AN ACT relating to certificate of need.

UNOFFICIAL COPY 26 RS BR 976
Page 1 of 10
XXXX 9/29/2025 2:26 PM Jacketed
AN ACT relating to certificate of need. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 216B.015 is amended to read as follows: 3
Except as otherwise provided, for purposes of this chapter, the following definitions shall 4
apply: 5
(1) "Abortion facility" means any place in which an abortion is performed; 6
(2) "Administrative regulation" me ans a regulation adopted and promulgated pursuant 7
to the procedures in KRS Chapter 13A; 8
(3) "Affected persons" means the applicant; any person residing within the geographic 9
area served or to be served by the applicant; any person who regularly uses health 10
facilities within that geographic area; health facilities located in the health service 11
area in which the project is proposed to be located which provide services similar to 12
the services of the facility under review; health facilities which, prior to receipt by 13
the agency of the proposal being reviewed, have formally indicated an intention to 14
provide similar services in the future; and the cabinet and third -party payors who 15
reimburse health facilities for services in the health service area in which the project 16
is proposed to be located; 17
(4) (a) "Ambulatory surgical center" means a health facility: 18
1. Licensed pursuant to administrative regulations promulgated by the 19
cabinet; 20
2. That provides outpatient surgical services, excluding oral or dental 21
procedures; and 22
3. Seeking recognition and reimbursement as an ambulatory surgical center 23
from any fed eral, state, or third -party insurer from which payment is 24
sought. 25
(b) An ambulatory surgical center does not include the private offices of 26
physicians where in -office outpatient surgical procedures are performed as 27
UNOFFICIAL COPY 26 RS BR 976
Page 2 of 10
XXXX 9/29/2025 2:26 PM Jacketed
long as the physician office does not see k licensure, certification, 1
reimbursement, or recognition as an ambulatory surgical center from a 2
federal, state, or third-party insurer. 3
(c) [Nothing in ] This subsection shall not preclude a physician from negotiating 4
enhanced payment for outpatient surgi cal procedures performed in the 5
physician's private office so long as the physician does not seek recognition or 6
reimbursement of his or her office as an ambulatory surgical center without 7
first obtaining a certificate of need or license required under KRS 216B.020 8
and 216B.061; 9
(5) "Applicant" means any physician's office requesting a major medical equipment 10
expenditure exceeding the capital expenditure minimum, or any person, health 11
facility, or health service requesting a certificate of need or license; 12
(6) "Cabinet" means the Cabinet for Health and Family Services; 13
(7) "Capital expenditure" means an expenditure made by or on behalf of a health 14
facility which: 15
(a) Under generally accepted accounting principles is not properly chargeable as 16
an expense of o peration and maintenance or is not for investment purposes 17
only; or 18
(b) Is made to obtain by lease or comparable arrangement any facility or part 19
thereof or any equipment for a facility or part thereof; 20
(8) "Capital expenditure minimum" means an expenditure amount of at least fifteen 21
million dollars ($15,000,000) adjusted by the cabinet for inflation annually by an 22
increased rate of change in the nonseasonally adjusted annual average 23
Consumer Price Index for All Urban Consumers (CPI -U), U.S. City Average, A ll 24
Items, between the two (2) most recent calendar years available, as published by 25
the United States Bureau of Labor Statistics. The cabinet shall not decrease the 26
capital expenditure minimum[the annually adjusted amount set by the cabinet] . In 27
UNOFFICIAL COPY 26 RS BR 976
Page 3 of 10
XXXX 9/29/2025 2:26 PM Jacketed
determining whether an expenditure exceeds the capital expenditure minimum, the 1
cost of any studies, surveys, designs, plans, working drawings, specifications, and 2
other activities essential to the improvement, expansion, or replacement of any 3
plant or any equipment with respect to which the expenditure is made shall be 4
included. Donations of equipment or facilities to a health facility which if acquired 5
directly by the facility would be subject to review under this chapter shall be 6
considered a capital expenditure, and a transfer of the equipment or facilities for 7
less than fair market value shall be considered a capital expenditure if a transfer of 8
the equipment or facilities at fair market value would be subject to review; 9
(9) "Certificate of need" means an authori zation by the cabinet to acquire, to establish, 10
to offer, to substantially change the bed capacity, or to substantially change a health 11
