CON; remove end-stage renal disease facilities from application of law.

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To: Public Health and Human
Services
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Clark

HOUSE BILL NO. 5

AN ACT TO AMEND SECTION 41-7-173, MISSISSIPPI CODE OF 1972, 1
TO REMOVE END-STAGE RENAL DISEASE FACILITIES FROM THE APPLICATION 2
OF THE HEALTH CARE CERTIFICATE OF NEED LAW; AND FOR RELATED 3
PURPOSES. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 5
SECTION 1. Section 41-7-173, Mississippi Code of 1972, is 6
amended as follows: 7
41-7-173. For the purposes of Section 41-7-171 et seq., the 8
following words shall have the meanings ascribed herein, unless 9
the context otherwise requires: 10
(a) "Affected person" means (i) the applicant; (ii) a 11
person residing within the geographic area to be served by the 12
applicant's proposal; (iii) a person who regularly uses health 13
care facilities or HMOs located in the geographic area of the 14
proposal which provide similar service to that which is proposed; 15
(iv) health care facilities and HMOs which have, prior to receipt 16
of the application under review, formally indicated an intention 17
to provide service similar to that of the proposal being 18
considered at a future date; (v) third-party payers who reimburse 19
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health care facilities located in the geographical area of the 20
proposal; or (vi) any agency that establishes rates for health 21
care services or HMOs located in the geographic area of the 22
proposal. 23
(b) "Certificate of need" means a written order of the 24
State Department of Health setting forth the affirmative finding 25
that a proposal in prescribed application form, sufficiently 26
satisfies the plans, standards and criteria prescribed for such 27
service or other project by Section 41-7-171 et seq., and by rules 28
and regulations promulgated thereunder by the State Department of 29
Health. 30
(c) (i) "Capital expenditure," when pertaining to 31
defined major medical equipment, shall mean an expenditure which, 32
under generally accepted accounting principles consistently 33
applied, is not properly chargeable as an expense of operation and 34
maintenance and which exceeds One Million Five Hundred Thousand 35
Dollars ($1,500,000.00). 36
(ii) "Capital expenditure," when pertaining to 37
other than major medical equipment, shall mean any expenditure 38
which under generally accepted accounting principles consistently 39
applied is not properly chargeable as an expense of operation and 40
maintenance and which exceeds, for clinical health services, as 41
defined in paragraph (k) below, Five Million Dollars 42
($5,000,000.00), adjusted for inflation as published by the State 43
Department of Health or which exceeds, for nonclinical health 44
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services, as defined in paragraph (k) below, Ten Million Dollars 45
($10,000,000.00), adjusted for inflation as published by the State 46
Department of Health. 47
(iii) A "capital expenditure" shall include the 48
acquisition, whether by lease, sufferance, gift, devise, legacy, 49
settlement of a trust or other means, of any facility or part 50
thereof, or equipment for a facility, the expenditure for which 51
would have been considered a capital expenditure if acquired by 52
purchase. Transactions which are separated in time but are 53
planned to be undertaken within twelve (12) months of each other 54
and are components of an overall plan for meeting patient care 55
objectives shall, for purposes of this definition, be viewed in 56
their entirety without regard to their timing. 57
(iv) In those instances where a health care 58
facility or other provider of health services proposes to provide 59
a service in which the capital expenditure for major medical 60
equipment or other than major medical equipment or a combination 61
of the two (2) may have been split between separate parties, the 62
total capital expenditure required to provide the proposed service 63
shall be considered in determining the necessity of certificate of 64
need review and in determining the appropriate certificate of need 65
review fee to be paid. The capital expenditure associated with 66
facilities and equipment to provide services in Mississippi shall 67
be considered regardless of where the capital expenditure was 68
made, in state or out of state, and regardless of the domicile of 69
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the party making the capital expenditure, in state or out of 70
state. 71
(d) "Change of ownership" includes, but is not limited 72
to, inter vivos gifts, purchases, transfers, lease arrangements, 73
cash and/or stock transactions or other comparable arrangements 74
whenever any person or entity acquires or controls a majority 75
interest of an existing health care facility, and/or the change of 76
ownership of major medical equipment, a health service, or an 77
institutional health service. Changes of ownership from 78
partnerships, single proprietorships or corporations to another 79
form of ownership are specifically included. However, "change of 80
ownership" shall not include any inherited interest acquired as a 81
result of a testamentary instrument or under the laws of descent 82
and distribution of the State of Mississippi. 83
(e) "Commencement of construction" means that all of 84
the following have been completed with respect to a proposal or 85
project proposing construction, renovating, remodeling or 86
alteration: 87
(i) A legally binding written contract has been 88
