N.H. Admin. Code § He-Hea 1004.01

Current through Register No. 50, December 12, 2024

Section He-Hea 1004.01 - Criteria

In addition to all other requirements in RSA 151-C:7 and He-Hea 303.02 through He-Hea 303.09, applicants shall meet the following criteria for consideration of a CON for expansion, renovation or replacement of an acute care facility:

(a) Applicants shall demonstrate that the anticipated proposed construction cost per bed, cost per square foot and square foot per bed shall be comparable in cost and size by a 10% margin to the 2008 edition of Marshall Valuation Service, section 15;

(b) Demonstration of project costs shall be made in the form of a report included with the application which provides:

(1) A detail of the costs and space by department or area affected by the proposed project; and

(2) A comparison of these costs which shall be within 10% of the 2008 edition of Marshall Valuation Service, section 15, for the proposed class and type of construction; and

(3) An identification of the square footage for each department or area before and after the project;

(c) Applicants shall include a report in the application which provides:

(1) An analysis of the class and quality of construction pursuant to section one of the 2008 Marshall Valuation Service;

(2) The allocation of costs within a multiple use building;

(3) The allocations of site costs and land costs where facilities are proposed to have multiple uses;

(4) The methodology used in calculating construction costs for renovations;

(5) The methodology used in calculating construction costs involving leasehold improvements; and

(6) The anticipated useful life of the building for depreciation purposes;

(d) The following construction costs shall be compared with the 2008 Marshall Valuation Service, section 15:

(1) Total costs associated with:

a. Labor;

b. Materials; and

c. Fixed equipment;

(2) Building permits;

(3) Architectural and engineering fees;

(4) Site preparation for the building;

(5) Utilities from structure to lot line;

(6) Insurance costs during construction; and

(7) Interest costs during construction;

(e) The applicant shall follow the outline of the calculator method set forth in section 10 of the 2008 Marshall Valuation Service to determine construction costs;

(f) The costs and factors to take into account pursuant to (e) above shall include:

(1) The base cost found in the general hospital table in section 15, page 24 of the 2008 Marshall Valuation Service:

(2) An adjustment to heating, ventilation and air-conditioning costs for extreme climate:

(3) Sprinkler system costs;

(4) Story height multipliers;

(5) Perimeter multipliers; and

(6) Cost multipliers from section 99 of the 2008 Marshall Valuation Service;

(g) For inpatient projects, applicants shall provide a comparison of the proposed construction cost per bed to the 2008 edition of the Marshall Valuation Service, section 15, page 38;

(h) For inpatient projects, applicants shall provide a comparison of the proposed area per bed to the 2008 edition of the Marshall Valuation Service, section 15, page 38;

(i) Applicants shall describe anticipated operational cost savings that may occur as a result of the project due to:

(1) Consolidation of services;

(2) Improved heating and maintenance costs;

(3) Environmental design of the constructed or renovated space;

(4) Space for future expansion; or

(5) Other factors not listed above.

(j) Applicants shall document the projected impact on hospital financial activity as a result of the proposed project;

(k) Documentation shall be made in the form of a report included with the application that contains:

(1) The trended and projected increases in net revenue per adjusted admission as calculated in He-Hea 1003.05 for the past 3 years and continuing through 3 years after project completion; and

(2) Any case mix adjustment that would apply.

(l) The expansion, renovation or replacement of the acute care facility shall be financially feasible;

(m) In order to assess the current and long-range financial feasibility of the proposed project, applicants shall demonstrate that resources:

(1) Are available to fund the proposed capital costs and operating costs;

(2) Will be available to maintain operations in the event of interruptions to cash flow; and

(3) Will be available to ensure the continued operation of the proposed project;

(n) Demonstration of financial feasibility shall be made by providing with the application:

(1) Copies of the facility's financial statements for the past 3 fiscal years and continuing through 3 years after project completion;

(2) A statement of the sources of funds to finance the proposed project;

(3) Documentation from the applicant's lender, underwriter or other anticipated source of capital, which includes:

a. Financed amount;

b. Rate of interest; and

c. Term of debt; and

(4) A computation of financial ratios as outlined in He-Hea 1004.02 through He-Hea 1004.05 for the past 3 years and continuing through 3 years after project completion using the financial figures in the applicant's historical and projected financial statements;

(o) Applicants shall demonstrate that resources will be available to support the personnel needs of the proposed expansion, renovation or replacement of the acute care facility;

(p) Demonstration of resources shall be made in the form of a report which provides a schedule of all personnel for the past 3 years and continuing through 3 years after project completion;

(q) Applicants shall document the assumptions used to determine the overall financial feasibility of the proposed projects to expand, renovate or replace their respective facilities;

(r) Documentation of assumptions shall be made in the form of a report which includes the following:

(1) The source of the documents used to determine the population projections of the primary and secondary service areas, if different than the office of energy and planning, 57 Regional Drive, Concord, NH;

(2) The changes in market conditions which would result in a change in market share;

(3) The causes of any anticipated changes in the overall length of stay in the hospital;

(4) The assumptions used to prepare the projected financial statements; and

(5) Other assumptions the applicant considers pertinent to the project's feasibility.

N.H. Admin. Code § He-Hea 1004.01

#4097, eff 7-22-86; ss by #4456, eff 7-25-88; ss by #4988, eff 11-21-90; ss by #5236, eff 9-27-91, EXPIRED:9-27-97

New. #6655, INTERIM, eff 12-18-97, EXPIRED: 4-17-98

New . #6840, eff 8-28-98, EXPIRED: 8-28-06

New. #8742, INTERIM, eff 10-21-06, EXPIRED: 4-19-07

New. #8918, eff 6-22-07; ss by #9457, eff 4-21-09