Hospital construction moratorium exception provision

A bill for an act

relating to health; providing for an exception to the hospital construction

moratorium; amending Minnesota Statutes 2024, section 144.551, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 144.551, subdivision 1, is amended to read:

Subdivision 1.

Restricted construction or modification.

(a) The following construction

or modification may not be commenced:

(1) any erection, building, alteration, reconstruction, modernization, improvement,

extension, lease, or other acquisition by or on behalf of a hospital that increases the bed

capacity of a hospital, relocates hospital beds from one physical facility, complex, or site

to another, or otherwise results in an increase or redistribution of hospital beds within the

state; and

(2) the establishment of a new hospital.

(b) This section does not apply to:

(1) construction or relocation within a county by a hospital, clinic, or other health care

facility that is a national referral center engaged in substantial programs of patient care,

medical research, and medical education meeting state and national needs that receives more

than 40 percent of its patients from outside the state of Minnesota;

(2) a project for construction or modification for which a health care facility held an

approved certificate of need on May 1, 1984, regardless of the date of expiration of the

certificate;

(3) a project for which a certificate of need was denied before July 1, 1990, if a timely

appeal results in an order reversing the denial;

(4) a project exempted from certificate of need requirements by Laws 1981, chapter 200,

section 2;

(5) a project involving consolidation of pediatric specialty hospital services within the

Minneapolis-St. Paul metropolitan area that would not result in a net increase in the number

of pediatric specialty hospital beds among the hospitals being consolidated;

(6) a project involving the temporary relocation of pediatric-orthopedic hospital beds to

an existing licensed hospital that will allow for the reconstruction of a new philanthropic,

pediatric-orthopedic hospital on an existing site and that will not result in a net increase in

the number of hospital beds. Upon completion of the reconstruction, the licenses of both

hospitals must be reinstated at the capacity that existed on each site before the relocation;

(7) the relocation or redistribution of hospital beds within a hospital building or

identifiable complex of buildings provided the relocation or redistribution does not result

in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds from

one physical site or complex to another; or (iii) redistribution of hospital beds within the

state or a region of the state;

(8) relocation or redistribution of hospital beds within a hospital corporate system that

involves the transfer of beds from a closed facility site or complex to an existing site or

complex provided that: (i) no more than 50 percent of the capacity of the closed facility is

transferred; (ii) the capacity of the site or complex to which the beds are transferred does

not increase by more than 50 percent; (iii) the beds are not transferred outside of a federal

health systems agency boundary in place on July 1, 1983; (iv) the relocation or redistribution

does not involve the construction of a new hospital building; and (v) the transferred beds

are used first to replace within the hospital corporate system the total number of beds

previously used in the closed facility site or complex for mental health services and substance

use disorder services. Only after the hospital corporate system has fulfilled the requirements

of this item may the remainder of the available capacity of the closed facility site or complex

be transferred for any other purpose;

(9) a construction project involving up to 35 new beds in a psychiatric hospital in Rice

County that primarily serves adolescents and that receives more than 70 percent of its

patients from outside the state of Minnesota;

(10) a project to replace a hospital or hospitals with a combined licensed capacity of

130 beds or less if: (i) the new hospital site is located within five miles of the current site;

and (ii) the total licensed capacity of the replacement hospital, either at the time of

construction of the initial building or as the result of future expansion, will not exceed 100

licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is less;

(11) the relocation of licensed hospital beds from an existing state facility operated by

the Direct Care and Treatment executive board to a new or existing facility, building, or

complex operated by the Direct Care and Treatment executive board; from one regional

treatment center site to another; or from one building or site to a new or existing building

or site on the same campus;

(12) the construction or relocation of hospital beds operated by a hospital having a

statutory obligation to provide hospital and medical services for the indigent that does not

result in a net increase in the number of hospital beds, notwithstanding section
144.552
, 27

beds, of which 12 serve mental health needs, may be transferred from Hennepin County

Medical Center to Regions Hospital under this clause;

(13) a construction project involving the addition of up to 31 new beds in an existing

nonfederal hospital in Beltrami County;

(14) a construction project involving the addition of up to eight new beds in an existing

nonfederal hospital in Otter Tail County with 100 licensed acute care beds;

(15) a construction project involving the addition of 20 new hospital beds in an existing

hospital in Carver County serving the southwest suburban metropolitan area;

