Modifies the certificate of need process to allow only applicants to challenge proposed decisions of the Oregon Health Authority.

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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 2021
Sponsored by Representative ELMER (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced. The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act makes changes to the certificate of need process. (Flesch Readability Score:
69.7).
Modifies the certificate of need process to allow only applicants to challenge proposed decisions
of the Oregon Health Authority.
A BILL FOR AN ACT
Relating to certificates of need; amending ORS 442.015 and 442.315.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
ORS 442.315 is amended to read:
442.315. (1) Any new hospital or new skilled nursing or intermediate care service or facility not
excluded pursuant to ORS 441.065 shall obtain a certificate of need from the Oregon Health Au-
thority prior to an offering or development.
(2) The authority shall adopt rules specifying criteria and procedures for making decisions as
to the need for the new services or facilities.
(3)(a) An applicant for a certificate of need shall apply to the authority on forms provided for
this purpose by authority rule.
(b) An applicant shall pay a fee prescribed as provided in this section. Subject to the approval
of the Oregon Department of Administrative Services, the authority shall prescribe application fees,
based on the complexity and scope of the proposed project.
(4)(a) The authority shall issue a draft recommendation in response to an application for a cer-
tificate of need.
(b) The authority may establish an expedited review process for an application for a certificate
of need to rebuild a long term care facility, relocate buildings that are part of a long term care fa-
cility or relocate long term care facility bed capacity from one long term care facility to another.
The authority shall issue a draft recommendation not later than 120 days after the date a complete
application subject to expedited review is received by the authority.
(5)(a) An applicant [ or any affected person ] who is dissatisfied with the draft recommendation of
the authority is entitled to an informal hearing before the authority in the course of review and
before a proposed decision is rendered. Following an informal hearing, or if [ no applicant or affected
person requests ] the applicant does not request an informal hearing within a period of time pre-
scribed by the authority by rule, the authority shall issue a proposed decision.
(b) An applicant [ or affected person ] is entitled to a contested case hearing in accordance with
ORS chapter 183 to challenge the proposed decision of the authority. Following a contested case
hearing, or if [ no applicant or affected person requests ] the applicant does not request a contested
case hearing within a period of time prescribed by the authority by rule, the authority shall issue
NOTE: Matter in boldfaced type in an amended section is new; matter [ italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 698
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a final order granting, with or without limitations, or denying the certificate of need.
(6) Once a certificate of need has been granted, it may not be revoked or rescinded unless it
was acquired by fraud or deceit. However, if the authority finds that a person is offering or devel-
oping a project that is not within the scope of the certificate of need, the authority may limit the
project as specified in the granted certificate of need or reconsider the application. A certificate of
need is not transferable.
(7) Nothing in this section applies to any hospital, skilled nursing or intermediate care service
or facility that seeks to replace equipment with equipment of similar basic technological function
or an upgrade that improves the quality or cost-effectiveness of the service provided. Any person
acquiring such replacement or upgrade shall file a letter of intent for the project in accordance with
the rules of the authority if the price of the replacement equipment or upgrade exceeds $1 million.
(8) Except as required in subsection (1) of this section for a new hospital or new skilled nursing
or intermediate care service or facility not operating as a Medicare swing bed program, nothing in
this section requires a rural hospital as defined in ORS 442.470 (6)(a)(A) and (B) to obtain a certif-
icate of need.
(9) Nothing in this section applies to basic health services, but basic health services do not in-
clude:
(a) Magnetic resonance imaging scanners;
(b) Positron emission tomography scanners;
(c) Cardiac catheterization equipment;
(d) Megavoltage radiation therapy equipment;
(e) Extracorporeal shock wave lithotriptors;
(f) Neonatal intensive care;
(g) Burn care;
(h) Trauma care;
(i) Inpatient psychiatric services;
(j) Inpatient chemical dependency services;
(k) Inpatient rehabilitation services;
(L) Open heart surgery; or
(m) Organ transplant services.
(10) In addition to any other remedy provided by law, whenever it appears that any person is
engaged in, or is about to engage in, any acts that constitute a violation of this section, or any rule
or order issued by the authority under this section, the authority may institute proceedings in the
circuit courts to enforce obedience to such statute, rule or order by injunction or by other pro-
cesses, mandatory or otherwise.
