Certificate of need; to remove requirement for new or expanded health care facilities and services in rural area

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SB82
TBWAC91-1
By Senators Stutts, Orr
RFD: Healthcare
First Read: 13-Jan-26
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TBWAC91-1 12/17/2025 JC (L)LG 2025-3599
Page 1
First Read: 13-Jan-26
SYNOPSIS:
Under existing law, health care institutions and
providers, with some exceptions, must apply for and
obtain a certificate of need as a requirement for
constructing new medical facilities or offering new or
expanded health care services.
This bill would eliminate the certificate of
need requirement for any proposed new or expanded
medical facility or health care service that is to be
located in a rural area.
This bill would require rural health care
providers to continue to submit reports to the State
Health Planning and Development Agency.
This bill would also delete duplicative language
and would also make nonsubstantive, technical revisions
to update the existing code language to current style.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Certificate of Need Program; to amend
Sections 22-4-32, 22-21-260, 22-21-263, 22-21-265, and
22-21-271, Code of Alabama 1975; and to repeal Section
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22-21-271, Code of Alabama 1975; and to repeal Section
22-21-278, Code of Alabama 1975; to eliminate the certificate
of need requirement for new or expanded health care facilities
and services in rural areas; to provide a definition for
"rural area"; to require health care institutions and services
in rural areas to submit reports to the State Health Planning
and Development Agency; and to delete duplicative language and
make nonsubstantive, technical revisions to update the
existing code language to current style.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 22-4-32, 22-21-260, 22-21-263,
22-21-265, and 22-21-271, Code of Alabama 1975, are amended to
read as follows:
"§22-4-32
For purposes of this article, the following terms shall
have the following meanings:
(1) CERTIFICATE OF NEED REVIEW BOARD. The board which
reviews all certificate of need applications as provided in
Section 22-21-260 (14).
(2) COVERED HEALTH CARE REPORTER. The term includes
health care facilities as that term is defined in Section
22-21-260 (6); new institutional health services subject to
review as defined in Section 22-21-263; a facility or
institution for the care or treatment of any kind of mental or
emotional illness or substance abuse or for providing services
to persons with intellectual disabilities as defined in
Section 22-50-17; and facilities and distinct units as defined
in Section 22-21-263 (c); and includes any of the foregoing in
any rural area as defined in Section 22-21-260 .
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any rural area as defined in Section 22-21-260 .
(3)(4) HEALTH CARE REPORTS. The written reports to the
SHPDA which are required to be submitted by this article.
(4)(3) HEALTH CARE INFORMATION AND DATA ADVISORY
COUNCIL. The body created by this article which is charged
with advising and participating in the writing of rules
necessary to implement this article and reviewing reports
prior to dissemination by the SHPDA.
(5) SHPDA. The State Health Planning and Development
Agency.
(6) STATE STATEWIDE HEALTH COORDINATING COUNCIL. The
council which is defined in Section 22-21-260 (15)."
"§22-21-260
As used in this article, the following words and terms,
and the plurals thereof, shall have the meanings ascribed to
them in this section, unless otherwise required by their
respective context:
(1) ACQUISITION. Obtaining the legal equitable title to
a freehold or leasehold estate or otherwise obtaining the
substantial benefit of such titles or estates, whether by
purchase, lease, loan or suffrage, gift, devise, legacy,
settlement of a trust , or means whatever, and shall include
any act of acquisition. The term "acquisition" shall does not
mean or include :
a. anyAny conveyance, or creation of any lien or
security interest by mortgage, deed of trust, security
agreement, or similar financing instrument , nor shall it mean
or include any ;
b. Any transfer of title or rights as a result of the
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b. Any transfer of title or rights as a result of the
foreclosure, or conveyance or transfer in lieu of the
foreclosure, of any such mortgage, deed of trust, security
agreement, or similar financing instrument , nor shall it mean
or include any ; or
c. Any gift, devise, legacy, settlement of trust, or
other transfer of the legal or equitable title of an interest
specified hereinabove by a natural person an individual to any
member of such person's the individual's immediate family. For
the purposes of this section paragraph, "immediate family"
shall mean means the spouse of the grantor or transferor and
any other person related to the grantor or transferor to the
fourth degree of kindred as such degrees are computed
according to law.
