Bill Text: NJ A1591 | 2018-2019 | Regular Session | Introduced
Bill Title: Permits registered surgical practices to convert to or combine with ambulatory care facilities; provides for phased-in gross receipts assessment; authorizes non-profit hospitals to acquire joint ownership interest in practices.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2018-01-09 - Introduced, Referred to Assembly Health and Senior Services Committee [A1591 Detail]
Download: New_Jersey-2018-A1591-Introduced.html
STATE OF NEW JERSEY
218th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION
Sponsored by:
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
Assemblywoman ANGELICA M. JIMENEZ
District 32 (Bergen and Hudson)
Assemblywoman NANCY J. PINKIN
District 18 (Middlesex)
Co-Sponsored by:
Assemblywoman McKnight
SYNOPSIS
Permits registered surgical practices to convert to or combine with ambulatory care facilities; provides for phased-in gross receipts assessment; authorizes non-profit hospitals to acquire joint ownership interest in practices.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning registered surgical practices and ambulatory care facilities and amending P.L.1992, c.160, P.L.1971, c.136, and P.L.1989, c.19.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 19 of P.L.1992, c.160 (C.26:2H-7a) is amended to read as follows:
19. Notwithstanding the provisions of section 7 of P.L.1971, c.136 (C.26:2H-7) to the contrary, the following are exempt from the certificate of need requirement:
Community-based primary care centers;
Outpatient drug and alcohol services;
Hospital-based medical detoxification for drugs and alcohol;
Ambulance and invalid coach services;
Mental health services which are non-bed related outpatient services;
Residential health care facility services;
Dementia care homes;
Capital improvements and renovations to health care facilities;
Additions of medical/surgical, adult intensive care and adult critical care beds in hospitals;
Replacement of existing major moveable equipment;
Inpatient operating rooms;
Alternate family care programs;
Hospital-based subacute care;
Ambulatory care facilities;
Comprehensive outpatient rehabilitation services;
Special child health clinics;
New technology in accordance with the provisions of section 18 of P.L.1998, c.43 (C.26:2H-7d);
Transfer of ownership interest except in the case of an acute care hospital;
Change of site for approved certificate of need within the same county;
Additions to vehicles or hours of operation of a mobile intensive care unit;
Relocation or replacement of a health care facility within the same county, except for an acute care hospital;
Continuing care retirement communities authorized pursuant to P.L.1986, c.103 (C.52:27D-330 et seq.);
Magnetic resonance imaging;
Adult day health care facilities;
Pediatric day health care facilities;
Chronic or acute renal dialysis facilities; [and]
Transfer of ownership of a hospital to an authority in accordance with P.L.2006, c.46 (C.30:9-23.15 et al.); and
Registered surgical practices and licensed ambulatory care facilities taking any action authorized pursuant to subsection k. of section 12 of P.L.1971, c.136 (C.26:2H-12).
(cf: P.L.2015, c.125, s.2)
2. Section 12 of P.L.1971, c.136 (C.26:2H-12) is amended to read as follows:
12. a. No health care service or health care facility shall be operated unless it shall: (1) possess a valid license issued pursuant to this act, which license shall specify the kind or kinds of health care services the facility is authorized to provide; (2) establish and maintain a uniform system of cost accounting approved by the commissioner; (3) establish and maintain a uniform system of reports and audits meeting the requirements of the commissioner; (4) prepare and review annually a long range plan for the provision of health care services; and (5) establish and maintain a centralized, coordinated system of discharge planning which assures every patient a planned program of continuing care and which meets the requirements of the commissioner which requirements shall, where feasible, equal or exceed those standards and regulations established by the federal government for all federally-funded health care facilities but shall not require any person who is not in receipt of State or federal assistance to be discharged against his will.