(16) a project for the construction or relocation of up to 20 hospital beds for the operation

of up to two psychiatric facilities or units for children provided that the operation of the

facilities or units have received the approval of the commissioner of human services;

(17) a project involving the addition of 14 new hospital beds to be used for rehabilitation

services in an existing hospital in Itasca County;

(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin County

that closed 20 rehabilitation beds in 2002, provided that the beds are used only for

rehabilitation in the hospital's current rehabilitation building. If the beds are used for another

purpose or moved to another location, the hospital's licensed capacity is reduced by 20 beds;

(19) a critical access hospital established under section
144.1483
, clause (9), and section

1820 of the federal Social Security Act, United States Code, title 42, section 1395i-4, that

delicensed beds since enactment of the Balanced Budget Act of 1997, Public Law 105-33,

to the extent that the critical access hospital does not seek to exceed the maximum number

of beds permitted such hospital under federal law;

(20) notwithstanding section
144.552
, a project for the construction of a new hospital

in the city of Maple Grove with a licensed capacity of up to 300 beds provided that:

(i) the project, including each hospital or health system that will own or control the entity

that will hold the new hospital license, is approved by a resolution of the Maple Grove City

Council as of March 1, 2006;

(ii) the entity that will hold the new hospital license will be owned or controlled by one

or more not-for-profit hospitals or health systems that have previously submitted a plan or

plans for a project in Maple Grove as required under section
144.552
, and the plan or plans

have been found to be in the public interest by the commissioner of health as of April 1,

2005;

(iii) the new hospital's initial inpatient services must include, but are not limited to,

medical and surgical services, obstetrical and gynecological services, intensive care services,

orthopedic services, pediatric services, noninvasive cardiac diagnostics, behavioral health

services, and emergency room services;

(iv) the new hospital:

(A) will have the ability to provide and staff sufficient new beds to meet the growing

needs of the Maple Grove service area and the surrounding communities currently being

served by the hospital or health system that will own or control the entity that will hold the

new hospital license;

(B) will provide uncompensated care;

(C) will provide mental health services, including inpatient beds;

(D) will be a site for workforce development for a broad spectrum of health-care-related

occupations and have a commitment to providing clinical training programs for physicians

and other health care providers;

(E) will demonstrate a commitment to quality care and patient safety;

(F) will have an electronic medical records system, including physician order entry;

(G) will provide a broad range of senior services;

(H) will provide emergency medical services that will coordinate care with regional

providers of trauma services and licensed emergency ambulance services in order to enhance

the continuity of care for emergency medical patients; and

(I) will be completed by December 31, 2009, unless delayed by circumstances beyond

the control of the entity holding the new hospital license; and

(v) as of 30 days following submission of a written plan, the commissioner of health

has not determined that the hospitals or health systems that will own or control the entity

that will hold the new hospital license are unable to meet the criteria of this clause;

(21) a project approved under section
144.553
;

(22) a project for the construction of a hospital with up to 25 beds in Cass County within

a 20-mile radius of the state Ah-Gwah-Ching facility, provided the hospital's license holder

is approved by the Cass County Board;

(23) a project for an acute care hospital in Fergus Falls that will increase the bed capacity

from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 and closing

a separately licensed 13-bed skilled nursing facility;

(24) notwithstanding section
144.552
, a project for the construction and expansion of a

specialty psychiatric hospital in Hennepin County for up to 50 beds, exclusively for patients

who are under 21 years of age on the date of admission. The commissioner conducted a

public interest review of the mental health needs of Minnesota and the Twin Cities

metropolitan area in 2008. No further public interest review shall be conducted for the

construction or expansion project under this clause;

(25) a project for a 16-bed psychiatric hospital in the city of Thief River Falls, if the

commissioner finds the project is in the public interest after the public interest review

conducted under section
144.552
is complete;

(26)(i) a project for a 20-bed psychiatric hospital, within an existing facility in the city

of Maple Grove, exclusively for patients who are under 21 years of age on the date of

admission, if the commissioner finds the project is in the public interest after the public

interest review conducted under section
144.552
is complete;

(ii) this project shall serve patients in the continuing care benefit program under section

256.9693
. The project may also serve patients not in the continuing care benefit program;

and

(iii) if the project ceases to participate in the continuing care benefit program, the

commissioner must complete a subsequent public interest review under section
144.552
. If

the project is found not to be in the public interest, the license must be terminated six months

from the date of that finding. If the commissioner of human services terminates the contract

without cause or reduces per diem payment rates for patients under the continuing care

benefit program below the rates in effect for services provided on December 31, 2015, the

project may cease to participate in the continuing care benefit program and continue to

operate without a subsequent public interest review;

