision of
214 health care services to Medicaid patients and the medically
215 indigent.
216 (10)(j) The applicant’s designation as a Gold Seal Program
217 nursing facility pursuant to s. 400.235, when the applicant is
218 requesting additional nursing home beds at that facility.
219 (2) For a general hospital, the agency shall consider only
220 the criteria specified in paragraph (1)(a), paragraph (1)(b),
221 except for quality of care in paragraph (1)(b), and paragraphs
222 (1)(e), (g), and (i).
223 Section 6. Paragraphs (b) and (c) of subsection (1) of
224 section 408.036, Florida Statutes, are amended to read:
225 408.036 Projects subject to review; exemptions.—
226 (1) APPLICABILITY.—Unless exempt under subsection (3), all
227 health-care-related projects, as described in paragraphs (a)
228 (f), are subject to review and must file an application for a
229 certificate of need with the agency. The agency is exclusively
230 responsible for determining whether a health-care-related
231 project is subject to review under ss. 408.031-408.045.
232 (b) The new construction or establishment of additional
233 health care facilities, except for the construction of or
234 establishment of a general hospital or including a replacement
235 health care facility when the proposed project site is not
236 located on the same site as or within 1 mile of the existing
237 health care facility, if the number of beds in each licensed bed
238 category will not increase.
239 (c) The conversion from one type of health care facility to
240 another, including the conversion from a general hospital or, a
241 specialty hospital, or a long-term care hospital except that the
242 conversion of a specialty hospital to a general hospital is not
243 subject to review if, once converted, the hospital meets the
244 licensure criteria in s. 395.003(8).
245 Section 7. Section 408.037, Florida Statutes, is amended to
246 read:
247 408.037 Application content.—
248 (1) Except as provided in subsection (2) for a general
249 hospital, An application for a certificate of need must contain:
250 (a) A detailed description of the proposed project and
251 statement of its purpose and need in relation to the district
252 health plan.
253 (b) A statement of the financial resources needed by and
254 available to the applicant to accomplish the proposed project.
255 This statement must include:
256 1. A complete listing of all capital projects, including
257 new health facility development projects and health facility
258 acquisitions applied for, pending, approved, or underway in any
259 state at the time of application, regardless of whether or not
260 that state has a certificate-of-need program or a capital
261 expenditure review program pursuant to s. 1122 of the Social
262 Security Act. The agency may, by rule, require less-detailed
263 information from major health care providers. This listing must
264 include the applicant’s actual or proposed financial commitment
265 to those projects and an assessment of their impact on the
266 applicant’s ability to provide the proposed project.
267 2. A detailed listing of the needed capital expenditures,
268 including sources of funds.
269 3. A detailed financial projection, including a statement
270 of the projected revenue and expenses for the first 2 years of
271 operation after completion of the proposed project. This
272 statement must include a detailed evaluation of the impact of
273 the proposed project on the cost of other services provided by
274 the applicant.
275 (c) An audited financial statement of the applicant or the
276 applicant’s parent corporation if audited financial statements
277 of the applicant do not exist. In an application submitted by an
278 existing health care facility, health maintenance organization,
279 or hospice, financial condition documentation must include, but
280 need not be limited to, a balance sheet and a profit-and-loss
281 statement of the 2 previous fiscal years’ operation.
282 (2) An application for a certificate of need for a general
283 hospital must contain a detailed description of the proposed
284 general hospital project and a statement of its purpose and the
285 needs it will meet. The proposed project’s location, as well as
286 its primary and secondary service areas, must be identified by
287 zip code. Primary service area is defined as the zip codes from
288 which the applicant projects that it will draw 75 percent of its
289 discharges. Secondary service area is defined as the zip codes
290 from which the applicant projects that it will draw its
291 remaining discharges. If, subsequent to issuance of a final
292 order approving the certificate of need, the proposed location
293 of the general hospital changes or the primary service area
294 materially changes, the agency shall revoke the certificate of
295 need. However, if the agency determines that such changes are
296 deemed to enhance access to hospital services in the service
297 district, the agency may permit such changes to occur. A party
298 participating in the administrative hearing regarding the
299 issuance of the certificate of need for a general hospital has
300 standing to participate in any subsequent proceeding regarding
301 the revocation of the certificate of need for a hospital for
302 which the location has changed or for which the primary service
303 area has materially changed. In addition, the application for
304 the certificate of need for a general hospital must include a
305 statement of intent that, if approved by final order of the
306 agency, the applicant shall within 120 days after issuance of
307 the final order or, if there is an appeal of the final order,
308 within 120 days after the issuance of the court’s mandate on
309 appeal, furnish satisfactory proof of the applicant’s financial
310 ability to operate. The agency shall establish documentation
311 requirements, to be completed by each applicant, which show
312 anticipated provider revenues and expenditures, the basis for
313 financing the anticipated cash-flow requirements of the
314 provider, and an applicant’s access to contingency financing. A
315 party participating in the administrative hearing regarding the
316 issuance of the certificate of need for a general hospital may
317 provide written comments concerning the adequacy of the
318 financial information provided, but such party does not have
319 standing to participate in an administrative proceeding
320 regarding proof of the applicant’s financial ability to operate.
