D.C. Mun. Regs. tit. 22, r. 22-B4012

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 22-B4012 - GENERAL CRITERIA AND STANDARDS FOR REVIEW

4012.1

Whenever a criterion or standard requires proof of a fact, the applicant shall have the burden of affirmatively proving that fact.

4012.2

The criteria and standards set forth in this section shall apply to every CON application other than an application that relates to acquiring an existing health care facility.

4012.3

Each project shall conform to the general provisions, defined priorities, goals, objectives, recommended actions, criteria, and standards contained in the State Health Systems Plan (HSP) and the Annual Implementation Plan (AIP) for the development of health facilities or services, if applicable.

4012.4

Each project shall be consistent with the applicant's long range development plan.

4012.5

Each project shall be consistent with non-health sector plans for the service area of the proposed facility or service. The applicant shall demonstrate consistency by providing evidence and assurances that:

(a) It has considered other plans adopted or endorsed by the District, including public and private transportation, housing, and economic development that will impact the area the facility or service serves; and

(b) The proposal is consistent with those plans specified in subsection (a).

4012.6

Each applicant shall demonstrate the need for the project on a health care system wide basis (for those projects that substantially affect patient care). The applicant shall demonstrate need by meeting the following standards:

(a) The applicant shall provide evidence and assurances that the project is needed to meet service or facility levels required for the District as specified in the HSP. If a proposal serves a geographic area larger than the District, the applicant shall document that the project is needed to meet the service or facilities requirements of the larger area as specified in the HSP.

(b) If the HSP does not specify need, the applicant shall provide evidence and assurances that the project is needed based on a special analysis of the District or larger area service and facility needs. This study shall consider the utilization rates of the same or similar services of the applicant and other providers.

(c) If the application involves new technology, the applicant shall provide evidence and assurances of the developmental level of the technology and the extent to which it has been proven to be beneficial in controlled trials comparing its use with the use of conventional techniques or equipment. Applications involving new technology that has not been proven to the satisfaction of the Director to be beneficial in controlled trials shall not be considered needed unless the applicant proposes to conduct the trials in addition to providing patient care.

(d) An application involving new technology that has been proven to the satisfaction of the Director to be generally accepted by the scientific community as beneficial in controlled trials shall also demonstrate that other actual or potential applicants that might more appropriately be given approval for acquisition of the new technology:

(1) Already have the technology or have SHPDA approval for its acquisition and that an additional need for the technology to meet patient requirements exists; or

(2) Will not seek approval to acquire the new technology within (12) months of the application date. The applicant shall identify other actual or potential applicants considering the following:

(A) The number of beds operated;

(B) Teaching programs;

(C) Research programs;

(D) Current or approved specialized units or specialized services provided; and

(E) Current or approved special capabilities in terms of equipment and personnel skills.

(e) The Director shall consider the special needs and circumstances of an applicant, as documented by the applicant, for an application from an entity that provides a substantial portion of its services or resources, or both, to individuals from outside the metropolitan area.

4012.7

Each applicant shall demonstrate need for the project on an institutional basis by providing evidence and assurances that the project is required to meet institutional needs.

4012.8

Each applicant shall satisfy the criterion of availability of training opportunities by meeting the following standards:

(a) An applicant shall provide evidence and assurances that the proposed project will not negatively impact opportunities for health professional training if a health profession school or program asserts, and the Director agrees, that training opportunities are necessary; and

(b) If the Director finds that a project is not otherwise needed under the criteria in Subsections 4012.5 and 4012.6, an applicant may provide evidence that the project is needed to provide reasonable access to training opportunities in operating services.

4012.9

Each applicant shall satisfy the criterion for requirements of research projects and programs by meeting the following standards:

(a) An applicant shall provide evidence and assurances that the proposed project will not negatively impact the availability of facilities and equipment needed for biomedical and behavioral research projects designed to meet a national need and for which local conditions offer special advantages, as determined by the Director; and

(b) If the Director finds that a project is not otherwise needed, an applicant may provide evidence that a project is essential to meeting the reasonable needs of biomedical or behavioral research projects that are designed to meet a national need and for which local conditions offer special advantages, as determined by the Director.

4012.10

Each applicant shall satisfy the criterion for the schedule for project implementation by providing evidence and assurances that the proposal, if approved, will be implemented in a prompt and orderly fashion consistent with the approved schedule and public need for the service or facility and cost containment in project implementation.