consummated by the proponent and a lawfully licensed contractor to 89
construct and/or complete the intent of the proposal within a 90
specified period of time in accordance with final architectural 91
plans which have been approved by the licensing authority of the 92
State Department of Health; 93
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(ii) Any and all permits and/or approvals deemed 94
lawfully necessary by all authorities with responsibility for such 95
have been secured; and 96
(iii) Actual bona fide undertaking of the subject 97
proposal has commenced, and a progress payment of at least one 98
percent (1%) of the total cost price of the contract has been paid 99
to the contractor by the proponent, and the requirements of this 100
paragraph (e) have been certified to in writing by the State 101
Department of Health. 102
Force account expenditures, such as deposits, securities, 103
bonds, et cetera, may, in the discretion of the State Department 104
of Health, be excluded from any or all of the provisions of 105
defined commencement of construction. 106
(f) "Consumer" means an individual who is not a 107
provider of health care as defined in paragraph (q) of this 108
section. 109
(g) "Develop," when used in connection with health 110
services, means to undertake those activities which, on their 111
completion, will result in the offering of a new institutional 112
health service or the incurring of a financial obligation as 113
defined under applicable state law in relation to the offering of 114
such services. 115
(h) "Health care facility" includes hospitals, 116
psychiatric hospitals, chemical dependency hospitals, skilled 117
nursing facilities, end-stage renal disease (ESRD) facilities, 118
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including freestanding hemodialysis units, intermediate care 119
facilities, ambulatory surgical facilities, intermediate care 120
facilities for individuals with intellectual disabilities, home 121
health agencies, psychiatric residential treatment facilities, 122
pediatric skilled nursing facilities, long-term care hospitals, 123
comprehensive medical rehabilitation facilities, including 124
facilities owned or operated by the state or a political 125
subdivision or instrumentality of the state, but does not include 126
Christian Science sanatoriums operated or listed and certified by 127
the First Church of Christ, Scientist, Boston, Massachusetts. 128
This definition shall not apply to facilities for the private 129
practice, either independently or by incorporated medical groups, 130
of physicians, dentists or health care professionals except where 131
such facilities are an integral part of an institutional health 132
service. The various health care facilities listed in this 133
paragraph shall be defined as follows: 134
(i) "Hospital" means an institution which is 135
primarily engaged in providing to inpatients, by or under the 136
supervision of physicians, diagnostic services and therapeutic 137
services for medical diagnosis, treatment and care of injured, 138
disabled or sick persons, or rehabilitation services for the 139
rehabilitation of injured, disabled or sick persons. Such term 140
does not include psychiatric hospitals. 141
(ii) "Psychiatric hospital" means an institution 142
which is primarily engaged in providing to inpatients, by or under 143
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the supervision of a physician, psychiatric services for the 144
diagnosis and treatment of persons with mental illness. 145
(iii) "Chemical dependency hospital" means an 146
institution which is primarily engaged in providing to inpatients, 147
by or under the supervision of a physician, medical and related 148
services for the diagnosis and treatment of chemical dependency 149
such as alcohol and drug abuse. 150
(iv) "Skilled nursing facility" means an 151
institution or a distinct part of an institution which is 152
primarily engaged in providing to inpatients skilled nursing care 153
and related services for patients who require medical or nursing 154
care or rehabilitation services for the rehabilitation of injured, 155
disabled or sick persons. 156
(v) * * *[Deleted] 157
(vi) "Intermediate care facility" means an 158
institution which provides, on a regular basis, health-related 159
care and services to individuals who do not require the degree of 160
care and treatment which a hospital or skilled nursing facility is 161
designed to provide, but who, because of their mental or physical 162
condition, require health-related care and services (above the 163
level of room and board). 164
(vii) "Ambulatory surgical facility" means a 165
facility primarily organized or established for the purpose of 166
performing surgery for outpatients and is a separate identifiable 167
legal entity from any other health care facility. Such term does 168
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not include the offices of private physicians or dentists, whether 169
for individual or group practice, and does not include any 170
abortion facility as defined in Section 41-75-1(f). 171
(viii) "Intermediate care facility for individuals 172
with intellectual disabilities" means an intermediate care 173
facility that provides health or rehabilitative services in a 174
planned program of activities to persons with an intellectual 175
disability, also including, but not limited to, cerebral palsy and 176
other conditions covered by the Federal Developmentally Disabled 177
Assistance and Bill of Rights Act, Public Law 94-103. 178
(ix) "Home health agency" means a public or 179
