DOH Issues New Hospital CN Rule & Transparency Requirements

Prior to the end of the year, and in compliance with Governor Inslee’s directive, the Washington Department of Health (DOH) issued new hospital Certificate of Need (CN) rules and transparency requirements for existing hospitals.

Effective January 23rd, hospitals wishing to affiliate with one another (or other types of corporate restructuring) will now have to undergo full CN review.  The new rules modify WAC 246-310-010 and adopt a broad definition of “sale, purchase, or lease” to include affiliations, corporate membership restructuring, “or any other transaction.”  DOH, in response to the over 1,000 public comments received on these new rules (including the transparency rules below) explained:

The purpose of this clarification is to focus on the outcome of these transactions to bring them within CoN review.  CoN evaluation includes review of the reduction or loss of services and the community’s access to alternatives if there is a reduction or loss.

In addition, DOH issued a modification to the hospital licensing requirements.  This modification now requires hospitals to submit to DOH and publish on their own websites (“readily accessible to the public”) the following policies related to access to care:  admission, nondiscrimination, end of life care, and reproductive health care.  Hospitals must comply with this requirement no later than March 24, 2014.  Hospitals that make changes to these policies must also notify DOH of those changes within thirty days.

Since the amendment to the hospital licensing rules require online access to hospitals’ nondiscrimination policies, now is an excellent time for hospitals to review nondiscrimination policies to be sure they are consistent with all applicable laws.  Hospitals are “places of accommodation” under local, state, and federal nondiscrimination laws, which vary by jurisdiction.  For example, federal law prohibits genetic discrimination, which is not covered by Washington state law; state law prohibits discrimination on the basis of marital status, sexual orientation, and gender expression or identity, which are not covered under federal law; and the City of Seattle prohibits discrimination on the basis of political ideology, which is not covered under state or federal law.  Hospital nondiscrimination policies should be tailored to cover all the jurisdictions in which you provide services.  For assistance with drafting a nondiscrimination policy please contact Karen Sutherland.

For more information about the access to care policies or certificate of need generally please contact Elana Zana.



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.