4012.11

Each applicant shall satisfy the criterion for the effect of operating policies, personnel capabilities, and the physical structure on the proposed project's care of patients, patient accessibility to medical care, and patient understanding of medical care by meeting the following standards:

(a) An applicant shall provide evidence and assurances that the project will not negatively impact services available to the following:

(1) Service area ethnic populations who speak a language other than English;

(2) Low-income residents;

(3) Persons with physical or mental disabilities;

(4) Racial and ethnic minorities;

(5) Women;

(6) Elderly persons;

(7) Persons whose care is paid for by Medicaid, Medicare, public medical assistance programs, or other public programs;

(8) Persons uninsured or who have limited insurance coverage; and

(9) Other under-served groups.

(b) An applicant shall provide evidence and assurances that access to care is not unreasonably restricted by its admissions policies, requirements, or hours of operation. If an application is for major medical equipment, unless otherwise specified in the HSP for specific types of equipment, not otherwise exempt, the standard for this criterion shall not be considered met unless the equipment is regularly scheduled for operation at least fifty (50) hours per week, fifty-two (52) weeks per year and is available for emergency use at all other times, if the equipment is of a type reasonably expected to be necessary for emergency care.

4012.12

Each applicant shall satisfy the criterion for compliance with uncompensated care and community service requirements. The standard for satisfying this criterion is by providing evidence and assurances of compliance with applicable provisions of § 11 of the Act (D.C. Official Code § 44-410) as well as the following:

(a) An applicant that has not previously held a CON shall provide assurances of prospective compliance; and

(b) An applicant that has previously held a CON shall provide evidence of past compliance and assurances of prospective compliance.

4012.13

Each applicant shall satisfy the criterion for involvement of the community in the process of project planning and development. The standard for satisfying this criterion is by providing evidence and assurances of opportunities for community participation in the preparation and development of the project through the following:

(a) Public notice of the project to affected Advisory Neighborhood Commissions (ANC's); and

(b) Consideration of comments received from community agencies, groups, and individuals.

4012.14

Each applicant shall satisfy the criterion for impact of the proposed project on the health system and the health of District residents and visitors. The standard for satisfying this criterion is by providing evidence and assurances that the project, if it involves a direct patient care service, will not adversely impact the health care system and the health of the public in terms of health status as measured by industry standards, such as hospital admissions, emergency room visits, length of stay, and other relevant measures.

4012.15

Each applicant shall satisfy the criterion for observance of rights of patients. The standard for satisfying this criterion is by providing evidence and assurances of the applicant's mechanism for guaranteeing patient's rights. Minimal compliance with this standard requires compliance with all federal and District laws and regulations regarding patient rights.

4012.16

Each applicant shall satisfy the criterion for assurance that the care to be provided is of acceptable quality. The standard for satisfying this criterion is by providing evidence and assurances that it will meet professional and community standards of quality care. The applicant shall document compliance with this standard by showing that the project conforms to the requirements of District and federal regulatory agencies and recognized accreditation bodies including the Joint Commission on the Accreditation of Health Care Organizations and the Commission on Accreditation of Rehabilitation Facilities.

4012.17

Each applicant shall satisfy the criterion for compliance with building and equipment requirements. The standard for satisfying this criterion is by providing evidence and assurances that all new construction meets the standards contained in minimum requirements of latest edition of Guidelines for Design and Construction of Health Care Facilities, and District construction and licensing codes and regulations, as applicable to the type of project proposed. A remodeling project shall satisfy as many of these requirements as are reasonably practical, as determined by the Director, acting in consultation with District licensing and construction authorities.

4012.18

Each applicant shall satisfy the criterion for selection of the best of alternative means of providing the project's services. The standard for satisfying this criterion is by providing a description of the alternatives the applicant considered, and the findings that led the applicant to select the proposed approach rather than an alternative approach. The applicant shall select the most favorable alternative available by evaluating and comparing the final selected plan with the following alternative means:

(a) If shared services are not proposed, the applicant shall demonstrate why shared services are not practical or cost effective;

(b) If a merger is not proposed, the applicant shall demonstrate why a merger agreement is not desirable or practical;

(c) The applicant shall demonstrate that the proposed method for providing services, whether provided in-house or contracted out, is more desirable than the alternative. Where applicable, the estimated costs for both contract and in-house services should be presented;

(d) The applicant shall demonstrate that the option of taking no action is not desirable; or

(e) The applicant shall demonstrate that it considered other alternatives and demonstrate why they were considered less desirable.