(2) APPLICANT. Any person, as defined in this section,
who files an application for a certificate of need.
(2.1)(3) CAMPUS. The contiguous real property,
contained within a single county, which is owned or leased by
a health care facility and upon which is located the buildings
and any other real property used by the health care facility
to provide existing institutional health services which are
subject to review.
(3)(4) CAPITAL EXPENDITURE. An expenditure, including a
force account expenditure (i.e., an expenditure for a
construction project undertaken by the health care facility as
its own contractor), which, under generally accepted
accounting principles, is not properly chargeable as an
expense of operation and maintenance and which satisfies any
of the following:
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of the following:
a. Exceeds two million dollars ($2,000,000) indexed
annually for inflation for major medical equipment; eight
hundred thousand dollars ($800,000) for new annual operating
costs indexed annually for inflation; four million dollars
($4,000,000) indexed annually for inflation for any other
capital expenditure. The index referenced in this paragraph
shall be the Consumer Price Index Market Basket Professional
Medical Services index as published by the U.S. Department of
Labor, Bureau of Labor Statistics. The SHPDA shall publish
this index information to the general public.
b. Changes the bed capacity of the facility with
respect to which such expenditure is made.
c. Substantially changes the health services of the
facility with respect to which such expenditure is made.
(4)(5) CONSTRUCTION. Actual commencement, with bona
fide intention of completing the construction, or completion
of the construction, erection, remodeling, relocation,
excavation, or fabrication of any real property constituting a
facility under this article, and the term construct shall mean
and include means and includes any act of construction. "Ground
breaking ceremony," "receipt of bids," "receipt of quotation,"
or similar action that will permit unilateral termination
without penalty shall not be considered construction.
(5)(6) FIRM COMMITMENT or OBLIGATION. Any of the
following:
a. Any executed, enforceable, unconditional written
agreement or contract not subject to unilateral cancellation
for the acquisition or construction of a health care facility
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for the acquisition or construction of a health care facility
or purchase of equipment therefor.
b. Actual construction of facilities peculiarly adapted
to the furnishing of one or more particular services and with
the bona fide intention of furnishing such service or
services.
c. Any executed, unconditional written agreement not
subject to unilateral cancellation for the bona fide purpose
of furnishing one or more services.
(6)(7) HEALTH CARE FACILITY. General and specialized
hospitals, including tuberculosis, psychiatric, long-term
care, and other types of hospitals, and related facilities
such as, laboratories, out-patient clinics, and central
service facilities operated in connection with hospitals;
skilled nursing facilities; intermediate care facilities;
skilled or intermediate care units operated in veterans'
nursing homes and veterans' homes, owned or operated by the
State Department of Veterans' Veterans Affairs, as these terms
are described in Chapter 5A , (commencing with Section
31-5A-1 ), of Title 31, rehabilitation centers; public health
centers; facilities for surgical treatment of patients not
requiring hospitalization; kidney disease treatment centers,
including free-standing hemodialysis units; community mental
health centers and related facilities; alcohol and drug abuse
facilities; facilities for the developmentally disabled;
hospice service providers; and home health agencies and health
maintenance organizations. The term health care facility
shalldoes not include the offices of private physicians or
dentists, whether for individual or group practices and
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dentists, whether for individual or group practices and
regardless of ownership, or Christian Science sanatoriums
operated or listed and certified by the First Church of
Christ, Scientist, Boston, Massachusetts, or a veterans'
nursing home or veterans' home owned or operated by the State
Department of Veterans' Veterans Affairs, not to exceed 150
beds to be built in Bay Minette, Alabama, and a veterans'
nursing home or veterans' home owned or operated by the State
Department of Veterans' Veterans Affairs not to exceed 150 beds
to be built in Huntsville, Alabama, for which applications for
federal funds under federal law are being considered by the
U.S. Department of Veterans' Veterans Affairs prior to March
18, 1993.
(7)(8) HEALTH SERVICE AREA. A geographical area
designated by the Governor, as being appropriate for effective
planning and development of health services.
