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.



Proposed CN Rules on Hospital Change of Control & Transparency

The Washington State Department of Health recently released its proposed rules and letter to Governor Inslee with regard to his directive to open rule making on the Certificate of Need (“CN”) hospital change of control regulations and transparency.  The catalyst for these modifications is the recent spate of affiliations among Washington state hospitals.  The Department of Health was instructed to consider “how the structure of affiliations, corporate restructuring, mergers, and other arrangements among health care facilities result in outcomes similar to the traditional methods of sales, purchasing and leasing of hospitals.”  The current rules require a CN for any “sale, purchase, or lease” of a hospital, but does not provide a definition to explain what is encompassed by a “sale, purchase, or lease”.   The Department of Health has issued its proposed rules creating a definition of “sale, purchase, or lease” in WAC 246-310-010 as follows:

“Sale, purchase, or lease” means any transaction in which the control, either 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.”  WAC 246-310-010(54) (proposed)

The Governor’s directive also focused on transparency for consumers:

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.

As a result of comments received from stakeholders, the Department of Health determined that the submission and posting of hospital access policies should be located in the hospital licensing rules, rather than in the CN rules.  The proposed rules suggest adding new provisions to the hospital licensing regulations, specifically WAC 246-320-141 governing patient rights and organizational ethics:

(5) No later than sixty days following the effective date of this section, every hospital must submit to the department its policies related to access to care:
(a) Admission;
(b) Nondiscrimination;
(c) End of life care; and
(d) Reproductive health care.
(6) The department shall post a copy of the policies received under subsection (5) of this section on its web site.
(7) If a hospital makes changes or additions to any of the policies listed under subsection (5) of this section, it must submit a copy of the changed or added policy to the department within thirty days after the hospital approves the changes or additions.
(8) Hospitals must post a copy of the policies provided under subsection (5) of this section to its own web site where it is readily accessible to the public, without requiring a login or other restriction.
The Department of Health is soliciting feedback and hosting a hearing on November 26, 2013 at 1 PM to review the proposed rules.  It expects to file permanent rules on December 10, 2013.
If you have any questions regarding these proposed rules or Certificate of Need in general please contact Elana Zana.