4012.19

Each applicant shall satisfy the criterion for the effect of operational costs of the project on general costs, rates, or consumer charges. The standard for satisfying this criterion is by providing evidence and assurances that the project will reduce costs or charges for the service in question and for related services to the maximum practical extent or increase cost and charges to the minimum practical extent, consistent with benefits provided, if any. Unless a different standard is adopted in the HSP for a specific service, projects that are projected to operate at less than eighty percent (80%) utilization of available capacity in their third (3rd) year of operation, given operating hours determined by the Director to be reasonable, shall be deemed not to meet this standard. The Director may consider special circumstances concerning utilization for teaching and research in determining compliance with the utilization rate standard.

4012.20

Each applicant shall satisfy the criterion for the effect of operational costs of the project on the applicant's budget. The standard for satisfying this criterion is by providing evidence and assurances that the applicant's operating cost and revenue analysis show that the project will not substantially negatively affect the applicant's continuing financial operational viability, given reasonable revenue and volume projections.

4012.21

Each applicant shall satisfy the criterion for adoption of energy conservation techniques. The standards for satisfying this criterion are as follows:

(a) If a project is designed to conserve energy, the applicant shall provide evidence and assurances that the proposal is the most cost effective and practical means available and that over the life cycle of the facility the proposal will result in reduced costs; and

(b) If a project is not designed primarily to conserve energy, if construction or equipment replacement is involved in the project, the applicant shall provide evidence and assurances that the project incorporates the most cost effective and practical energy conservation techniques over the life cycle of the project.

4012.22

Each applicant shall satisfy the criterion for effect on competition. The standards for satisfying this criterion are as follows:

(a) If a new service does not involve capital expenditures of an amount that would otherwise require a CON review, the applicant shall provide evidence and assurances that the project will positively affect competitive factors and result in a more appropriate supply of services at lower charges or at charges no higher than is justified by the benefits of its more appropriate availability, quality, and other features; and

(b) For all other projects, including acquisitions, the applicant shall provide evidence and assurances that the project will not adversely affect competition or an adequate supply of services.

4012.23

Each applicant shall satisfy the criterion for efficiency and effectiveness of existing services. The standards for satisfying this criterion are as follows:

(a) If an application proposes to modernize a service, to replace equipment, or to expand a service, an applicant shall provide evidence and assurances that the results of the proposed modernization, service expansion, or equipment replacement cannot be achieved by reasonable increases in the applicant's efficiency or effectiveness, including reasonable changes in operating hours, more efficient use of other equipment, use of revised procedures, better scheduling of services, or referral to other providers; and

(b) For a proposed new service, an applicant shall provide evidence and assurances that the proposal is the most efficient, effective, and practical manner of providing needed services, considering not only alternatives that the applicant might offer but also the operations or potential operations of other providers.

4012.24

Each applicant shall satisfy the criterion for construction plan design and specification alternatives. The standard for satisfying this criterion is by providing evidence and assurances that the construction methods and material specifications selected are the most cost effective over the life cycle of the proposed project, taking construction, energy, operating, and maintenance costs into consideration.

4012.25

Each applicant shall satisfy the criterion for financial viability of project operation. The standard for satisfying this criterion is by providing evidence and assurances that sufficient financial resources are available, not only to complete the project but also to sustain operations for at least two (2) years. Financial resources that may be used to meet this requirement include:

(a) Reserves for start-up costs; and

(b) Patient revenue, based on estimated patient volume, payer mix, and reimbursements the Director determines to be reasonable. Reimbursements and projected patient volume are not reasonable if the projections are based, in whole or in part, providing services that are inconsistent with the criterion and standard specified in Subsection 4012.27.

4012.26

Each applicant shall satisfy the criterion for availability of required capital. The standard for satisfying this criterion is by providing evidence and assurances that the proposed source of funds, including loans, are fully described, to the extent possible at the time of proposal submission for the project review. Each proposed loan agreement shall be accompanied by information on duration and repayment terms. The applicant shall provide evidence and assurances that more favorable financial arrangements cannot be obtained. The financial arrangements shall be reasonable when compared to those for other similar projects.

4012.27

Each applicant shall satisfy the criterion for compatibility with the reimbursement policies of third-party payers, where applicable. The standard for satisfying this criterion is by providing evidence and assurances that the applicants proposed services are reimbursable by third-party payers (including Medicare and Medicaid) if the third-party payers reimburse other providers in the District for providing the same services.

4012.28

Each applicant shall satisfy the criterion for availability of personnel. The standard for satisfying this criterion is by providing evidence and assurances that the proposal includes adequate qualified personnel and that the required personnel can be obtained without substantial negative effects on other services the applicant or other providers offer.