(8)(9) HEALTH SERVICES. Clinically related (i.e.,
diagnostic, curative, or rehabilitative) services, including
alcohol, drug abuse, and mental health services customarily
furnished on either an in-patient or out-patient basis by
health care facilities, but not including the lawful practice
of any profession or vocation conducted independently of a
health care facility and in accordance with applicable
licensing laws of this state.
(9)(10) INSTITUTIONAL HEALTH SERVICES. Health services
provided in or through health care facilities or health
maintenance organizations, including the entities in or
through which such services are provided.
(9.1)(11) MAJOR MEDICAL EQUIPMENT. Medical clinical
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(9.1)(11) MAJOR MEDICAL EQUIPMENT. Medical clinical
equipment intended for use in the diagnosis or treatment of
medical conditions, which is used to provide institutional
health services of a health care facility which are subject to
review, and which expenditure exceeds the thresholds
referenced in this section and in Section 22-21-263.
(10)(12) MODERNIZATION. The alteration, repair,
remodeling, and renovation of existing buildings, including
equipment within the existing buildings. Modernization does
not include the replacement of existing buildings which are
used by a health care facility to provide institutional health
services which are subject to review and does not include the
replacement of major medical equipment.
(11)(14) PERSON. Any person individual , firm,
partnership, association, joint venture, corporation, limited
liability company, or other legal entity, the State of Alabama
and its political subdivisions or parts thereof, and any
agencies or instrumentalities and any combination of persons
herein specified, but person shall the term does not include
the United States or any agency or instrumentality thereof,
except in the case of voluntary submission to the regulations
established by this article.
(12) RURAL HEALTH CARE PROVIDER/APPLICANT/HOSPITAL. A
provider or applicant or hospital which is designated by the
United States government Health Care Financing Administration
as rural (15) RURAL AREA. Any area in the State of Alabama
which is located outside of a metropolitan statistical area
that is listed in the Office of Management and Budget Bulletin
No.20-01 dated March 6, 2020 .
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No.20-01 dated March 6, 2020 .
(13)(16) STATE HEALTH PLAN. a. A comprehensive plan
which is prepared triennially and reviewed at least annually
and revised as necessary by the Statewide Health Coordinating
Council, with the assistance of the State Health Planning and
Development Agency, and approved by the Governor.
b. The Statewide Health Coordinating Council shall meet
at least annually to determine whether revisions for the State
Health Plan are necessary. If the Statewide Health
Coordinating Council fails to meet and to review or revise the
State Health Plan on an annual basis, there shall be no fees
required on all certificate of need applications filed with
the Certificate of Need Review Board until the Statewide
Health Coordinating Council meets and reviews or revises the
State Health Plan. For purposes of this paragraph, the annual
meeting of the Statewide Health Coordinating Council shall
occur on or before August 1 of each calendar year.
c. The State Health Plan shall provide for the
development of health programs and resources to assure that
quality health services will be available and accessible in a
manner which assures continuity of care, at reasonable costs,
for all residents of the state. Nothing in this section should
be construed as permitting expenditures for facilities,
services, or equipment which are inconsistent with the State
Health Plan.
(14)(17) STATE HEALTH PLANNING AND DEVELOPMENT AGENCY
(SHPDA) or STATE AGENCY or SHPDA . An agency of the State of
Alabama which is designated by the Governor as the sole State
Health Planning and Development Agency, which shall consist of
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Health Planning and Development Agency, which shall consist of
three consumers, three providers, and three representatives of
the Governor who all shall serve staggered terms and all be
appointed by the Governor. Where used in this article, the
terms, "state agency," and the "SHPDA," shall be synonymous
and may be used interchangeably .
(15)(18) STATEWIDE HEALTH COORDINATING COUNCIL. A
council , appointed by the Governor ,- established pursuant to
Sections 22-4-7 and 22-4-8 to advise the State Health Planning
and Development Agency on matters relating to health planning
and resource development and to perform other functions as may
be delegated to it, to include an annual review of the State
Health Plan.
