Dialysis/certificate of need

AN ACT Relating to exempting dialysis services provided to 1
residents of a skilled nursing facility within the facility from 2
certificate of need requirements; and reenacting and amending RCW 3
70.38.111. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 70.38.111 and 2024 c 259 s 5, 2024 c 165 s 1, and 6
2024 c 121 s 23 are each reenacted and amended to read as follows:7
(1) The department shall not require a certificate of need for 8
the offering of an inpatient tertiary health service by:9
(a) A health maintenance organization or a combination of health 10
maintenance organizations if (i) the organization or combination of 11
organizations has, in the service area of the organization or the 12
service areas of the organizations in the combination, an enrollment 13
of at least 50,000 individuals, (ii) the facility in which the 14
service will be provided is or will be geographically located so that 15
the service will be reasonably accessible to such enrolled 16
individuals, and (iii) at least 75 percent of the patients who can 17
reasonably be expected to receive the tertiary health service will be 18
individuals enrolled with such organization or organizations in the 19
combination; 20
S-0691.1
SENATE BILL 5448
State of Washington 69th Legislature 2025 Regular Session
By Senators Cleveland, Muzzall, and Shewmake
Read first time 01/23/25. Referred to Committee on Health & Long-
Term Care.
p. 1 SB 5448
(b) A health care facility if (i) the facility primarily provides 1
or will provide inpatient health services, (ii) the facility is or 2
will be controlled, directly or indirectly, by a health maintenance 3
organization or a combination of health maintenance organizations 4
which has, in the service area of the organization or service areas 5
of the organizations in the combination, an enrollment of at least 6
50,000 individuals, (iii) the facility is or will be geographically 7
located so that the service will be reasonably accessible to such 8
enrolled individuals, and (iv) at least 75 percent of the patients 9
who can reasonably be expected to receive the tertiary health service 10
will be individuals enrolled with such organization or organizations 11
in the combination; or 12
(c) A health care facility (or portion thereof) if (i) the 13
facility is or will be leased by a health maintenance organization or 14
combination of health maintenance organizations which has, in the 15
service area of the organization or the service areas of the 16
organizations in the combination, an enrollment of at least 50,000 17
individuals and, on the date the application is submitted under 18
subsection (2) of this section, at least 15 years remain in the term 19
of the lease, (ii) the facility is or will be geographically located 20
so that the service will be reasonably accessible to such enrolled 21
individuals, and (iii) at least 75 percent of the patients who can 22
reasonably be expected to receive the tertiary health service will be 23
individuals enrolled with such organization; 24
if, with respect to such offering or obligation by a nursing home, 25
the department has, upon application under subsection (2) of this 26
section, granted an exemption from such requirement to the 27
organization, combination of organizations, or facility.28
(2) A health maintenance organization, combination of health 29
maintenance organizations, or health care facility shall not be 30
exempt under subsection (1) of this section from obtaining a 31
certificate of need before offering a tertiary health service unless:32
(a) It has submitted at least 30 days prior to the offering of 33
services reviewable under RCW 70.38.105(4)(d) an application for such 34
exemption; and 35
(b) The application contains such information respecting the 36
organization, combination, or facility and the proposed offering or 37
obligation by a nursing home as the department may require to 38
determine if the organization or combination meets the requirements 39
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of subsection (1) of this section or the facility meets or will meet 1
such requirements; and 2
(c) The department approves such application. The department 3
shall approve or disapprove an application for exemption within 30 4
days of receipt of a completed application. In the case of a proposed 5
health care facility (or portion thereof) which has not begun to 6
provide tertiary health services on the date an application is 7
submitted under this subsection with respect to such facility (or 8
portion), the facility (or portion) shall meet the applicable 9
requirements of subsection (1) of this section when the facility 10
first provides such services. The department shall approve an 11
application submitted under this subsection if it determines that the 12
applicable requirements of subsection (1) of this section are met.13
(3) A health care facility (or any part thereof) with respect to 14