service as covered by this chapter; 12
(10) "Certified surgical assistant" means a certified surgical assistant or certifie d first 13
assistant who is certified by the National Surgical Assistant Association on the 14
Certification of Surgical Assistants, the Liaison Council on Certification of Surgical 15
Technologists, or the American Board of Surgical Assistants. The certified surgi cal 16
assistant is an unlicensed health -care provider who is directly accountable to a 17
physician licensed under KRS Chapter 311 or, in the absence of a physician, to a 18
registered nurse licensed under KRS Chapter 314; 19
(11) "Continuing care retirement communit y" means a community that provides, on the 20
same campus, a continuum of residential living options and support services to 21
persons sixty (60) years of age or older under a written agreement. The residential 22
living options shall include independent living un its, nursing home beds, and either 23
assisted living units or personal care beds; 24
(12) "Formal review process" means the ninety (90) day certificate -of-need review 25
conducted by the cabinet; 26
(13) "Health facility" means any institution, place, building, agenc y, or portion thereof, 27
UNOFFICIAL COPY 26 RS BR 976
Page 4 of 10
XXXX 9/29/2025 2:26 PM Jacketed
public or private, whether organized for profit or not, used, operated, or designed to 1
provide medical diagnosis, treatment, nursing, rehabilitative, or preventive care and 2
includes alcohol abuse, drug abuse, and mental health servic es. This shall include 3
but[ shall] not be limited to health facilities and health services commonly referred 4
to as hospitals, psychiatric hospitals, physical rehabilitation hospitals, chemical 5
dependency programs, nursing facilities, nursing homes, persona l care homes, 6
intermediate care facilities, assisted living communities, family care homes, 7
outpatient clinics, ambulatory care facilities, ambulatory surgical centers, 8
emergency care centers and services, ambulance providers, hospices, community 9
mental health centers, home health agencies, kidney disease treatment centers and 10
freestanding hemodialysis units, freestanding birthing centers as defined in KRS 11
216B.198, and others providing similarly organized services regardless of 12
nomenclature; 13
(14) "Health s ervices" means clinically related services provided within the 14
Commonwealth to two (2) or more persons, including but not limited to diagnostic, 15
treatment, or rehabilitative services, and includes alcohol, drug abuse, and mental 16
health services; 17
(15) "Independent living" means the provision of living units and supportive services, 18
including but not limited to laundry, housekeeping, maintenance, activity direction, 19
security, dining options, and transportation; 20
(16) "Intraoperative surgical care" includes the practice of surgical assisting in which the 21
certified surgical assistant or physician assistant is working under the direction of 22
the operating physician as a first or second assist, and which may include the 23
following procedures: 24
(a) Positioning the patient; 25
(b) Preparing and draping the patient for the operative procedure; 26
(c) Observing the operative site during the operative procedure; 27
UNOFFICIAL COPY 26 RS BR 976
Page 5 of 10
XXXX 9/29/2025 2:26 PM Jacketed
(d) Providing the best possible exposure of the anatomy incident to the operative 1
procedure; 2
(e) Assisting in closure of incisions and wound dressings; and 3
(f) Performing any task, wi thin the role of an unlicensed assistive person, or if 4
the assistant is a physician assistant, performing any task within the role of a 5
physician assistant, as required by the operating physician incident to the 6
particular procedure being performed; 7
(17) "Major medical equipment" means equipment which is used for the provision of 8
medical and other health services and which costs in excess of the medical 9
equipment expenditure minimum. In determining whether medical equipment has a 10
value in excess of the medi cal equipment expenditure minimum, the value of 11
studies, surveys, designs, plans, working drawings, specifications, and other 12
activities essential to the acquisition of the equipment shall be included; 13
(18) "Major medical equipment expenditure minimum" mea ns an expenditure 14
amount of at least ten million dollars ($10,000,000) adjusted by the cabinet for 15
inflation annually by an increased rate of change in the nonseasonally adjusted 16
annual average Consumer Price Index for all Urban Consumers (CPI -U), U.S. 17
City Average, All Items, between the two (2) most recent calendar years available, 18
as published by the United States Bureau of Labor Statistics, except that the 19
