Md. Code Regs. 10.24.01.12

Current through Register Vol. 51, No. 22, November 1, 2024

Section 10.24.01.12 - Holder Responsibilities and Penalties for Noncompliance

A. Project Implementation Schedule.

(1) An application for a CON or other Commission approval shall propose a schedule for implementation of the project that specifies the estimated time for, at a minimum, the following project implementation steps:

(a) The time required to enter a binding obligation following Commission approval of the application for the project;

(b) The time required to initiate construction, renovation, or both following execution of a binding obligation;

(c) The time required to complete the approved construction, renovation, or both following initiation of construction, renovation, or both; and

(d) The time required to place the new facility or modified facility in operation following the completion of approved construction, renovation, or both.

(2) The proposed project implementation schedule for a project requiring a multiphased plan for implementation shall detail those multiple phases and specify the estimated time requirements for, at a minimum, the four time periods listed above for each phase.

(3) A holder shall abide by the project implementation schedule submitted with its application for a CON or other Commission Approval.

(4) The project implementation schedule may be reasonably modified by the holder during the period during which the project is being implemented with approval of Commission staff.

B. Progress Report.

(1) Up until an approved project's completion, licensure, if required, and first use, a holder shall submit a semiannual progress report in the form and manner prescribed by Commission staff.

(2) The semiannual progress report shall detail the holder's compliance with the project implementation schedule and any conditions on approval imposed by the Commission.

(3) A holder shall submit the semiannual progress reports in accordance with the following schedule:

(a) The first report shall be due at least 45 days before the 6-month anniversary of the final action awarding the CON or other Commission approval; and

(b) Subsequent progress reports shall be due every 6 months after the due date of the prior report.

C. Obligation.

(1) Except as provided by §C(2) of this regulation, a holder shall obligate at least 51 percent of the approved capital expenditure for a project involving building construction, renovation, or both, as documented by a binding construction contract or equipment purchase order, within the following specified time periods:

(a) An approved new hospital has up to 36 months to document the required obligation;

(b) A project involving an approved new non-hospital health care facility or involving a building addition or replacement of building space of a health care facility has up to 24 months to document the required obligation;

(c) A project limited to renovation of existing building space of a health care facility has up to 18 months to document the required obligation; and

(d) A project that does not involve construction or renovation shall document that the approved project is complete and operational within 18 months of project approval.

(2) In a multiphased plan of construction with more than one construction contract approved for an existing health care facility, a holder has:

(a) Up to 12 months after approval to obligate 51 percent of the capital expenditure for the first phase of construction; and

(b) Up to 12 months after completion of the immediately preceding phase of construction to obligate 51 percent of the capital expenditure for any subsequent approved phase of construction.

D. Effective Date of a CON or other Commission approval. The effective date of a CON or other approval is the date of Commission action approving the application for the project. If a request for reconsideration is timely filed under Regulation .19 of this chapter, the effective date of the approval is the date the Commission rules on the request. The filing of a notice of appeal does not stay enforcement of the Commission decision.

E. Enforcement. The Commission may impose financial penalties, withdraw a CON or other Commission approval, or both, if it finds that:

(1) The holder made a material misrepresentation upon which the Commission relied in approving the application or issuing first use approval;

(2) The holder failed to demonstrate sufficient progress in implementing the project;

(3) The holder has failed to obligate or complete an approved project as required by §A of this regulation;

(4) The holder failed to meet a condition on the approval;

(5) The holder failed to timely provide the semiannual progress report required under §B of this regulation;

(6) The project differs materially from that approved by the Commission, including failure to timely seek approval of a project change in accordance with Regulation .17 of this chapter; or

(7) The holder failed to obtain approval under Regulation .18 of this chapter prior to first use of any portion of a facility or service developed under a CON or other Commission approval.

F. Financial Penalties.

(1) Financial penalties imposed in accordance with this regulation may not exceed:

(a) $100 per day for each day the violation continues for failure to timely provide a semiannual progress report; or

(b) 1 percent of the approved budget for any other violation.

(2) The Commission shall consider the following factors in determining the amount of any financial penalty:

(a) The willfulness of the improper conduct;

(b) The extent of actual or potential public harm caused by the violation;

(c) The cost of investigation;

(d) The holder's prior record of compliance;

(e) The budget approved in the CON or other Commission approval;

(f) The holder's ability to pay; and

(g) If applicable, the amount of any unapproved capital cost increase that exceeds the approved budget.

G. Notice Before Enforcement Action.

(1) If Commission staff determines that a CON or other Commission approval should be withdrawn or financial penalties should be imposed, Commission staff shall inform the holder and each appropriate local health department, setting forth in writing the reasons for the proposed action.

(2) This notice shall set forth the right of the holder to submit written argument in support of its position and present oral argument to the Commission, as well as the right to an evidentiary hearing conducted in accordance with Regulation .11 of this chapter, to show cause why the approval should not be withdrawn or financial penalties should not be imposed.

(3) A holder that has failed to demonstrate sufficient progress in project implementation shall show good cause for the lack of progress.

H. Final action by the Commission imposing financial penalties or withdrawing a CON or other approval shall:

(1) Be in writing;

(2) Include findings of fact and conclusions of law; and

(3) Be transmitted to the holder and to each appropriate local health department within 30 days of the date of action by the Commission.

I. CON Application after Withdrawal of a Prior CON. If a CON or other approval is withdrawn due to lack of sufficient progress in implementing the project, the holder may file an application seeking Commission approval to initiate or complete the previously authorized project, which shall be considered a new application by the Commission.

Md. Code Regs. 10.24.01.12

Regulations .12 amended effective February 4, 1976 (3:3 Md. R. 151)
Regulations .12 adopted effective November 6, 1995 (22:22 Md. R. 1658)
Regulation .12 amended effective April 11, 2005 (32:7 Md. R. 680)
Regulation .12C amended effective November 24, 2003 (30:23 Md. R. 1652); April 9, 2007 (34:7 Md. R. 699); adopted effective 50:22 Md. R. 975, eff. 12/1/2023; amended effective 51:14 Md. R. 678, eff. 7/22/2024.