which an exemption was granted under subsection (1) of this section 15
may not be sold or leased and a controlling interest in such facility 16
or in a lease of such facility may not be acquired and a health care 17
facility described in subsection (1)(c) of this section which was 18
granted an exemption under subsection (1) of this section may not be 19
used by any person other than the lessee described in subsection 20
(1)(c) of this section unless: 21
(a) The department issues a certificate of need approving the 22
sale, lease, acquisition, or use; or 23
(b) The department determines, upon application, that (i) the 24
entity to which the facility is proposed to be sold or leased, which 25
intends to acquire the controlling interest, or which intends to use 26
the facility is a health maintenance organization or a combination of 27
health maintenance organizations which meets the requirements of 28
subsection (1)(a)(i) of this section, and (ii) with respect to such 29
facility, meets the requirements of subsection (1)(a)(ii) or (iii) of 30
this section or the requirements of subsection (1)(b)(i) and (ii) of 31
this section. 32
(4) In the case of a health maintenance organization, an 33
ambulatory care facility, or a health care facility, which ambulatory 34
or health care facility is controlled, directly or indirectly, by a 35
health maintenance organization or a combination of health 36
maintenance organizations, the department may under the program apply 37
its certificate of need requirements to the offering of inpatient 38
tertiary health services to the extent that such offering is not 39
exempt under the provisions of this section or RCW 70.38.105(7).40
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(5)(a) The department shall not require a certificate of need for 1
the construction, development, or other establishment of a nursing 2
home, or the addition of beds to an existing nursing home, that is 3
owned and operated by a continuing care retirement community that:4
(i) Offers services only to contractual members;5
(ii) Provides its members a contractually guaranteed range of 6
services from independent living through skilled nursing, including 7
some assistance with daily living activities; 8
(iii) Contractually assumes responsibility for the cost of 9
services exceeding the member's financial responsibility under the 10
contract, so that no third party, with the exception of insurance 11
purchased by the retirement community or its members, but including 12
the medicaid program, is liable for costs of care even if the member 13
depletes his or her personal resources; 14
(iv) Has offered continuing care contracts and operated a nursing 15
home continuously since January 1, 1988, or has obtained a 16
certificate of need to establish a nursing home; 17
(v) Maintains a binding agreement with the state assuring that 18
financial liability for services to members, including nursing home 19
services, will not fall upon the state; 20
(vi) Does not operate, and has not undertaken a project that 21
would result in a number of nursing home beds in excess of one for 22
every four living units operated by the continuing care retirement 23
community, exclusive of nursing home beds; and 24
(vii) Has obtained a professional review of pricing and long-term 25
solvency within the prior five years which was fully disclosed to 26
members. 27
(b) A continuing care retirement community shall not be exempt 28
under this subsection from obtaining a certificate of need unless:29
(i) It has submitted an application for exemption at least 30 30
days prior to commencing construction of, is submitting an 31
application for the licensure of, or is commencing operation of a 32
nursing home, whichever comes first; and 33
(ii) The application documents to the department that the 34
continuing care retirement community qualifies for exemption.35
(c) The sale, lease, acquisition, or use of part or all of a 36
continuing care retirement community nursing home that qualifies for 37
exemption under this subsection shall require prior certificate of 38
need approval to qualify for licensure as a nursing home unless the 39
department determines such sale, lease, acquisition, or use is by a 40
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continuing care retirement community that meets the conditions of (a) 1
of this subsection. 2
(6) A rural hospital, as defined by the department, reducing the 3
number of licensed beds to become a rural primary care hospital under 4
the provisions of Part A Title XVIII of the Social Security Act 5
Section 1820, 42 U.S.C., 1395c et seq. may, within three years of the 6
reduction of beds licensed under chapter 70.41 RCW, increase the 7
number of licensed beds to no more than the previously licensed 8
number without being subject to the provisions of this chapter.9
(7) A rural health care facility licensed under RCW 70.175.100 10
formerly licensed as a hospital under chapter 70.41 RCW may, within 11