(16)(13) TO OFFER. When used in connection with health
services, a health care facility or health maintenance
organization that holds itself out as capable of providing, or
as having the means for the provision of, specified health
services."
"§22-21-263
(a) All new institutional health services whichthat are
subject to this article and whichthat are proposed to be
offered or developed within the state shall be subject to
review under this article. No institutional health services
whichthat are subject to this article shall be permitted which
are inconsistent with the State Health Plan. For the purposes
of this article, new institutional health services shall
include any of the following:
(1) The construction, development, acquisition through
lease or purchase, or other establishment of a new health care
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lease or purchase, or other establishment of a new health care
facility or health maintenance organization. A transaction
involving the sale, lease, or other transfer or change of
control of an existing health care facility, existing health
maintenance organization, or existing institutional health
service is not subject to certificate of need review or
approval under this article unless the transaction also
involves implementing one or more of the new institutional
health services described in subdivision (2), (3), or (4). The
two immediately preceding sentences are applicable to all
transactions occurring on or after July 30, 1979.
Notwithstanding anything to the contrary in this article,
expenditures incurred in the sale, lease, or other transfer of
an existing health care facility or existing health
maintenance organization or existing institutional health
service shall not be subject to subdivision (2).
(2) Any expenditure by or on behalf of a health care
facility or health maintenance organization which, under
generally accepted accounting principles consistently applied,
is a capital expenditure in excess of two million dollars
($2,000,000) indexed annually for inflation for major medical
equipment; in excess of eight hundred thousand dollars
($800,000) for new annual operating costs indexed annually for
inflation; and in excess of four million dollars ($4,000,000)
indexed annually for inflation for any other capital
expenditure by or on behalf of a health care facility or a
health maintenance organization. The index referenced in this
subdivision shall be the Consumer Price Index Market Basket
Professional Medical Services index as published by the U.S.
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Professional Medical Services index as published by the U.S.
Department of Labor, Bureau of Labor Statistics. The SHPDA
shall publish this index information to the general public.
(3) A change in the existing bed capacity of a health
care facility or health maintenance organization through the
addition of new beds, the relocation of one or more beds from
one physical facility to another, or reallocation among
services of existing beds through the conversion of one or
more beds from one category to another within the following
bed categories: general medical surgical, inpatient
psychiatric, inpatient/residential alcohol and drug abuse or
inpatient rehabilitation beds, or long-term care beds
including skilled nursing care, intermediate care,
transitional care, and swing beds. Notwithstanding any
provision of this subdivision to the contrary, any health care
facility or health maintenance organization in which at least
65 percent of the beds are dedicated or used exclusively for
acute care services, general medical surgical, or
nonspecialized services may reallocate existing beds within
the following specialized bed categories: inpatient
psychiatric, inpatient/residential alcohol and drug
rehabilitation beds, to acute care services, or general
medical surgical beds without first obtaining a certificate of
need from the SHPDA.
(4) Health services proposed to be offered in or
through a health care facility or health maintenance
organization, and which were not offered on a regular basis in
or through suchthe health care facility or health maintenance
organization within the 12 month 12-month period prior to the
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organization within the 12 month 12-month period prior to the
time suchthe services would be offered. Health services, other
than those health services involving long-term care services,
including , without limitation, skilled and intermediate
nursing home care, swing beds services, or transitional care
services, provided directly by acute care hospitals classified
as rural by the U.S. Bureau of Census/Office of Management and
Budget, United States government Health Care Financing
Administration or acute care hospitals with less than 105 beds
that are located over 20 miles from the nearest acute health
care facility located within Alabama shall not be subject to
this subdivision but shall be subject to the other
subdivisions of this subsection. Provided, however, that
theThe exemption from this subdivision herein established
shall not apply to home health services provided outside of
the county in which the hospital is located.
(b) The four conditions of new institutional health
services listed in this section shall be mutually exclusive.
(c) Any new institutional health service, as described
in subsection (a), proposed to be offered or developed in a
rural area on or after October 1, 2026, shall not be subject
to review under this article.
(c)(d) Notwithstanding all other provisions of this
article to the contrary, those facilities and distinct units
operated by the Department of Mental Health and those
facilities and distinct units operating under contract or
subcontract with the Department of Mental Health where the
contract constitutes the primary source of income to the
facility shall not be subject to review under this article.