(11) As used in this section, “basic health services” means health services offered in or through
a hospital licensed under ORS chapter 441, except skilled nursing or intermediate care nursing fa-
cilities or services and those services specified in subsection (9) of this section.
SECTION 2.
ORS 442.015 is amended to read:
442.015. As used in ORS chapter 441 and this chapter, unless the context requires otherwise:
(1) “Acquire” or “acquisition” means obtaining equipment, supplies, components or facilities by
any means, including purchase, capital or operating lease, rental or donation, for the purpose of
using such equipment, supplies, components or facilities to provide health services in Oregon. When
equipment or other materials are obtained outside of this state, acquisition is considered to occur
when the equipment or other materials begin to be used in Oregon for the provision of health ser-
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vices or when such services are offered for use in Oregon.
[(2) “Affected persons” has the same meaning as given to “party” in ORS 183.310. ]
[(3)(a)] (2)(a) “Ambulatory surgical center” means a facility or portion of a facility that operates
exclusively for the purpose of providing surgical services to patients who do not require
hospitalization and for whom the expected duration of services does not exceed 24 hours following
admission.
(b) “Ambulatory surgical center” does not mean:
(A) Individual or group practice offices of private physicians or dentists that do not contain a
distinct area used for outpatient surgical treatment on a regular and organized basis, or that only
provide surgery routinely provided in a physician’s or dentist’s office using local anesthesia or
conscious sedation; or
(B) A portion of a licensed hospital designated for outpatient surgical treatment.
[(4)] (3) “Delegated credentialing agreement” means a written agreement between an
originating-site hospital and a distant-site hospital that provides that the medical staff of the
originating-site hospital will rely upon the credentialing and privileging decisions of the distant-site
hospital in making recommendations to the governing body of the originating-site hospital as to
whether to credential a telemedicine provider, practicing at the distant-site hospital either as an
employee or under contract, to provide telemedicine services to patients in the originating-site hos-
pital.
[(5)] (4) “Develop” means to undertake those activities that on their completion will result in
the offer of a new institutional health service or the incurring of a financial obligation, as defined
under applicable state law, in relation to the offering of such a health service.
[(6)] (5) “Distant-site hospital” means the hospital where a telemedicine provider, at the time the
telemedicine provider is providing telemedicine services, is practicing as an employee or under
contract.
[(7)] (6) “Expenditure” or “capital expenditure” means the actual expenditure, an obligation to
an expenditure, lease or similar arrangement in lieu of an expenditure, and the reasonable value of
a donation or grant in lieu of an expenditure but not including any interest thereon.
[(8)] (7) “Extended stay center” means a facility licensed in accordance with ORS 441.026.
[(9)] (8) “Freestanding birthing center” means a facility licensed for the primary purpose of
performing low risk deliveries.
[(10)] (9) “Governmental unit” means the state, or any county, municipality or other political
subdivision, or any related department, division, board or other agency.
[(11)] (10) “Gross revenue” means the sum of daily hospital service charges, ambulatory service
charges, ancillary service charges and other operating revenue. “Gross revenue” does not include
contributions, donations, legacies or bequests made to a hospital without restriction by the donors.
[(12)(a)] (11)(a) “Health care facility” means:
(A) A hospital;
(B) A long term care facility;
(C) An ambulatory surgical center;
(D) A freestanding birthing center;
(E) An outpatient renal dialysis facility; or
(F) An extended stay center.
(b) “Health care facility” does not mean:
(A) A residential facility licensed by the Department of Human Services or the Oregon Health
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Authority under ORS 443.415;
(B) An establishment furnishing primarily domiciliary care as described in ORS 443.205;
(C) A residential facility licensed or approved under the rules of the Department of Corrections;
(D) Facilities established by ORS 430.335 for treatment of substance abuse disorders; or
(E) Community mental health programs or community developmental disabilities programs es-
tablished under ORS 430.620.