three years of the effective date of the rural health care facility 12
license, apply to the department for a hospital license and not be 13
subject to the requirements of RCW 70.38.105(4)(a) as the 14
construction, development, or other establishment of a new hospital, 15
provided there is no increase in the number of beds previously 16
licensed under chapter 70.41 RCW and there is no redistribution in 17
the number of beds used for acute care or long-term care, the rural 18
health care facility has been in continuous operation, and the rural 19
health care facility has not been purchased or leased.20
(8) A rural hospital determined to no longer meet critical access 21
hospital status for state law purposes as a result of participation 22
in the Washington rural health access preservation pilot identified 23
by the state office of rural health and formerly licensed as a 24
hospital under chapter 70.41 RCW may apply to the department to renew 25
its hospital license and not be subject to the requirements of RCW 26
70.38.105(4)(a) as the construction, development, or other 27
establishment of a new hospital, provided there is no increase in the 28
number of beds previously licensed under chapter 70.41 RCW. If all or 29
part of a formerly licensed rural hospital is sold, purchased, or 30
leased during the period the rural hospital does not meet critical 31
access hospital status as a result of participation in the Washington 32
rural health access preservation pilot and the new owner or lessor 33
applies to renew the rural hospital's license, then the sale, 34
purchase, or lease of part or all of the rural hospital is subject to 35
the provisions of this chapter. 36
(9)(a) A nursing home that voluntarily reduces the number of its 37
licensed beds to provide assisted living, licensed assisted living 38
facility care, adult day care, adult day health, respite care, 39
hospice, outpatient therapy services, congregate meals, home health, 40
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or senior wellness clinic, or to reduce to one or two the number of 1
beds per room or to otherwise enhance the quality of life for 2
residents in the nursing home, may convert the original facility or 3
portion of the facility back, and thereby increase the number of 4
nursing home beds to no more than the previously licensed number of 5
nursing home beds without obtaining a certificate of need under this 6
chapter, provided the facility has been in continuous operation and 7
has not been purchased or leased. Any conversion to the original 8
licensed bed capacity, or to any portion thereof, shall comply with 9
the same life and safety code requirements as existed at the time the 10
nursing home voluntarily reduced its licensed beds; unless waivers 11
from such requirements were issued, in which case the converted beds 12
shall reflect the conditions or standards that then existed pursuant 13
to the approved waivers. 14
(b) To convert beds back to nursing home beds under this 15
subsection, the nursing home must: 16
(i) Give notice of its intent to preserve conversion options to 17
the department of health no later than 30 days after the effective 18
date of the license reduction; and 19
(ii) Give notice to the department of health and to the 20
department of social and health services of the intent to convert 21
beds back. If construction is required for the conversion of beds 22
back, the notice of intent to convert beds back must be given, at a 23
minimum, one year prior to the effective date of license modification 24
reflecting the restored beds; otherwise, the notice must be given a 25
minimum of 90 days prior to the effective date of license 26
modification reflecting the restored beds. Prior to any license 27
modification to convert beds back to nursing home beds under this 28
section, the licensee must demonstrate that the nursing home meets 29
the certificate of need exemption requirements of this section.30
The term "construction," as used in (b)(ii) of this subsection, 31
is limited to those projects that are expected to equal or exceed the 32
expenditure minimum amount, as determined under this chapter.33
(c) Conversion of beds back under this subsection must be 34
completed no later than four years after the effective date of the 35
license reduction. However, for good cause shown, the four-year 36
period for conversion may be extended by the department of health for 37
one additional four-year period. 38
(d) Nursing home beds that have been voluntarily reduced under 39
this section shall be counted as available nursing home beds for the 40
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purpose of evaluating need under RCW 70.38.115(2) (a) and (k) so long 1
as the facility retains the ability to convert them back to nursing 2
home use under the terms of this section. 3
(e) When a building owner has secured an interest in the nursing 4
home beds, which are intended to be voluntarily reduced by the 5