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facility shall not be subject to review under this article.
(d)(e) For the purposes of this article, and
notwithstanding all other provisions of this article to the
contrary and notwithstanding any and all provisions of the
State Health Plan on September 1, 2003, relating to
lithotripsy, magnetic resonance imaging, and positron emission
tomography , new institutional health services , which that are
subject to this article , shall not include any health services
provided by a mobile or fixed-based extracorporeal shock wave
lithotripter, mobile or fixed-based magnetic resonance
imaging, or positron emission tomography proposed to be
offered in or through a health care facility or health
maintenance organization . The SHPDA, after consultation with
and the advice of the Statewide Health Coordinating Council,
in accordance with the Alabama Administrative Procedure Act
and within 60 days of September 1, 2003, shall cause the State
Health Plan to be amended to repeal and delete all sections of
the Alabama State Health Plan relating to mobile and
fixed-based lithotripters, mobile and fixed-based magnetic
resonance imaging, and positron emission tomography, and cause
the amendment and repeal of any other SHPDA rules and
regulations inconsistent with this article ."
"§22-21-265
(a) On or after July 30, 1979, no No person to which
this article applies shall acquire, construct, or operate a
new institutional health service, as defined in this article,
or furnish or offer, or purport to furnish a new institutional
health service, as defined in this article, or make an
arrangement or commitment for financing the offering of a new
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arrangement or commitment for financing the offering of a new
institutional health service, unless the person shall first
obtain from the SHPDA a certificate of need therefor. , except
for the following, which shall not be required to obtain a
certificate of need:
(1) Any person who proposes to acquire, construct,
operate, furnish, or offer a new institutional health service,
to be located in a rural area, or who arranges for or commits
to the financing of the same.
(2) Notwithstanding any provisions provision of this
article to the contrary, those facilities and distinct units
operated by the Department of Mental Health, and those
facilities and distinct units operating under contract or
subcontract with the Department of Mental Health where the
contract constitutes the primary source of income to the
facility , shall not be required to obtain a certificate of
need under this article .
(b)(1) Notwithstanding all other provisions any other
provision of this article to the contrary, the replacement of
equipment by health care facilities shall be exempt from
certificate of need review, provided:
(1)a. The replacement does not change the purpose, use,
or application of the equipment .-;
(2)b. The existing equipment is taken out of service .-;
(3)c. The replacement equipment does not enable the
health care facility to expand its health services .; and
(4)d. The replacement equipment does not enable the
health care facility to provide any health services not
previously provided on a regular basis.
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previously provided on a regular basis.
(2) A determination of whether the acquisition of
equipment is exempt from review under this section shall be
made by the Executive Director of the SHPDA upon the filing of
an application requesting the determination, on the form or
forms prescribed by the CON Review Board, together with a fee
in the amount of 20 percent of the fee provided in Section
22-21-271. If it is determined that the replacement is not
reviewable pursuant to this section, the applicant shall be
notified in writing that no certificate of need is required.
The SHPDA shall define an appeals process.
Any provision in this article to the contrary
notwithstanding, a rural hospital shall only be required to
submit a fee equal to 25 percent of the fee applicable to
non-rural hospitals when filing a request for determination
under this section.
(c) Notwithstanding any other provision of this article
to the contrary, the modernization or construction of a
nonclinical building, parking facility, or any other
noninstitutional health services capital item on the existing
campus of a health care facility shall be exempt from
certificate of need review, provided the construction or
modernization does not allow the health care facility to
provide new institutional health services subject to review
and not previously provided on a regular basis.
(d) The SHPDA shall maintain the Alabama State Health
Plan to include separate bed need methodologies for inpatient
psychiatric services, inpatient rehabilitation services, and
inpatient/residential alcohol and drug abuse services. The
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inpatient/residential alcohol and drug abuse services. The
SHPDA shall utilize these methodologies in considering all
certificate of need applications.