b. (1) Application for a license for a health care service or health care facility shall be made upon forms prescribed by the department. The department shall charge a single, nonrefundable fee for the filing of an application for and issuance of a license and a single, nonrefundable fee for any renewal thereof, and a single, nonrefundable fee for a biennial inspection of the facility, as it shall from time to time fix in rules or regulations; provided, however, that no such licensing fee shall exceed $10,000 in the case of a hospital and $4,000 in the case of any other health care facility for all services provided by the hospital or other health care facility, and no such inspection fee shall exceed $5,000 in the case of a hospital and $2,000 in the case of any other health care facility for all services provided by the hospital or other health care facility. No inspection fee shall be charged for inspections other than biennial inspections. The application shall contain the name of the health care facility, the kind or kinds of health care service to be provided, the location and physical description of the institution, and such other information as the department may require.
(2) A license shall be issued by the department upon its findings that the premises, equipment, personnel, including principals and management, finances, rules and bylaws, and standards of health care service are fit and adequate and there is reasonable assurance the health care facility will be operated in the manner required by this act and rules and regulations thereunder.
(3) The department shall post on its Internet website each inspection report prepared following an inspection of a residential health care facility, as defined in section 1 of P.L.1953, c.212 (C.30:11A-1) or licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.), that is performed pursuant to this subsection, along with any other inspection report prepared by or on behalf of the department for such facility.
If an inspection reveals a serious health and safety violation at a residential health care facility, the department shall post the inspection report, including the name of the facility and the owner of the facility, on its website no later than 72 hours following the inspection. If a license of a residential health care facility is suspended, the department shall post the suspension on its website no later than 72 hours following the suspension. The department shall update its website to reflect the correction of a serious health and safety violation, and the lifting of a suspension.
The department shall notify, as soon as possible, the Commissioner of Human Services, or the commissioner's designee, and the director of the county board of social services or county welfare agency, as appropriate, in the county in which a residential health care facility is located, of a serious health and safety violation at the facility and of any suspension of a license to operate such facility.
If the inspection responsibilities under this subsection with respect to such facility are transferred or otherwise assigned to another department, that other department shall post on its Internet website each inspection report prepared following an inspection of such facility performed pursuant to this subsection, along with any other inspection report prepared by or on behalf of that department for such facility, and shall comply with the other requirements specified in this subsection.
c. (Deleted by amendment, P.L.1998, c.43).
d. The commissioner may amend a facility's license to reduce that facility's licensed bed capacity to reflect actual utilization at the facility if the commissioner determines that 10 or more licensed beds in the health care facility have not been used for at least the last two succeeding years. For the purposes of this subsection, the commissioner may retroactively review utilization at a facility for a two-year period beginning on January 1, 1990.
e. If a prospective applicant for licensure for a health care service or facility that is not subject to certificate of need review pursuant to P.L.1971, c.136 (C.26:2H-1 et al.) so requests, the department shall provide the prospective applicant with a pre-licensure consultation. The purpose of the consultation is to provide the prospective applicant with information and guidance on rules, regulations, standards and procedures appropriate and applicable to the licensure process. The department shall conduct the consultation within 60 days of the request of the prospective applicant.
f. Notwithstanding the provisions of any other law to the contrary, an entity that provides magnetic resonance imaging or computerized axial tomography services shall be required to obtain a license from the department to operate those services prior to commencement of services, except that a physician who is operating such services on the effective date of P.L.2004, c.54 shall have one year from the effective date of P.L.2004, c.54 to obtain the license.
g. (1) Notwithstanding the provisions of any other law to the contrary, an entity that operates a surgical practice on the effective date of this section of P.L.2009, c.24, as defined in this subsection, shall be required to register with the department within one year of the effective date of P.L.2009, c.24.
(2) An entity that has not commenced operation as a surgical practice on the effective date of this section of P.L.2009, c.24, but has filed or files before the 180th day after the effective date of this section of P.L.2009, c.24 its plans, specifications, and required documents with the municipality in which the surgical practice will be located, shall register with the department prior to the commencement of services.