4012.29

Each applicant shall satisfy the criterion for management capability. The standard for satisfying this criterion is by providing evidence and assurances of a stable and competent background in the administration and conduct of existing programs, if any, and demonstrating the ability to conduct the proposed program in a competent and effective manner.

4012.30

Each applicant shall satisfy the criterion for availability of ancillary services, as required. The standard for satisfying this criterion is by providing evidence and assurances that required ancillary or support services necessary for operation of a proposed facility or service shall be available within the applicant's existing operation, through supply agreement with another provider, or as a part of the proposal.

4012.31

Each applicant shall satisfy the criterion for relationship of the project to the health care system. The standard for satisfying this criterion is by providing evidence and assurances that clearly define the relationship of the proposed project to existing services and facilities in the health care system, and the effect of the project on other facilities and services, including those of other providers. The applicant shall demonstrate appropriate linkages to ensure continuity of care.

4012.32

The general criteria set forth in Subsections 4012.33 and 4012.34 shall be applicable to applications submitted by HMOs.

4012.33

Each HMO applicant shall satisfy the criterion for need for the project to meet the needs of enrolled members of the HMO (or combination of HMOs) and to meet the needs of reasonably anticipated new members. The standard for satisfying this criterion is by providing evidence and assurances that the proposed project is reasonably required to meet the health care needs of the HMO members or future members who can be expected to use the proposed service or facility.

4012.34

Each HMO applicant shall satisfy the criterion for reasonable availability of the proposed service or facility only through direct provision by the applicant HMO. A proposed service or facility is presumed not to be reasonably available to an HMO other than by direct provision by the HMO (or group of HMOs) unless the Director determines that the proposed facility or service:

(a) Would be available to the HMO under a contract, lease, or similar arrangement of at least five (5) years duration;

(b) Would be reasonably available and conveniently accessible through physicians and other health professionals associated with the HMO (for example, HMO physicians having full staff privileges at a non-HMO hospital);

(c) Would not cost appreciably more than if the facility or service was provided directly by the HMO; and

(d) Would be available in a manner that is administratively feasible to the HMO.

4012.35

The general criteria set forth in Subsections 4012.36 through 4012.40 shall apply to applications proposing decreases in bed capacity or closure of services.

4012.36

If the Director determines that a proposed closure of beds or of a service does not comply with life safety, or licensure codes, the proposed closure shall satisfy the criterion of financial capability of the applicant to bring the facility, beds, or service into compliance with life safety and licensure standards. The standard for satisfying this criterion is by providing evidence and assurances that the applicant is financially incapable of taking actions necessary to bring the beds or service into code or standards compliance.

4012.37

When a proposed closure of beds or of a service is based on the applicant's claim of financial infeasibility of continued operations, the proposed closure shall satisfy the criterion for financial feasibility of continued operations. The standard for satisfying this criterion is by providing evidence and assurances that, despite operation of the facility in accordance with recognized management procedures and reasonable levels of efficiency, continued operation of the beds or service would produce continuing significant long term financial losses.

4012.38

For proposed bed reductions or service closures not subject to Subsections 4012.36 or 4012.37, the proposed reduction or closure shall satisfy the criterion for consistency of the proposed bed reduction or service closure with the goals of the HSP and AIP. The standard for complying with this criterion is by providing evidence and assurances that the project complies with the goals of the HSP and AIP.

4012.39

For proposed bed reductions or service closures not subject to Subsections 4012.36 or 4012.37, the proposed reduction or closure shall satisfy the criterion for degree of patient impact. The standard for complying with this criterion is by providing evidence and assurances that a proposed reduction or closure will not negatively affect consumers of health care services by causing any of the following:

(a) Substantially increasing the cost of health care;

(b) Substantially reducing the quality of health care;

(c) Substantially reducing the availability of health care;

(d) Substantially reducing the acceptability of health care;

(e) Substantially reducing continuity of health care; or

(f) Substantially reducing the accessibility of health care.

D.C. Mun. Regs. tit. 22, r. 22-B4012

Final Rulemaking published at 29 DCR 5569 (December 17, 1982), enacting Proposed Rulemaking published at 29 DCR 4742 (October 29, 1982); as amended by Final Rulemaking published at 61 DCR 1666 (February 28, 2014)

Authority: § 22 of the Health Services Planning Program Re-establishment Act of 1996 (Act), effective April 9, 1997 (D.C. Law 11-191; D.C. Official Code § 44-421 (2012 Repl.)).