(e) Notwithstanding all other provisions any other
provision of this article to the contrary, the increase in the
number of nursing home beds of a health care facility licensed
pursuant to Section 22-21-260(6) as a skilled nursing care
facility or an intermediate care facility, but excluding an
increase in the bed capacity of an intermediate care facility
designated as an ICF-MR by the State Board of Committee on
Public Health and operated by the state Department of Mental
Health which facilities shall be are governed by the other
provisions of this article, shall be are exempt from
certificate of need review, provided:
(1) The increase does not exceed 10 percent of the
total skilled nursing beds of the facility, rounded to the
nearest whole number, or 10 beds, whichever is greater.
(2) The average rate of occupancy for the nursing home
beds of the facility is not less than 95 percent, rounded to
the nearest whole number, for the 24-month period ending on
June 30 of the year immediately preceding the application for
exemption from the certificate of need review.
(3) The aggregate average rate of occupancy for all
other skilled nursing facilities and intermediate nursing
facilities in the same county as the requesting facility's is
not less than 95 percent, rounded to the nearest whole number,
for the 24-month period ending on June 30 of the year
immediately preceding the application for exemption from
certificate of need review.
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certificate of need review.
(4) The increase does not require capital expenditures
exceeding the capital expenditure thresholds prescribed in
Section 22-21-263(a)(2).
(5) The facility has not been granted an increase of
beds under this exemption within the immediately preceding
24-month period.
In calculating the average occupancy for the facility
under subdivision (2) of this subsection and for all other
skilled and intermediate nursing facilities in the same county
under subdivision (3) of this subsection , beds previously
granted, including beds granted after January 1, 1995, to the
facility, and to other skilled or intermediate nursing
facilities in the same county as the requesting facility,
pursuant to a certificate of need or to this exemption shall
be deemed built and available for occupancy as of the date
granted regardless of when the beds were placed in service.
The SHPDA shall promulgate regulations adopt rules to determine
how occupancy shall be calculated for the purpose of this
subsection, taking into account certain factors such as, but
without limitation, disregarding beds that have not been
available for use for the three years next preceding the
period for which occupancy is being measured.
(6) The facility has had an average daily census
comprised of 40 percent of Medicaid patients within the fiscal
year ended June 30 immediately prior to filing an application
for exemption under this section.
(7)a. Any exemption to add beds without a certificate
of need shall expire and be deemed null and void unless the
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of need shall expire and be deemed null and void unless the
beds are placed in service not less than 12 months after the
date the exemption is granted. Notwithstanding the foregoing,
the SHPDA may promulgate adopt rules permitting the Executive
Director of SHPDA to grant one extension not to exceed
twelve 12 months upon a showing of substantial progress.
Notwithstanding the foregoing, any exemption granted by the
SHPDA prior to April 10, 1995, for facilities which have
agreed to the provisions of the June 21, 1995 , consent decree,
is ratified and confirmed and shall be deemed to have been
granted in accordance with this subsection. In addition, any
facility which was granted an exemption by the SHPDA prior to
April 10, 1995, is ratified and confirmed and shall be deemed
to have been approved as of the latter of the actual date
approved or March 3, 1995 , and to have been granted in
accordance with this subsection.
b. A determination of whether the increase in beds is
exempt from review under this section shall be made by the
Executive Director of the SHPDA upon the filing of an
application requesting the determination, on the form or forms
prescribed by the CON Review Board, together with a fee in an
amount to be determined by the review board in accordance with
Section 22-21-271(a). The SHPDA shall promulgate adopt rules
affording an applicant pursuant to this subsection a right to
appeal adverse rulings.
c. Applications pursuant to this section for exemption
from certificate of need review for an increase in bed
capacity shall be made only during the 90-day period beginning
January 1 through March 31 of each year.
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January 1 through March 31 of each year.
d. The provisions of this section shall automatically
terminate and become null and void on December 31, 2005,
unless a bill to continue or reestablish the provisions of
this section shall be passed by both houses of the Legislature
and enacted into law.
(f)(1) Notwithstanding all other provisions any other
provision of this article to the contrary, an existing home
health agency may accept referrals of patients from outside
its Medicare certified service area without obtaining a
certificate of need, provided all of the following conditions
are met:
(1)a. The county of the referral is contiguous to a
county for which the home health agency holds a certificate of
need or an exemption granted pursuant to provisions of Section
22-21-263.