(3) As a condition of registration with the department, a surgical practice shall be required to obtain certification by the Centers for Medicare and Medicaid Services as an ambulatory surgery center provider or obtain ambulatory care accreditation from an accrediting body recognized by the Centers for Medicare and Medicaid Services. In the case of an approved transfer of ownership, the department shall permit the transferee a reasonable period of time to obtain the required certification or accreditation.
(4) As a condition of registration with the department, a surgical practice shall be required to report the following information annually: the number of patients served by payment source, including the number of Medicaid-eligible and medically indigent persons served; the number of new patients accepted; and the number of physicians, physician assistants, and advanced practice nurses providing professional services at the surgical practice.
(5) As used in this subsection and [subsection] subsections i. and k. of this section, "surgical practice" means a structure or suite of rooms that has the following characteristics:
(a) has no more than one room dedicated for use as an operating room which is specifically equipped to perform surgery, and is designed and constructed to accommodate invasive diagnostic and surgical procedures;
(b) has one or more post-anesthesia care units or a dedicated recovery area where the patient may be closely monitored and observed until discharged; and
(c) except as otherwise authorized by subparagraph (a) of paragraph (1) of subsection k. of this section, is established by a physician, physician professional association surgical practice, or other professional practice form specified by the State Board of Medical Examiners pursuant to regulation solely for the physician's, association's or other professional entity's private medical practice.
"Surgical practice" includes an unlicensed entity that is certified by the Centers for Medicare and Medicaid Services as an ambulatory surgery center provider.
(6) Nothing in this subsection shall be construed to limit the State Board of Medical Examiners from establishing standards of care with respect to the practice of medicine.
h. An ambulatory care facility licensed to provide surgical and related services shall be required to obtain ambulatory care accreditation from an accrediting body recognized by the Centers for Medicare and Medicaid Services as a condition of licensure by the department.
An ambulatory care facility that is licensed to provide surgical and related services on the effective date of this section of P.L.2009, c.24 shall have one year from the effective date of this section of P.L.2009, c.24 to obtain ambulatory care accreditation.
i. Beginning on the effective date of this section of P.L.2009, c.24, the department shall not issue a new registration to a surgical practice or a new license to an ambulatory care facility to provide surgical and related services unless:
(1) in the case of a registered surgical practice or licensed facility in which a transfer of ownership of the practice or facility is proposed, the commissioner reviews the qualifications of the new owner or owners and approves the transfer;
(2) (a) except as provided in subparagraph (b) of this paragraph, in the case of a registered surgical practice or licensed facility for which a relocation of the practice or facility is proposed, the relocation is within 20 miles of the practice's or facility's current location or the relocation is to a "Health Enterprise Zone" designated pursuant to section 1 of P.L.2004, c.139 (C.54A:3-7), there is no expansion in the scope of services provided at the new location from that of the current location, and the commissioner reviews and approves the relocation; or
(b) in the case of a licensed facility described in paragraph (5) or (6) of this subsection for which a relocation of the facility is proposed, the commissioner reviews and approves the relocation;
(3) the entity is a surgical practice required to be registered pursuant to paragraph (1) of subsection g. of this section and meets the requirements of that subsection;
(4) the entity has filed its plans, specifications, and required documents with the Health Care Plan Review Unit of the Department of Community Affairs or the municipality in which the surgical practice or facility will be located, as applicable, on or before the 180th day following the effective date of this section of P.L.2009, c.24;
(5) the facility is owned jointly by a general hospital in this State and one or more other parties; or
(6) the facility is owned by a hospital or medical school.
j. (1) The department shall require an applicant for registration as a surgical practice, as provided in subsection g. of this section, to submit an application for registration in a form and manner prescribed by the department. The applicant shall submit the name and address of the surgical practice that is to be registered, the name of the chief administrator or designated agent of the practice, the names and addresses of all owners of the practice, the scope of services provided at the practice, proof of certification by the Centers for Medicare and Medicaid Services or accreditation from an accrediting body recognized by the Centers for Medicare and Medicaid Services, and such other information as the commissioner deems necessary and as provided by regulation.
