Long awaited revisions to Virginia’s Certificate of Public Need (“COPN”) process take effect July 1, 2020. These revisions come after years of efforts by healthcare professionals, advocates, and health care plans to reform the process by which medical care facilities in Virginia are able to introduce new services and equipment. In June 2019, Governor Ralph Northam assembled a workgroup to discuss Virginia’s COPN program, consistent with his administration’s priority of reforming the COPN process. However, the workgroup was unable to agree on general reform measures, leading to the dissolution of the group without any consensus or action. Ultimately, the Governor signed into law Chapter 1271 of the Acts of Assembly, which implements some small consensus changes to the COPN program but primarily directs the Department of Health and Secretary of Health and Human Resources to develop and submit recommendations for further needed reforms to the COPN program to the Governor and General Assembly by the end of 2020 (or, more likely, as soon thereafter as COVID-19 will allow).
The legislative changes as written seek to improve public awareness and participation in the COPN process and to make the process more time efficient by removing certain projects from the review process and shortening review periods for other projects. This Client Advisory discusses the highlights of the updates to the new law and the law’s impact on the current COPN process. The Governor also enacted Chapter 227 of the Acts of Assembly, which goes into effect on July 1, 2020. Chapter 227 clarifies a statutory COPN service area consideration, i.e., in determining whether a need for a proposed project has been demonstrated, the State Health Commissioner shall consider the impact of the proposed project on all people utilizing services within the planning district, rather than only residents of the service area.
Call for Recommendations from Department of Health and Secretary of Health and Human Services
An enactment clause in Chapter 1271 provides for the development of recommendations to submit to the Governor and the General Assembly and implementation of new systems to improve the review of COPN applications. The Department of Health shall develop and submit recommendations by December 1, 2020 on how to reduce the duration of the average review cycle to not more than 120 days from the date that the Department receives a letter of intent for a project. In developing those recommendations, the Department shall consider changes intended to reduce the duration of the review period, such as the elimination of reviewing applications for completeness, reducing the 70-day period for the Department to review, providing a recommendation to the Commissioner on a project, and requiring an earlier public hearing on applications.
By January 1, 2021, or as soon thereafter as practical, the Secretary of Health and Human Resources must implement systems designed to offer more transparency to the public regarding the COPN process. For instance, the Secretary of Health and Human Resources must implement a system that ensures the timeliness and reliability of the data needed to evaluate an application’s consistency with the State Health Services Plan requirements. The Secretary of Health and Human Resources must develop and implement a system that will make all public records pertaining to COPN applications and the review process available online in a searchable, digital format as the records are received. The Secretary of Health and Human Resources must also create an inventory of capacity based on approved COPN certificates, both operational and not yet operational, available in an online digital format. Finally, the Secretary of Health and Human Resources will establish a public education and outreach program that will improve public awareness of the COPN process and the public’s role in such process, including the public’s ability to submit comments on applications and request public hearings.
The State Medical Facilities Plan is now the State Health Services Plan
Chapter 1271 renames the State Medical Facilities Plan the State Health Services Plan and establishes a Task Force to advise the Board on the content of the State Health Services Plan. The Task Force is to provide recommendations related to: periodic revisions of the plan, the specific objective standards of review for each type of project that requires a COPN, project types that are generally non-contested and present limited health planning impacts, whether certain projects should be subject to expedited review rather than the full review process, and improvements in the COPN process.
Specifically, Chapter 1271 directs the Task Force to develop and submit recommendations for a comprehensive State Health Services Plan by November 1, 2020 that include:
Chapter 1271 directs the Task Force to review annually, and if necessary, develop recommended revisions, to the State Health Services Plan at least every two years. The new law charges the Department to post on its website information regarding the process by which the Task Force creates the State Health Services Plan and how the Department determines whether a proposed project is consistent with the State Health Services Plan, in furtherance of the overall goal of providing additional public awareness and insight into the review process.