321 The agency may require a licensee to provide proof of financial
322 ability to operate at any time if there is evidence of financial
323 instability, including, but not limited to, unpaid expenses
324 necessary for the basic operations of the provider.
325 (2)(3) The applicant must certify that it will license and
326 operate the health care facility. For an existing health care
327 facility, the applicant must be the licenseholder of the
328 facility.
329 Section 8. Paragraphs (c) and (d) of subsection (3),
330 paragraphs (b) and (c) of subsection (5), and paragraph (d) of
331 subsection (6) of section 408.039, Florida Statutes, are amended
332 to read:
333 408.039 Review process.—The review process for certificates
334 of need shall be as follows:
335 (3) APPLICATION PROCESSING.—
336 (c) Except for competing applicants, in order to be
337 eligible to challenge the agency decision on a general hospital
338 application under review pursuant to paragraph (5)(c), existing
339 hospitals must submit a detailed written statement of opposition
340 to the agency and to the applicant. The detailed written
341 statement must be received by the agency and the applicant
342 within 21 days after the general hospital application is deemed
343 complete and made available to the public.
344 (d) In those cases where a written statement of opposition
345 has been timely filed regarding a certificate of need
346 application for a general hospital, the applicant for the
347 general hospital may submit a written response to the agency.
348 Such response must be received by the agency within 10 days of
349 the written statement due date.
350 (5) ADMINISTRATIVE HEARINGS.—
351 (b) Hearings shall be held in Tallahassee unless the
352 administrative law judge determines that changing the location
353 will facilitate the proceedings. The agency shall assign
354 proceedings requiring hearings to the Division of Administrative
355 Hearings of the Department of Management Services within 10 days
356 after the time has expired for requesting a hearing. Except upon
357 unanimous consent of the parties or upon the granting by the
358 administrative law judge of a motion of continuance, hearings
359 shall commence within 60 days after the administrative law judge
360 has been assigned. For an application for a general hospital,
361 administrative hearings shall commence within 6 months after the
362 administrative law judge has been assigned, and a continuance
363 may not be granted absent a finding of extraordinary
364 circumstances by the administrative law judge. All parties,
365 except the agency, shall bear their own expense of preparing a
366 transcript. In any application for a certificate of need which
367 is referred to the Division of Administrative Hearings for
368 hearing, the administrative law judge shall complete and submit
369 to the parties a recommended order as provided in ss. 120.569
370 and 120.57. The recommended order shall be issued within 30 days
371 after the receipt of the proposed recommended orders or the
372 deadline for submission of such proposed recommended orders,
373 whichever is earlier. The division shall adopt procedures for
374 administrative hearings which shall maximize the use of
375 stipulated facts and shall provide for the admission of prepared
376 testimony.
377 (c) In administrative proceedings challenging the issuance
378 or denial of a certificate of need, only applicants considered
379 by the agency in the same batching cycle are entitled to a
380 comparative hearing on their applications. Existing health care
381 facilities may initiate or intervene in an administrative
382 hearing upon a showing that an established program will be
383 substantially affected by the issuance of any certificate of
384 need, whether reviewed under s. 408.036(1) or (2), to a
385 competing proposed facility or program within the same district.
386 With respect to an application for a general hospital, competing
387 applicants and only those existing hospitals that submitted a
388 detailed written statement of opposition to an application as
389 provided in this paragraph may initiate or intervene in an
390 administrative hearing. Such challenges to a general hospital
391 application shall be limited in scope to the issues raised in
392 the detailed written statement of opposition that was provided
393 to the agency. The administrative law judge may, upon a motion
394 showing good cause, expand the scope of the issues to be heard
395 at the hearing. Such motion shall include substantial and
396 detailed facts and reasons for failure to include such issues in
397 the original written statement of opposition.
398 (6) JUDICIAL REVIEW.—
399 (d) The party appealing a final order that grants a general
400 hospital certificate of need shall pay the appellee’s attorney’s
401 fees and costs, in an amount up to $1 million, from the
402 beginning of the original administrative action if the appealing
403 party loses the appeal, subject to the following limitations and
404 requirements:
405 1. The party appealing a final order must post a bond in
406 the amount of $1 million in order to maintain the appeal.
407 2. Except as provided under s. 120.595(5), in no event
408 shall the agency be held liable for any other party’s attorney’s
409 fees or costs.
410 Section 9. Subsection (1) of section 408.040, Florida
411 Statutes, is amended, to read:
412 408.040 Conditions and monitoring.—
413 (1)(a) The agency may issue a certificate of need, or an
414 exemption, predicated upon statements of intent expressed by an
415 applicant in the application for a certificate of need or an
416 exemption. Any conditions imposed on a certificate of need or an
417 exemption based on such statements of intent shall be stated on
418 the face of the certificate of need or in the exemption
419 approval.