licensee under (a) of this subsection, the applicant shall provide 6
the department with a written statement indicating the building 7
owner's approval of the bed reduction. 8
(10)(a) The department shall not require a certificate of need 9
for a hospice agency if: 10
(i) The hospice agency is designed to serve the unique religious 11
or cultural needs of a religious group or an ethnic minority and 12
commits to furnishing hospice services in a manner specifically aimed 13
at meeting the unique religious or cultural needs of the religious 14
group or ethnic minority; 15
(ii) The hospice agency is operated by an organization that:16
(A) Operates a facility, or group of facilities, that offers a 17
comprehensive continuum of long-term care services, including, at a 18
minimum, a licensed, medicare-certified nursing home, assisted 19
living, independent living, day health, and various community-based 20
support services, designed to meet the unique social, cultural, and 21
religious needs of a specific cultural and ethnic minority group;22
(B) Has operated the facility or group of facilities for at least 23
10 continuous years prior to the establishment of the hospice agency;24
(iii) The hospice agency commits to coordinating with existing 25
hospice programs in its community when appropriate;26
(iv) The hospice agency has a census of no more than 40 patients;27
(v) The hospice agency commits to obtaining and maintaining 28
medicare certification; 29
(vi) The hospice agency only serves patients located in the same 30
county as the majority of the long-term care services offered by the 31
organization that operates the agency; and 32
(vii) The hospice agency is not sold or transferred to another 33
agency. 34
(b) The department shall include the patient census for an agency 35
exempted under this subsection (10) in its calculations for future 36
certificate of need applications. 37
(11) To alleviate the need to board psychiatric patients in 38
emergency departments and increase capacity of hospitals to serve 39
p. 7 SB 5448
individuals on 90-day or 180-day commitment orders, for the period of 1
time from May 5, 2017, through June 30, 2028: 2
(a) The department shall suspend the certificate of need 3
requirement for a hospital licensed under chapter 70.41 RCW that 4
changes the use of licensed beds to increase the number of beds to 5
provide psychiatric services, including involuntary treatment 6
services. A certificate of need exemption under this subsection 7
(11)(a) shall be valid for two years. 8
(b) The department may not require a certificate of need for:9
(i) The addition of beds as described in RCW 70.38.260 (2) and 10
(3); or 11
(ii) The construction, development, or establishment of a 12
behavioral health hospital licensed as an establishment under chapter 13
71.12 RCW that will have no more than 16 beds and provide treatment 14
to adults on 90 or 180-day involuntary commitment orders, as 15
described in RCW 70.38.260(4). 16
(12)(a) An ambulatory surgical facility is exempt from all 17
certificate of need requirements if the facility: 18
(i) Is an individual or group practice and, if the facility is a 19
group practice, the privilege of using the facility is not extended 20
to physicians outside the group practice; 21
(ii) Operated or received approval to operate, prior to January 22
19, 2018; and 23
(iii) Was exempt from certificate of need requirements prior to 24
January 19, 2018, because the facility either: 25
(A) Was determined to be exempt from certificate of need 26
requirements pursuant to a determination of reviewability issued by 27
the department; or 28
(B) Was a single-specialty endoscopy center in existence prior to 29
January 14, 2003, when the department determined that endoscopy 30
procedures were surgeries for purposes of certificate of need.31
(b) The exemption under this subsection: 32
(i) Applies regardless of future changes of ownership, corporate 33
structure, or affiliations of the individual or group practice as 34
long as the use of the facility remains limited to physicians in the 35
group practice; and 36
(ii) Does not apply to changes in services, specialties, or 37
number of operating rooms. 38
(13) A rural health clinic providing health services in a home 39
health shortage area as declared by the department pursuant to 42 40
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C.F.R. Sec. 405.2416 is not subject to certificate of need review 1
under this chapter. 2
(14) Hospital at-home services, as defined in RCW 70.41.550, are 3
not subject to certificate of need review under this chapter.4
(15) Dialysis services provided on-site to residents of a skilled 5
nursing facility are considered home hemodialysis pursuant to the 6
centers for medicare and medicaid services conditions for coverage 7
and associated guidance and the department shall not require a 8
certificate of need for these services.9
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