Removal of Certain Projects from Review Process
The new law removes certain projects from the definition of “medical care facilities” that are subject to the COPN review process. Specialized centers or portions of a physician’s office that are used for the provision of lithotripsy, magnetic source imaging, or nuclear medicine imaging are no longer considered reviewable medical care facilities. Similarly, the introduction to or addition of any new lithotripsy, magnetic source imaging, or obstetrical service to an existing medical facility is no longer included in the definition of a “project” requiring COPN approval. Instead, the law requires that regulations be promulgated requiring the registration of any new or additional equipment for the provision of lithotripsy, stereotactic radiosurgery, stereotactic radiotherapy performed using a linear accelerator or other medical equipment that uses concentrated doses of high-energy X-rays to perform external beam radiation therapy, obstetrical, or nuclear imaging services. Such registration regulations will include provisions requiring the registrant to provide indigent care, obtain accreditation, and report utilization and other Board-required data.
Updates to Administrative Procedures
Chapter 1271 introduces minor changes to the administrative procedures intended to simplify and expedite the review process. As of July 1, 2020, applicants must file completed applications electronically rather than through mail or hand delivery. While prior Department procedure was more lenient on providing supplemental information to an application after its submission, the law clarifies that an application will only be considered complete when all sections of the application have responses. The applicant is expected to provide sufficient information to prove public need with the initial application without the addition of later supplemental material.
In order to encourage more public participation in the review process, Chapter 1271 directs the Department to solicit public comment within ten days following the start of the review cycle by posting a notice and a summary of the project, including information on how the public can submit comments and concerns.
Finally, Chapter 1271 amends the time period in which a person may seek to demonstrate good cause and be made a party to the project review. In the past, petitioners have been able to request to be made a party and present reasons supporting the request until the 80th calendar day following the beginning of the review cycle. However, the law now requires such request be made no later than four days after the Department’s Division of COPN has completed its review and submitted its recommendation to the State Health Commissioner.
Conditions on Certificates
The Department has historically used COPN conditions to increase the availability of care for indigent residents of the Commonwealth. The new law clarifies the charity care conditions that the State Health Commissioner may place on a COPN. The Commissioner may condition the issuance of a COPN upon the party’s agreement to provide care to individuals eligible for benefits under Titles XVIII and XIX of the Social Security Act, as well as 10 U.S.C. 1071. This has been common practice in recent Department history, but the new law now formally makes it a required condition. In addition, the law permits the State Health Commissioner to condition the issuance of a COPN on the party’s agreement to provide specialty medical services or pay assessments and make contributions into the Health Care Coverage Assessment Fund.
Every COPN holder must develop a financial assistance policy that includes specific eligibility criteria and procedures for applying for this financial assistance. The COPN holder must make this policy available to all patients upon admission, discharge, or at the time a service is provided. Through any bills sent to uninsured patients, posts in public areas, and posts on the COPN holder’s website, the COPN holder must advise the public of the financial assistance policy’s availability.
Further, the certificate holder must annually provide documentation to the Department showing that it is compliant with the conditions of its issued COPNs. This requirement may facilitate Department imposition of civil penalties for noncompliance.
Chapter 1271’s implementation adds some additional reporting requirements to COPN holders and emphasizes a facility’s need to provide adequate charity care and assist patients in obtaining needed medical assistance. The Department and Secretary of Health and Human Resources will now undertake a review of the State Health Services Plan and determine what additional changes should be made to determine public need for a new project, as well as identify a reliable data source to use in such review.
The overall goals of the changes implemented by the new law are expediting the review process rather than keeping projects locked up in a long administrative review, while also increasing public awareness of the projects proposed in their communities and encouraging the public to participate and offer feedback on these projects. Chapter 1271 passes responsibility for making many of the substantive changes to the Department and the Secretary of Health and Human Resources. Despite the Governor’s hope to overhaul the COPN program, for now, the changes to the new law are minor and ultimately do not affect many projects or medical facilities that are subject to COPN review and approval. Facilities going through the COPN review process should take note of the new administrative filing procedures and deadlines and be cognizant of the changes to public involvement in the review process.
Should you, your practice, or your business have any questions about the implications of the new COPN legislation, please contact Peter Mellette, Harrison Gibbs, Elizabeth Dahl Coleman, or Scott Daisley at Mellette PC.
This client advisory is for general educational purposes only and does not cover every provision of the new COPN legislation. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.