Medical equipment certificate of need commission.

20LSO-0344
2020
STATE OF WYOMING
20LSO-0344
Numbered
2.0

HOUSE BILL NO. HB0199

Medical equipment certificate of need commission.

Sponsored by: Representative(s) Hallinan, Clem and Laursen

A BILL

for

AN ACT relating to public health and safety; creating the medical equipment certificate of need commission to regulate the purchase of medical equipment as specified; providing for the commission's administration; creating the hospital project loan account; granting the commission loan authority as specified; providing a continuous appropriation; imposing assessments on hospitals as specified; providing penalties; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 35
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2
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1201 through 35
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2
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1207 are created to read:

ARTICLE 12
MEDICAL EQUIPMENT CERTIFICATE OF NEED COMMISSION

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2
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1201.

Definitions.

(a)

As used in this article:

(i)

"Account" means the hospital project loan account created by W.S. 35
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2
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1204;

(ii)

"Commission" means the medical equipment certificate of need commission created under W.S. 35
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1202;

(iii)

"Department" means the Wyoming department of health;

(iv)

"Hospital" means as defined by W.S. 35
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901(a)(xiii);

(v)

"Project" means

the placement of any computed tomographic (CT) scanning or magnetic resonance imaging (MRI) equipment into a hospital, private office of a health care professional or other health care facility.

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1202.

Medical equipment certificate of need commission created; powers and duties.

(a)

There is created the medical equipment certificate of need commission within the department of health consisting of five (5) members appointed by the governor. Two (2) of the members shall be representative of employers in the state that provide health insurance for their employees. Except for the initial members, the term of office of each member of the commission shall be three (3) years. The governor may reappoint members to subsequent terms and may remove appointees as provided by W.S. 9
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1
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202. The director of the department, or his designee, shall serve as a nonvoting ex officio member of the commission. Any vacancy of a member of the commission shall
be filled by the governor for the remainder of the unexpired term of the member.

(b)

Initial commission member appointments shall be for staggered terms with two (2) members being appointed for two (2) year terms, two (2) members being appointed for three (3) year terms and the remaining member being appointed to a one (1) year term. Thereafter, appointed members shall serve three (3) year terms.

(c)

Appointed members of the commission shall receive no compensation, but shall be reimbursed under W.S. 9
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3
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102 and 9
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3
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103 for per diem and travel expenses incurred in the performance of their duties on the commission.

(d)

The commission shall select a chairman and such other officers as it deems necessary and shall keep a record of its proceedings. The commission shall meet not less than one (1) time per year but shall otherwise meet at the call of the chairman or upon request of a majority of its members. A majority of the members of the commission shall constitute a quorum to conduct business of the
commission. The director of the department's presence or absence shall not affect the quorum.

(e)

In accordance with rules promulgated by the department, the commission shall:

(i)

Review certificate of need applications submitted for proposed projects as specified by W.S. 35
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2
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1203;

(ii)

Review project loan applications submitted by hospitals as specified by W.S. 35
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2
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1205;

(iii)

Continually monitor the hospital project loan account to ensure the funds in the account are adequate to pay all approved project loans and to fund the administration of this article;

(iv)

Assist the department in promulgating rules required under this article;

(v)

Report not later than September 1 of each year to the governor, the joint labor, health and social services interim committee and the joint appropriations committee with a summary of the commission's work, including:

(A)

The number of certificate of need applications received, approved and denied by the commission and an explanation of the projects sought through each application; and

(B)

The number of project loan applications received, approved and denied by the commission, including the amounts sought under each project loan application, an explanation of the project necessitating each project loan application, the status of all outstanding project loan commitments and repayments and the name and location of each hospital receiving a project loan.

(f)

The department shall provide necessary administrative, technical and clerical support to the commission in administering this article.

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1203.

Certificate of need required; criteria for determining need.

(a)

No person shall commence any project without first obtaining a certificate of need issued by the commission. Any person seeking a certificate of need from the commission shall submit a certificate of need application to the commission on forms prescribed by and subject to rules promulgated by the department.

(b)

No certificate of need shall be issued to an applicant unless the commission has determined that there is a public need for the project as demonstrated by the application. If the commission determines that a public need exists for only a portion of a project, a certificate may be issued for that portion of the project. In determining whether an applicant has demonstrated a public need for a project, the commission shall consider:

(i)

The extent to which the proposed project will meet the needs of the residents of the area to be
served including the effects that the project will have on access to needed services in areas having distinct and unique geographic, socioeconomic, cultural, transportation and other barriers to access to care;

(ii)

The availability of reasonable alternatives to the project that would meet the needs of the residents in a less costly, more efficient or more effective manner, including cooperative efforts to meet regional health care needs;

(iii)

The extent to which the project may foster competition that benefits the area to be served while improving access to needed health care services;

(iv)

The feasibility of the project, including the financial benefits of the project to the applicant, the cost of installation or implementation, the availability of financial and human resources and the anticipated cost;

(v)

Any other factors that may be relevant to the determination of public need for a project as determined by the commission;

(vi)

In the case of a project proposed by or affecting a teaching hospital associated with a public institution of higher education:

(A)

The unique research, training and clinical mission of the teaching hospital; and

(B)

Any contribution the teaching hospital may provide in the delivery, innovation and improvement of health care in the area, including for indigent or underserved populations.

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1204.

Hospital project loan account created; loans from account.