privately owned agency or organization, or a subdivision of such 180
an agency or organization, properly authorized to conduct business 181
in Mississippi, which is primarily engaged in providing to 182
individuals at the written direction of a licensed physician, in 183
the individual's place of residence, skilled nursing services 184
provided by or under the supervision of a registered nurse 185
licensed to practice in Mississippi, and one or more of the 186
following services or items: 187
1. Physical, occupational or speech therapy; 188
2. Medical social services; 189
3. Part-time or intermittent services of a 190
home health aide; 191
4. Other services as approved by the 192
licensing agency for home health agencies; 193
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5. Medical supplies, other than drugs and 194
biologicals, and the use of medical appliances; or 195
6. Medical services provided by an intern or 196
resident-in-training at a hospital under a teaching program of 197
such hospital. 198
Further, all skilled nursing services and those services 199
listed in items 1 through 4 of this subparagraph (ix) must be 200
provided directly by the licensed home health agency. For 201
purposes of this subparagraph, "directly" means either through an 202
agency employee or by an arrangement with another individual not 203
defined as a health care facility. 204
This subparagraph (ix) shall not apply to health care 205
facilities which had contracts for the above services with a home 206
health agency on January 1, 1990. 207
(x) "Psychiatric residential treatment facility" 208
means any nonhospital establishment with permanent licensed 209
facilities which provides a twenty-four-hour program of care by 210
qualified therapists, including, but not limited to, duly licensed 211
mental health professionals, psychiatrists, psychologists, 212
psychotherapists and licensed certified social workers, for 213
emotionally disturbed children and adolescents referred to such 214
facility by a court, local school district or by the Department of 215
Human Services, who are not in an acute phase of illness requiring 216
the services of a psychiatric hospital, and are in need of such 217
restorative treatment services. For purposes of this 218
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subparagraph, the term "emotionally disturbed" means a condition 219
exhibiting one or more of the following characteristics over a 220
long period of time and to a marked degree, which adversely 221
affects educational performance: 222
1. An inability to learn which cannot be 223
explained by intellectual, sensory or health factors; 224
2. An inability to build or maintain 225
satisfactory relationships with peers and teachers; 226
3. Inappropriate types of behavior or 227
feelings under normal circumstances; 228
4. A general pervasive mood of unhappiness or 229
depression; or 230
5. A tendency to develop physical symptoms or 231
fears associated with personal or school problems. An 232
establishment furnishing primarily domiciliary care is not within 233
this definition. 234
(xi) "Pediatric skilled nursing facility" means an 235
institution or a distinct part of an institution that is primarily 236
engaged in providing to inpatients skilled nursing care and 237
related services for persons under twenty-one (21) years of age 238
who require medical or nursing care or rehabilitation services for 239
the rehabilitation of injured, disabled or sick persons. 240
(xii) "Long-term care hospital" means a 241
freestanding, Medicare-certified hospital that has an average 242
length of inpatient stay greater than twenty-five (25) days, which 243
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is primarily engaged in providing chronic or long-term medical 244
care to patients who do not require more than three (3) hours of 245
rehabilitation or comprehensive rehabilitation per day, and has a 246
transfer agreement with an acute care medical center and a 247
comprehensive medical rehabilitation facility. Long-term care 248
hospitals shall not use rehabilitation, comprehensive medical 249
rehabilitation, medical rehabilitation, sub-acute rehabilitation, 250
nursing home, skilled nursing facility or sub-acute care facility 251
in association with its name. 252
(xiii) "Comprehensive medical rehabilitation 253
facility" means a hospital or hospital unit that is licensed 254
and/or certified as a comprehensive medical rehabilitation 255
facility which provides specialized programs that are accredited 256
by the Commission on Accreditation of Rehabilitation Facilities 257
and supervised by a physician board certified or board eligible in 258
physiatry or other doctor of medicine or osteopathy with at least 259
two (2) years of training in the medical direction of a 260
comprehensive rehabilitation program that: 261
1. Includes evaluation and treatment of 262
individuals with physical disabilities; 263
2. Emphasizes education and training of 264
individuals with disabilities; 265
3. Incorporates at least the following core 266
disciplines: 267
a. Physical Therapy; 268
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b. Occupational Therapy; 269
c. Speech and Language Therapy; 270
d. Rehabilitation Nursing; and 271
4. Incorporates at least three (3) of the 272
following disciplines: 273
a. Psychology; 274
b. Audiology; 275
c. Respiratory Therapy; 276
d. Therapeutic Recreation; 277
e. Orthotics; 278
f. Prosthetics; 279
g. Special Education; 280
h. Vocational Rehabilitation; 281
i. Psychotherapy; 282
j. Social Work; 283
k. Rehabilitation Engineering. 284