(2)b. The home health agency establishes no branch
office in the county of the referral.
(3)c. The home health agency incurs no capital
expenditures in the county of the referral in excess of five
hundred dollars ($500).
(2) The home health agency shall notify the SHPDA that
it has begun accepting referrals from a county contiguous to
its service area within 14 days of the receipt of the first
referral from the contiguous county. No notice to the SHPDA
shall be required related to subsequent referrals in the same
contiguous county. The SHPDA shall take steps to provide for
the inclusion of statistical information relating to the
service to referrals outside the Medicare certified service
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service to referrals outside the Medicare certified service
area in its annual statistical reports. The SHPDA may impose,
by rule, a reasonable charge upon home health agencies
accepting such referrals to cover the additional cost of
gathering and processing the information.
(g) Notwithstanding all other provisions any other
provision of this article to the contrary, the replacement,
including relocation in the same county, of an existing acute
care hospital by the construction of a new digital hospital
shall be exempt from certificate of need review provided the
hospital meets all of the following:
(1) The digital hospital design incorporates a fully
automated , centralized , digital system to integrate all
current and future medical technologies with capabilities for
all systems to interface in a comprehensive medical record.
The integration of medical technology shall include, but not
be limited to, all patient medical records, diagnostic images,
diagnostic reports, laboratory results, pharmacy data,
pharmacological interactions, contraindications, surgical
reports, surgical streaming video, pathology reports, unique
patient identification, voice activated transcription,
wireless applications, automated billing with electronic
transmission capability, and electronic procurement systems.
(2) The electronic medical systems shall interface on a
single electronic platform to produce the most favorable
patient outcome with a reduction in medical errors.
(3) Medical records shall only be accessed by
authorized clinical personnel who are provided access by
hospital consoles, physician offices, physician homes, or any
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hospital consoles, physician offices, physician homes, or any
remote location via unique identification requirements.
(4) Patient rooms shall be designed to provide optimal
electronic documentation of vital signs, real-time data entry,
any and all treatment protocols, physician orders, and patient
progression.
(5) The digital hospital shall have a minimum project
cost of one hundred million dollars ($100,000,000) to include
design, systems, property, buildings, equipment, and
electronic software development.
(6) The construction and design of the facility shall
utilize technology and materials for patient flow to limit
general public contact with patient care areas,
healthcare health care workers, and hazardous materials to
reduce the potential for cross-contamination and resulting
direct medical costs.
(7) The digital hospital environment shall be energy
efficient, cost effective, and clinically designed to produce
the most favorable environment.
(8) The digital hospital shall meet all of the
following conditions:
a. Operate as an acute care hospital.
b. Replace an existing acute care hospital located in
the same county as the digital hospital.
c. Be licensed for no more than the same number of
hospital beds and for the same bed categories as the existing
acute care hospital to be replaced by the digital hospital,
unless otherwise approved by the Certificate of Need Review
Board through issuance of a certificate of need.
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Board through issuance of a certificate of need.
d. Shall not exceed the same scope of health services,
including the same amount of diagnostic or therapeutic major
medical equipment, as the existing acute care hospital to be
replaced by the digital hospital, unless otherwise approved by
the SHPDA approval process.
e. Shall not exceed the number of inpatient and
outpatient surgical suites as contained in the existing acute
care hospital to be replaced by the digital hospital, unless
otherwise approved by the SHPDA approval process.
(9) The existing acute care hospital, replaced by the
digital hospital, shall be taken out of service as an acute
care hospital and shall not be converted to or used as another
health care facility, unless approved by the Certificate of
Need Review Board through issuance of a certificate of need.
(10) Any presently reviewable health service which is
proposed to be offered by the digital hospital which was not
offered on a regular basis within the preceding
twelve-month 12-month period in or through the existing acute
care hospital to be replaced by the digital hospital shall be
subject to Certificate of Need Review Board approval through
issuance of a certificate of need.
