Washington Certificate of Need Program Commences Rule Making: Consumer Transparency in Affiliations & Dialysis

The Washington State Certificate of Need Program has announced its commencement of the rule-making process related to hospitals and dialysis.  This action is in response to the directive issued last month by Governor Inslee instructing the CN Program to expedite rule making related to the corporate restructuring, affiliations, acquisitions and mergers occurring in hospitals across the state.  His directive requires that:

The Certificate of Need process should be applied based on the effect that these transactions have on the accessibility of health services, cost containment, and quality, rather than on the terminology used in describing the transactions or the representations made in the preliminary documents.

The Department’s rulemaking process shall also consider ways to improve transparency for consumer information and ease of use, specifically the Department shall ensure hospitals supply non-discrimination, end of life care and reproductive health care policies; and the Department shall ensure that consumers have access to the policies on its webpage. The Department’s rulemaking process shall also consider the factors in RCW 43.06.155, the principles and policies in the implementation of health reform, including the guarantee of choice for patients.

In response to this directive, the CN Program has released concept rules to implement the directive.  These concept rules contain two significant modifications:

1.  A new defined term in WAC 246-310-010: “Sale, purchase, or lease” means any transaction in which the control, directly or indirectly, of part or all of any existing hospital changes to a different person, including but not limited to by contract, affiliation, corporate membership restructuring, or any other transaction.

This change is significant, as the “sale, purchase, or lease” of all or part of an existing hospital is subject to the CN rules and review.  The new definition expands the applicability of the CN rules and review.  Whereas previously affiliations were typically reviewed under Determinations of Reviewability, the expanded definition would subject such transactions to CN approval.

2.  A new section which collects hospital policies, maintains the policies and list of limitations on certain services online, and requires all hospitals to submit these policies and lists within 60 days of the effective date of the new rule.  The proposed new section is reproduced below:

New Section WAC 246-310-XXX Collection of Hospital Policies

1) Every hospital must submit to the department its following policies related to access to care:

a) Admission;

b) Non-discrimination;

c) End of life care; and

d) Reproductive health care.

2) If the effect of one or more of a hospital’s policies required under subsection (1) of this section limits or excludes access to services authorized by law, the hospital must submit to the department a list of services that are limited or not available at the facility.

3) The department shall post a copy of the policies received under subsection (1) of this section and lists received under subsection (2) of this section on its website.

4) If the hospital makes changes to any of the policies listed under subsection (1) of this section, it must submit a copy of the changed policy to the department within thirty days after the hospital approves of the changes.

5) No later than sixty days following the effective date of this rule each hospital must submit to the department the documents identified under subsections (1) and (2) of this section.

These proposed rules will have an impact on future transactions and existing hospitals.  The proposed revisions will be discussed at an August 5th workshop located at the Department of Health.

If you would like further information about these proposed rules or certificate of need in general please contact Elana Zana.