These specialized programs include, but are not limited to: 285
spinal cord injury programs, head injury programs and infant and 286
early childhood development programs. 287
(i) "Health maintenance organization" or "HMO" means a 288
public or private organization organized under the laws of this 289
state or the federal government which: 290
(i) Provides or otherwise makes available to 291
enrolled participants health care services, including 292
substantially the following basic health care services: usual 293
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physician services, hospitalization, laboratory, x-ray, emergency 294
and preventive services, and out-of-area coverage; 295
(ii) Is compensated (except for copayments) for 296
the provision of the basic health care services listed in 297
subparagraph (i) of this paragraph to enrolled participants on a 298
predetermined basis; and 299
(iii) Provides physician services primarily: 300
1. Directly through physicians who are either 301
employees or partners of such organization; or 302
2. Through arrangements with individual 303
physicians or one or more groups of physicians (organized on a 304
group practice or individual practice basis). 305
(j) "Health service area" means a geographic area of 306
the state designated in the State Health Plan as the area to be 307
used in planning for specified health facilities and services and 308
to be used when considering certificate of need applications to 309
provide health facilities and services. 310
(k) "Health services" means clinically related (i.e., 311
diagnostic, treatment or rehabilitative) services and includes 312
alcohol, drug abuse, mental health and home health care services. 313
"Clinical health services" shall only include those activities 314
which contemplate any change in the existing bed complement of any 315
health care facility through the addition or conversion of any 316
beds, under Section 41-7-191(1)(c) or propose to offer any health 317
services if those services have not been provided on a regular 318
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basis by the proposed provider of such services within the period 319
of twelve (12) months prior to the time such services would be 320
offered, under Section 41-7-191(1)(d). "Nonclinical health 321
services" shall be all other services which do not involve any 322
change in the existing bed complement or offering health services 323
as described above. 324
(l) "Institutional health services" shall mean health 325
services provided in or through health care facilities and shall 326
include the entities in or through which such services are 327
provided. 328
(m) "Major medical equipment" means medical equipment 329
designed for providing medical or any health-related service which 330
costs in excess of One Million Five Hundred Thousand Dollars 331
($1,500,000.00). However, this definition shall not be applicable 332
to clinical laboratories if they are determined by the State 333
Department of Health to be independent of any physician's office, 334
hospital or other health care facility or otherwise not so defined 335
by federal or state law, or rules and regulations promulgated 336
thereunder. 337
(n) "State Department of Health" or "department" shall 338
mean the state agency created under Section 41-3-15, which shall 339
be considered to be the State Health Planning and Development 340
Agency, as defined in paragraph (u) of this section. 341
(o) "Offer," when used in connection with health 342
services, means that it has been determined by the State 343
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Department of Health that the health care facility is capable of 344
providing specified health services. 345
(p) "Person" means an individual, a trust or estate, 346
partnership, corporation (including associations, joint-stock 347
companies and insurance companies), the state or a political 348
subdivision or instrumentality of the state. 349
(q) "Provider" shall mean any person who is a provider 350
or representative of a provider of health care services requiring 351
a certificate of need under Section 41-7-171 et seq., or who has 352
any financial or indirect interest in any provider of services. 353
(r) "Radiation therapy services" means the treatment of 354
cancer and other diseases using ionizing radiation of either high 355
energy photons (x-rays or gamma rays) or charged particles 356
(electrons, protons or heavy nuclei). However, for purposes of a 357
certificate of need, radiation therapy services shall not include 358
low energy, superficial, external beam x-ray treatment of 359
superficial skin lesions. 360
(s) "Secretary" means the Secretary of Health and Human 361
Services, and any officer or employee of the Department of Health 362
and Human Services to whom the authority involved has been 363
delegated. 364
(t) "State Health Plan" means the sole and official 365
statewide health plan for Mississippi which identifies priority 366
state health needs and establishes standards and criteria for 367
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ST: CON; remove end-stage renal disease
facilities from application of law.
health-related activities which require certificate of need review 368
in compliance with Section 41-7-191. 369
(u) "State Health Planning and Development Agency" 370
means the agency of state government designated to perform health 371
planning and resource development programs for the State of 372
Mississippi. 373
SECTION 2. This act shall take effect and be in force from 374
and after July 1, 2026. 375