(11) The only digital hospital exempt from certificate
of need review shall be the first digital hospital developed
in the state, and the digital hospital shall be located in a
county where there is located an accredited medical school and
teaching facility and not less than 3,000 licensed general
hospital beds, and construction shall be commenced within one
year from the issuance of a certificate of need by the SHPDA.
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year from the issuance of a certificate of need by the SHPDA.
(12) A determination whether the construction of a
digital hospital is exempt from review under this subsection
shall be made by the Executive Director of the SHPDA, upon the
filing of an application requesting the determination, on the
forms acceptable to the Executive Director of the SHPDA
together with an application fee as provided in Section
22-21-271. If it is determined that the replacement facility
is not reviewable pursuant to this section, the SHPDA shall
notify the applicant in writing that the application is exempt
from certificate of need review and shall issue a certificate
of need. The applicant shall have a right of appeal from any
adverse ruling denying exemption and the SHPDA shall
promulgate adopt rules affording an applicant a right to appeal
adverse rulings pursuant to this subsection.
(13) The provisions of this subsection shall
automatically terminate and become null and void upon the
issuance of the first certificate of need for the construction
and operation of a digital replacement hospital as herein
provided or on December 31, 2005, whichever first occurs,
unless a bill to continue or reestablish the provisions of
this subsection shall be passed by both houses of the
Legislature and enacted into law."
"§22-21-271
(a) Each application for a certificate of need shall be
accompanied by a fee of one percent of the estimated cost of
the proposed cost of the new Institutional Health Service, or
a maximum of twelve thousand dollars ($12,000) (indexed) per
application. Provided, that the application fee shall be
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application. Provided, that the application fee shall be
three-fourths of one percent of the estimated cost of the
proposed new Institutional Health Service, or a maximum of
eight thousand dollars ($8,000) if the applicant has had an
average daily census comprised of 50 percent or more Medicaid
patients within the last year prior to the filing of the
application and a maximum of six thousand dollars ($6,000) if
a rural hospital applicant has had an average daily census
comprised of 30 percent or more Medicaid/Medicare patients
within the last year prior to the filing of the application .
The minimum fee shall be set by the SHPDA. Fees shall be used
for the purpose of defraying the lawful operating expense of
the certificate of need program conducted by the SHPDA and of
the Statewide Health Coordinating Council.
(b) Each request for an opinion from the State
Agency state agency as to whether a project is subject to
review under this article shall be accompanied by a fee to be
established by the SHPDA.
(c) The SHPDA, by rule approved by the Certificate of
Need Review Board or the Statewide Health Coordinating
Council, as applicable, may impose additional reasonable fees
for any administrative filing by a health care provider for
which a fee is not specified in this chapter, and for any
non-routine data compilation or summary. Nothing in this
subsection shall authorize the SHPDA to impose a fee for the
initial publication of any report or statistical update which
it is required to publish under law or rule.
(d) In addition to all other fees, the SHPDA shall
impose a temporary surcharge of two thousand dollars ($2,000)
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impose a temporary surcharge of two thousand dollars ($2,000)
on each certificate of need application and three hundred
dollars ($300) for each reviewability determination to defray
expenses incurred in developing and implementing, by January
1, 2014, an online, searchable filing system for filings and
orders in administrative proceedings and requests for
reviewability or exemption determinations and related agency
findings. The surcharge shall automatically terminate on the
first day of the ninth month after certification to the CON
Review Board by the SHPDA's Executive Director that the online
filing system has been successfully implemented.
(e) There is hereby authorized to be appropriated from
the State General Fund of the State of Alabama such amounts as
may be necessary from time to time to defray the costs of
administering this article over and above such fees as may be
collected under this section.
(f) Application fees collected under this article shall
not be refundable. Fees collected under this article are
hereby appropriated for the purposes stated in this article.
(g) All fees collected under this article shall be
retained in a separate fund for the purpose of enforcing and
administering this article, and shall be disbursed as other
funds of the state are disbursed."
Section 2. Section 22-21-278, Code of Alabama 1975,
relating to an exemption from the review requirement for
certain kidney disease treatment centers, is repealed.
Section 3. This act shall become effective on October
1, 2026.
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