(27) a project involving the addition of 21 new beds in an existing psychiatric hospital

in Hennepin County that is exclusively for patients who are under 21 years of age on the

date of admission;

(28) a project to add 55 licensed beds in an existing safety net, level I trauma center

hospital in Ramsey County as
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designated
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regulated
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under section
383A.91, subdivision 5
,

of which 15 beds are to be used for inpatient mental health and 40 are to be used for other

services. In addition, five unlicensed observation mental health beds shall be added;

(29) upon submission of a plan to the commissioner for public interest review under

section
144.552
and the addition of the 15 inpatient mental health beds specified in clause

(28), to its bed capacity, a project to add 45 licensed beds in an existing safety net, level I

trauma center hospital in Ramsey County as
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designated
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regulated
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under section
383A.91,

subdivision
5. Five of the 45 additional beds authorized under this clause must be designated

for use for inpatient mental health and must be added to the hospital's bed capacity before

the remaining 40 beds are added. Notwithstanding section
144.552
, the hospital may add

licensed beds under this clause prior to completion of the public interest review, provided

the hospital submits its plan by the 2021 deadline and adheres to the timelines for the public

interest review described in section
144.552
;

(30) upon submission of a plan to the commissioner for public interest review under

section
144.552
, a project to add up to 30 licensed beds in an existing psychiatric hospital

in Hennepin County that exclusively provides care to patients who are under 21 years of

age on the date of admission. Notwithstanding section
144.552
, the psychiatric hospital

may add licensed beds under this clause prior to completion of the public interest review,

provided the hospital submits its plan by the 2021 deadline and adheres to the timelines for

the public interest review described in section
144.552
;

(31) any project to add licensed beds in a hospital located in Cook County or Mahnomen

County that: (i) is designated as a critical access hospital under section
144.1483
, clause

(9), and United States Code, title 42, section 1395i-4; (ii) has a licensed bed capacity of

fewer than 25 beds; and (iii) has an attached nursing home, so long as the total number of

licensed beds in the hospital after the bed addition does not exceed 25 beds. Notwithstanding

section
144.552
, a public interest review is not required for a project authorized under this

clause;

(32) upon submission of a plan to the commissioner for public interest review under

section
144.552
, a project to add 22 licensed beds at a Minnesota freestanding children's

hospital in St. Paul that is part of an independent pediatric health system with freestanding

inpatient hospitals located in Minneapolis and St. Paul. The beds shall be utilized for pediatric

inpatient behavioral health services. Notwithstanding section
144.552
, the hospital may add

licensed beds under this clause prior to completion of the public interest review, provided

the hospital submits its plan by the 2022 deadline and adheres to the timelines for the public

interest review described in section
144.552
;

(33) a project for a 144-bed psychiatric hospital on the site of the former Bethesda

hospital in the city of Saint Paul, Ramsey County, if the commissioner finds the project is

in the public interest after the public interest review conducted under section
144.552
is

complete. Following the completion of the construction project, the commissioner of health

shall monitor the hospital, including by assessing the hospital's case mix and payer mix,

patient transfers, and patient diversions. The hospital must have an intake and assessment

area. The hospital must accommodate patients with acute mental health needs, whether they

walk up to the facility, are delivered by ambulances or law enforcement, or are transferred

from other facilities. The hospital must comply with subdivision 1a, paragraph (b). The

hospital must annually submit de-identified data to the department in the format and manner

defined by the commissioner;
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or
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(34) a project involving the relocation of up to 26 licensed long-term acute care hospital

beds from an existing long-term care hospital located in Hennepin County with a licensed

capacity prior to the relocation of 92 beds to dedicated space on the campus of an existing

safety net, level I trauma center hospital in Ramsey County as
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designated
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new text begin
regulated
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under

section
383A.91, subdivision 5
, provided both the commissioner finds the project is in the

public interest after the public interest review conducted under section
144.552
is complete

and the relocated beds continue to be used as long-term acute care hospital beds after the

relocation
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.
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; or
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(35) a project to add 85 licensed beds in an existing safety net, level I trauma center

hospital in Ramsey County as regulated under section 383A.91, subdivision 5.

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