cabinet shall not decrease the major medical equipment expenditure minimum; 20
(19)[(18)] "Nonsubstantive review" means an expedited review conducted by the cabinet 21
of an application for a certificate of need as authorized under KRS 216B.095; 22
(20)[(19)] "Nonclinically related expenditures" means expenditures for: 23
(a) Repairs, renovations, alterations, and improvements to the physical plant of a 24
health facility which do not result in a substantial change in beds, a substantial 25
change in a health service, or the addition of major medical equipment, and do 26
not constitute the replacement or relocation of a health facility; or 27
UNOFFICIAL COPY 26 RS BR 976
Page 6 of 10
XXXX 9/29/2025 2:26 PM Jacketed
(b) Projects which do not involve the provision of direct clinical patient care, 1
including but not limited to the following: 2
1. Parking facilities; 3
2. Telecommunications or telephone systems; 4
3. Management information systems; 5
4. Ventilation systems; 6
5. Heating or air conditioning, or both; 7
6. Energy conservation; or 8
7. Administrative offices; 9
(21)[(20)] "Party to the proceedings" means the applicant for a certificate of need and 10
any affected person who appears at a hearing on the matter un der consideration and 11
enters an appearance of record; 12
(22)[(21)] "Perioperative nursing" means a practice of nursing in which the nurse 13
provides preoperative, intraoperative, and postoperative nursing care to surgical 14
patients; 15
(23)[(22)] "Person" means an individual, a trust or estate, a partnership, a corporation, an 16
association, a group, state, or political subdivision or instrumentality including a 17
municipal corporation of a state; 18
(24)[(23)] "Physician assistant" means the same as the definition provid ed in KRS 19
311.550; 20
(25)[(24)] "Record" means, as applicable in a particular proceeding: 21
(a) The application and any information provided by the applicant at the request 22
of the cabinet; 23
(b) Any information provided by a holder of a certificate of need or li cense in 24
response to a notice of revocation of a certificate of need or license; 25
(c) Any memoranda or documents prepared by or for the cabinet regarding the 26
matter under review which were introduced at any hearing; 27
UNOFFICIAL COPY 26 RS BR 976
Page 7 of 10
XXXX 9/29/2025 2:26 PM Jacketed
(d) Any staff reports or recommendations prepared by or for the cabinet; 1
(e) Any recommendation or decision of the cabinet; 2
(f) Any testimony or documentary evidence adduced at a hearing; 3
(g) The findings of fact and opinions of the cabinet or the findings of fact and 4
recommendation of the hearing officer; and 5
(h) Any other items required by administrative regulations promulgated by the 6
cabinet; 7
(26)[(25)] "Registered nurse first assistant" means one who: 8
(a) Holds a current active registered nurse licensure; 9
(b) Is certified in perioperative nursing; and 10
(c) Has successfully completed and holds a degree or certificate from a 11
recognized program, which shall consist of: 12
1. The Association of Operating Room Nurse s, Inc., Core Curriculum for 13
the registered nurse first assistant; and 14
2. One (1) year of postbasic nursing study, which shall include at least 15
forty-five (45) hours of didactic instruction and one hundred twenty 16
(120) hours of clinical internship or its e quivalent of two (2) college 17
semesters. 18
A registered nurse who was certified prior to 1995 by the Certification Board of 19
Perioperative Nursing shall not be required to fulfill the requirements of paragraph 20
(c) of this subsection; 21
(27)[(26)] "Secretary" me ans the secretary of the Cabinet for Health and Family 22
Services; 23
(28)[(27)] "Sexual assault examination facility" means a licensed health facility, 24
emergency medical facility, primary care center, or a children's advocacy center or 25
rape crisis center that is regulated by the Cabinet for Health and Family Services, 26
and that provides sexual assault examinations under KRS 216B.400; 27
UNOFFICIAL COPY 26 RS BR 976
Page 8 of 10
XXXX 9/29/2025 2:26 PM Jacketed
(29)[(28)] "State health plan" means the document prepared triennially, updated 1
annually, and approved by the Governor; 2
(30)[(29)] "Substantial change in a health service" means: 3
(a) The addition of a health service for which there are review criteria and 4
standards in the state health plan; or 5
(b) The addition of a health service subject to licensure under this chapter; 6
(31)[(30)] "Substantial change in bed capacity" means the addition or reduction of beds 7
by licensure classification within a health facility; 8
(32)[(31)] "Substantial change in a project" means a change made to a pending or 9
approved project which results in: 10
(a) A substantial change in a health service, except a reduction or termination of a 11