[(13)] (12) “Health maintenance organization” or “HMO” means a public organization or a pri-
vate organization organized under the laws of any state that:
(a) Is a qualified HMO under section 1310(d) of the U.S. Public Health Services Act; or
(b)(A) Provides or otherwise makes available to enrolled participants health care services, in-
cluding at least the following basic health care services:
(i) Usual physician services;
(ii) Hospitalization;
(iii) Laboratory;
(iv) X-ray;
(v) Emergency and preventive services; and
(vi) Out-of-area coverage;
(B) Is compensated, except for copayments, for the provision of the basic health care services
listed in subparagraph (A) of this paragraph to enrolled participants on a predetermined periodic
rate basis; and
(C) Provides physicians’ services primarily directly through physicians who are either employees
or partners of such organization, or through arrangements with individual physicians or one or more
groups of physicians organized on a group practice or individual practice basis.
[(14)] (13) “Health services” means clinically related diagnostic, treatment or rehabilitative
services, and includes alcohol, drug or controlled substance abuse and mental health services that
may be provided either directly or indirectly on an inpatient or ambulatory patient basis.
[(15)] (14) “Hospital” means:
(a) A facility with an organized medical staff and a permanent building that is capable of pro-
viding 24-hour inpatient care to two or more individuals who have an illness or injury and that
provides at least the following health services:
(A) Medical;
(B) Nursing;
(C) Laboratory;
(D) Pharmacy; and
(E) Dietary; or
(b) A special inpatient care facility as that term is defined by the authority by rule.
[(16)] (15) “Institutional health services” means health services provided in or through health
care facilities and the entities in or through which such services are provided.
[(17)] (16) “Intermediate care facility” means a facility that provides, on a regular basis,
health-related care and services to individuals who do not require the degree of care and treatment
that a hospital or skilled nursing facility is designed to provide, but who because of their mental
or physical condition require care and services above the level of room and board that can be made
available to them only through institutional facilities.
[(18)(a)] (17)(a) “Long term care facility” means a permanent facility with inpatient beds, pro-
viding:
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(A) Medical services, including nursing services but excluding surgical procedures except as
may be permitted by the rules of the Director of Human Services; and
(B) Treatment for two or more unrelated patients.
(b) “Long term care facility” includes skilled nursing facilities and intermediate care facilities
but does not include facilities licensed and operated pursuant to ORS 443.400 to 443.455.
[(19)] (18) “New hospital” means:
(a) A facility that did not offer hospital services on a regular basis within its service area within
the prior 12-month period and is initiating or proposing to initiate such services; or
(b) Any replacement of an existing hospital that involves a substantial increase or change in the
services offered.
[(20)] (19) “New skilled nursing or intermediate care service or facility” means a service or fa-
cility that did not offer long term care services on a regular basis by or through the facility within
the prior 12-month period and is initiating or proposing to initiate such services. “New skilled
nursing or intermediate care service or facility” also includes the rebuilding of a long term care
facility, the relocation of buildings that are a part of a long term care facility, the relocation of long
term care beds from one facility to another or an increase in the number of beds of more than 10
or 10 percent of the bed capacity, whichever is the lesser, within a two-year period.
[(21)] (20) “Offer” means that the health care facility holds itself out as capable of providing,
or as having the means for the provision of, specified health services.
[(22)] (21) “Originating-site hospital” means a hospital in which a patient is located while re-
ceiving telemedicine services.
[(23)] (22) “Outpatient renal dialysis facility” means a facility that provides renal dialysis ser-
vices directly to outpatients.
[(24)] (23) “Person” means an individual, a trust or estate, a partnership, a corporation (includ-
ing associations, joint stock companies and insurance companies), a state, or a political subdivision
or instrumentality, including a municipal corporation, of a state.
[(25)] (24) “Skilled nursing facility” means a facility or a distinct part of a facility, that is pri-
marily engaged in providing to inpatients skilled nursing care and related services for patients who
require medical or nursing care, or an institution that provides rehabilitation services for the re-
habilitation of individuals who are injured or sick or who have disabilities.
[(26)] (25) “Telemedicine” means the provision of health services to patients by physicians and
health care practitioners from a distance using electronic communications, including synchronous
technologies to facilitate an exchange of information between a patient and physician or health care
practitioner in real time or asynchronous technologies to facilitate an exchange of information be-
tween a patient and a physician or health care practitioner in other than real time.
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