(a)

There is created the hospital project loan account. In addition to any legislative appropriation, the account shall consist of:

(i)

Loan repayments for project loans approved by the commission under W.S. 35
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1205; and

(ii)

Amounts collected or received by the department from hospital assessments under W.S. 35
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1206.

(b)

The state treasurer shall invest amounts deposited within the account in accordance with law and all investment earnings shall be credited back to the account. Unless otherwise directed by the legislature in an appropriation, funds in the account are continuously appropriated to the commission for the purposes specified in this section.

(c)

The account shall be used exclusively for the following purposes:

(i)

To fund project loans approved by the commission under W.S. 35
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1205 for projects for which the commission has issued a certificate of need under W.S. 35
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1203; and

(ii)

To pay administrative expenses incurred by the department and the commission under this article, provided that reimbursement for administrative expenses in any fiscal year shall not exceed a total of one percent (1%) of the aggregate assessment funds collected in that fiscal year.

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1205.

Project loan applications; commission review; requirements.

(a)

Any hospital seeking a certificate of need from the commission may submit a project loan application to the commission for the project that is the subject of the certificate of need. The project loan application shall be on forms prescribed by and subject to rules promulgated by the department. All project loan applications accepted by the commission shall conform with the criteria established by law and rules promulgated by the department.

(b)

The commission shall review completed project loan applications that conform to the requirements of this
article. Within sixty (60) days of receipt of each project loan application, the commission shall approve or disapprove the application and determine the terms and conditions of each approved project loan in accordance with this article and rules of the department. No project loan shall be approved for any purpose other than to purchase the project for which the commission issued a certificate of need under W.S. 35
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1203. No project loans shall be made under this article to refinance existing loans or allow the refinancing of existing loans.

(c)

No project l
oans shall be approved by the commission except upon adequate security as to the payment of the principal by a pledge of and lien upon collateral security in the amounts the commission, in consultation with the attorney general, determines to be necessary to assure the payment of the project loans as they become due.

(d)

The commission may only approve loans to hospitals from the account created under W.S. 35
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1204 for the purchase of projects for which the commission has issued a certificate of need under W.S. 35
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1203. Any
approved project loan shall not exceed three hundred thousand dollars ($300,000.00) and shall not exceed a term of twenty (20) years for repayment for each project loan. Project loans shall be made under this section only if there are sufficient funds in the account to fully fund the project loans and satisfy all other outstanding commitments and obligations.

(e)

The principal of each project loan issued under this section shall be repaid by the debtor hospital in equal annual payments as determined by the department as prescribed by rule. The interest charged on each project loan under this section shall be equal to the average rate of return realized on all permanent mineral trust fund investments as determined by the state treasurer for the five (5) calendar years immediately preceding the year in which the project loan is made. Interest on project loans made under this section shall be paid annually from the account using assessments levied upon each hospital under W.S. 35
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1206.

(f)

No funding shall be provided for any project loan approved under this section except upon the written opinion of the attorney general certifying the legality of the transaction and all connected documents. Upon an approved project loan application by the commission and certification by the attorney general, funding from the hospital project loan account may be distributed to the debtor hospital.

(g)

In consultation with the commission, the department shall promulgate rules for the administration of the project loan program created under this section, including required loan documentation, review and approval procedures, default obligations and other loan procedures and obligations.

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1206.

Assessments.

(a)

Each hospital shall pay a hospital project assessment to the department in accordance with this section and the rules of the department. Any information or documentation submitted by a hospital under this section
shall be confidential and shall not be deemed a public record under W.S. 16
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201 through 16
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205 and shall not be subject to subpoena and shall not be subject to discovery or be admissible in evidence in any private civil action.

(b)

The assessment due under this section shall be imposed each fiscal year in the amount of one
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quarter percent (1/4%) of each hospital's gross receipts for patient services.

(c)

The department shall collect and each hospital shall pay the assessment required by this section on a quarterly basis, each payment constituting twenty
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five percent (25%) of the annual assessment calculated by the department. The initial payment shall be due not later than forty
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five (45) days after the department has provided notice to each hospital of the hospital's specific assessment. Subsequent payments shall be due not later than forty
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five (45) days after the end of each calendar quarter unless a later date is set by the department.

(d)

If a person conducts, operates or maintains more than one (1) hospital licensed by the department, the person shall pay the assessment for each hospital separately.

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1207.

Penalties.

(a)

If a person fails to obtain a certificate of need before commencing a project as required under this article, the person shall be liable for a civil penalty of not less than ten thousand dollars ($10,000.00) and not more than fifty thousand dollars ($50,000.00). The penalty under this section may be reduced or waived by the commission for good cause shown as specified by rule of the department.

(b)

If a hospital fails to pay an assessment when due under this chapter, there shall be added to the assessment a penalty equal to five percent (5%) of the amount of the assessment that was not paid when due. Any payments after a penalty is assessed under this section shall be credited first to unpaid assessment amounts rather than to penalty
or interest amounts, beginning with the most delinquent installment.

(c)

In addition to the penalty under subsection (b) of this section, the department may develop a plan that requires the hospital to pay any delinquent assessment in installments.

Section 2.

The department of health shall promulgate rules and regulations necessary to implement this act on or before January 1, 2021.

Section 3.

(a)

Except as provided in subsection (b) of this section, this act is effective January 1, 2021.

(b)

Sections 2 and 3 of this act are effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

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HB0199