health service; 12
(b) A substantial change in bed capacity, except for reductions; 13
(c) A change of location; or 14
(d) An increase in costs greater than the allowable amount as prescribed by 15
regulation; 16
(33)[(32)] "To acquire" means to obtain from another by purchase, transfer, lease, or 17
other comparable arrangement of the controlling interest of a capital asset or capital 18
stock, or voting rights of a corporation. An acquisition shall be d eemed to occur 19
when more than fifty percent (50%) of an existing capital asset or capital stock or 20
voting rights of a corporation is purchased, transferred, leased, or acquired by 21
comparable arrangement by one (1) person from another person; 22
(34)[(33)] "To batch" means to review in the same review cycle and, if applicable, give 23
comparative consideration to all filed applications pertaining to similar types of 24
services, facilities, or equipment affecting the same health service area; 25
(35)[(34)] "To establish" means to construct, develop, or initiate a health facility; 26
(36)[(35)] "To obligate" means to enter any enforceable contract for the construction, 27
UNOFFICIAL COPY 26 RS BR 976
Page 9 of 10
XXXX 9/29/2025 2:26 PM Jacketed
acquisition, lease, or financing of a capital asset. A contract shall be considered 1
enforceable when all contingencies and conditions in the contract have been met. 2
An option to purchase or lease which is not binding shall not be considered an 3
enforceable contract; and 4
(37)[(36)] "To offer" means, when used in connection with health services, to hold a 5
health facility out as capable of providing, or as having the means of providing, 6
specified health services. 7
Section 2. KRS 216B.061 is amended to read as follows: 8
(1) Unless otherwise provided in this chapter, a[no] person shall not do any of the 9
following without first obtaining a certificate of need: 10
(a) Establish a health facility if establishing it will cost more than the capital 11
expenditure minimum; 12
(b) [Obligate a capital expenditure which exceeds the capital expenditure 13
minimum; 14
(c) ]Make a substantial change in the bed capacity of a health facility if the 15
change will cost more than the capital expenditure minimum; 16
(c)[(d)] Make a substantial change in a health service if the change will cost 17
more than the capital expenditure minimum; 18
(d)[(e)] Make a substantial change in a project if the change will i ncrease the 19
cost of the project by more than ten percent (10%); 20
(e)[(f)] Acquire major medical equipment if the acquisition will cost more than 21
the major medical equipment expenditure minimum; 22
(f)[(g)] Alter a geographical area or alter a specific location which has been 23
designated on a certificate of need or license; or 24
(g)[(h)] Transfer an approved certificate of need for the establishment of a new 25
health facility or the replacement of a licensed facility. 26
(2) A[No] person shall not separate portions of a single project into components in 27
UNOFFICIAL COPY 26 RS BR 976
Page 10 of 10
XXXX 9/29/2025 2:26 PM Jacketed
order to evade any expenditure minimum set forth in this chapter. For purposes of 1
this chapter, the acquisition of one (1) or more items of functionally related 2
diagnostic or therapeutic equipment shall be considered as one (1) project. 3
(3) A[No] person shall not have ex parte contact with the final -decision-making 4
authority engaged in certificate of need activities regarding a certificate -of-need 5
application from the commencement of the review cycle to the final decision. If an 6
ex parte contact occurs, it shall be promptly made a part of the record. 7
(4) A[No] person shall not obligate a capital expenditure in excess of the amount 8
authorized by an existing certificate of need unless the person has received an 9
administrative escalation from the cabinet as prescribed by regulation. 10
(5) A[No] person shall not proceed to obligate a capital expenditure under an approved 11
certificate of need if there has been a substantial change in the project. 12
(6) A certificate of need shall be issued for a specific location and, when applicable, for 13
a designated geographical area. 14
(7) A[No] person shall not establish an ambulatory surgical center as defined in KRS 15
216B.015 without obtaining a certificate of need. An ambulatory surgical center 16
shall require a certificate of need and license, notwithstanding any exemption 17
contained in KRS 216B.020. 18
(8) [Nothing in ]This chapter shall not be interpreted to require any ambulatory surgical 19
center licensed as of July 12, 2012, to obtain a certificate of need to continue 20
operations and exercise all of the rights of a licensed health care facility, regardless 21
of whether it obtained a certificate of need before being licensed. 22