420 (b) The agency may consider, in addition to the other
421 criteria specified in s. 408.035, a statement of intent by the
422 applicant that a specified percentage of the annual patient days
423 at the facility will be utilized by patients eligible for care
424 under Title XIX of the Social Security Act. Any certificate of
425 need issued to a nursing home in reliance upon an applicant’s
426 statements that a specified percentage of annual patient days
427 will be utilized by residents eligible for care under Title XIX
428 of the Social Security Act must include a statement that such
429 certification is a condition of issuance of the certificate of
430 need. The certificate-of-need program shall notify the Medicaid
431 program office and the Department of Elderly Affairs when it
432 imposes conditions as authorized in this paragraph in an area in
433 which a community diversion pilot project is implemented.
434 Effective July 1, 2012, the agency may not impose sanctions
435 related to patient day utilization by patients eligible for care
436 under Title XIX of the Social Security Act for nursing homes.
437 (c) A certificateholder or an exemption holder may apply to
438 the agency for a modification of conditions imposed under
439 paragraph (a) or paragraph (b). If the holder of a certificate
440 of need or an exemption demonstrates good cause why the
441 certificate or exemption should be modified, the agency shall
442 reissue the certificate of need or exemption with such
443 modifications as may be appropriate. The agency shall by rule
444 define the factors constituting good cause for modification.
445 (d) If the holder of a certificate of need or the holder of
446 an exemption fails to comply with a condition that is unrelated
447 to the provision of charity care or the provision of care under
448 the Florida Medicaid program upon which the issuance of the
449 certificate or exemption was predicated, the agency may assess
450 an administrative fine against the certificateholder or
451 exemption holder in an amount not to exceed $1,000 per failure
452 per day. If the holder of a certificate of need or the holder of
453 an exemption fails to comply with a condition related to the
454 provision of charity care or the provision of care under the
455 Florida Medicaid program upon which the issuance of the
456 certificate or exemption was predicated, the agency must assess
457 an administrative fine against the certificateholder or
458 exemption holder in the amount of $2,500 per day for each
459 instance of noncompliance. Failure to annually report compliance
460 with any condition upon which the issuance of the certificate or
461 exemption was predicated constitutes noncompliance. In assessing
462 the penalty, the agency shall take into account as mitigation
463 the degree of noncompliance. Proceeds of such penalties shall be
464 deposited in the Public Medical Assistance Trust Fund.
465 (e) A general hospital that was issued a certificate of
466 need with conditions imposed as described in paragraph (a) or
467 paragraph (b), relating to the provision of charity care or the
468 provision of care under the Florida Medicaid program, must
469 continue to meet those conditions to maintain licensure
470 regardless of the status of that hospital’s certificate of need
471 unless such conditions are modified by the agency pursuant to
472 paragraph (c).
473 Section 10. Subsection (1) of section 408.043, Florida
474 Statutes, is amended to read:
475 408.043 Special provisions.—
476 (1) OSTEOPATHIC ACUTE CARE HOSPITALS.—When an application
477 is made for a certificate of need to construct or to expand an
478 osteopathic acute care hospital, the need for such hospital
479 shall be determined on the basis of the need for and
480 availability of osteopathic services and osteopathic acute care
481 hospitals in the district. When a prior certificate of need to
482 establish an osteopathic acute care hospital has been issued in
483 a district, and the facility is no longer used for that purpose,
484 the agency may continue to count such facility and beds as an
485 existing osteopathic facility in any subsequent application for
486 construction of an osteopathic acute care hospital.
487 Section 11. Effective upon this act becoming a law:
488 (1) The Agency for Health Care Administration may not
489 initiate a review cycle or accept letters of intent or
490 applications for the issuance of a certificate of need for the
491 new construction or establishment of a freestanding general
492 hospital.
493 (2) The agency shall issue a certificate of need to any
494 pending applicant for a certificate of need for the new
495 construction of or establishment of a freestanding general
496 hospital:
497 (a) With intensive care, progressive care, and medical
498 surgical beds;
499 (b) With an onsite emergency department that will be
500 operational 24 hours per day, 7 days per week; and
501 (c) Whose application for a certificate of need has been
502 approved by the agency, regardless of the litigation status of
503 the application.
504 (3) For an applicant seeking a certificate of need for the
505 new construction or establishment of a freestanding general
506 hospital that does not meet the criteria in subsection (2),
507 including an applicant whose application is pending approval or
508 denial by the agency and an applicant whose application was
509 initially denied by the agency but such denial is under appeal,
510 ss. 395.6025, 408.032, 408.034, 408.035, 408.036, 408.037,
511 408.039, and 408.043, Florida Statutes (2018), and any rules
512 adopted thereunder remain in effect until such time as the
513 agency has either issued the applicant a certificate of need,
514 the agency has denied the application and all appeals of the
515 denial have been exhausted, or the application has been
516 withdrawn.
517 Section 12. Except as otherwise expressly provided in this
518 act and except for this section, which shall take effect upon
519 this act becoming a law, this act shall take effect July 1,
520 2019.