(2) The registration shall be valid for a [one-year] two-year period and may be renewed upon submission to the department of an application for renewal.
(3) The commissioner may suspend, revoke, or deny a registration if the registrant or applicant, as applicable, is not in compliance with the requirements of this section.
(4) No registered surgical practice shall be owned, managed, or operated by any person convicted of a crime relating adversely to the person's capability of owning, managing, or operating the practice.
(5) The department may charge a reasonable fee for filing an application for registration and for each renewal thereof.
k. (1) On or after the effective date of P.L. , c. (pending before the Legislature as this bill), the department may authorize a registered surgical practice to:
(a) Allow a non-profit hospital, or an entity owned in part by a non-profit hospital, to acquire a joint ownership interest in the registered surgical practice, provided that all clinically-related decisions at the practice are made by practitioners and are in the best interests of the patient;
(b) Convert to a licensed ambulatory surgical facility, provided that the number of operating rooms at the facility is not greater than the number of operating rooms at the surgical practice at the time of conversion;
(c) Combine with one or more other registered surgical practices to form a licensed ambulatory surgical facility, provided that the number of operating rooms at the facility is not greater than the total number of operating rooms at the surgical practices at the time of combination and conversion; or
(d) Combine with a licensed ambulatory care facility to expand the scope of services provided by the facility, provided the facility does not expand by more than the total number of operating rooms at the surgical practice.
(2) On or after the effective date of P.L. , c. (pending before the Legislature as this bill), the department may authorize two or more licensed ambulatory surgical facilities to combine, provided that the number of operating rooms at the combined facility is not greater than the total number of operating rooms at the facilities at the time of combination.
(3) The commissioner shall not approve an application for an action authorized under paragraphs (1) or (2) of this subsection unless each entity included in the application possesses a current registration or license and is in compliance with all statutory and regulatory requirements necessary to complete the action. If the requested action requires an entity to obtain certification by the Centers for Medicare and Medicaid Services or obtain accreditation from an accrediting body recognized by the Centers for Medicare and Medicaid Services, the commissioner shall permit the entity a reasonable period of time to obtain the required certification or accreditation.
(4) The department shall require a registered surgical practice or licensed ambulatory care facility seeking to take any action pursuant to paragraphs (1) or (2) of this subsection to submit an application in a form and manner prescribed by the department. The application shall include, for each registered surgical practice and licensed ambulatory care facility included in the application, the following information: the name of the entity's chief administrator or designated agent; the entity's address; the names and addresses of each owner of the entity; the entity's registration or license number; a physical description of the entity, if applicable; documentation establishing the entity is in compliance with all applicable statutory and regulatory requirements, including proof of certification by the Centers for Medicare and Medicaid Services or accreditation from an accrediting body recognized by the Centers for Medicare and Medicaid Services; and any other information as may be required by the department. The fees for application and licensure, license renewal, and biennial inspection shall be as set forth in paragraph (1) of subsection b. of this section.
(5) The certificate of need requirement shall not apply to an action taken by a registered surgical practice or ambulatory care facility pursuant to paragraphs (1) or (2) of this subsection.
(cf: P.L.2015, c.6, s.1)
3. Section 7 of P.L.1992, c.160 (C.26:2H-18.57) is amended to read as follows:
7. a. Effective January 1, 1994, the Department of Health shall assess each hospital a per adjusted admission charge of $10.
Of the revenues raised by the hospital per adjusted admission charge, $5 per adjusted admission shall be used by the department to carry out its duties pursuant to P.L.1992, c.160 (C.26:2H-18.51 et al.) and $5 per adjusted admission shall be used by the department for administrative costs related to health planning.
b. Effective July 1, 2004, the department shall assess each licensed ambulatory care facility that is licensed to provide one or more of the following ambulatory care services: ambulatory surgery, computerized axial tomography, comprehensive outpatient rehabilitation, extracorporeal shock wave lithotripsy, magnetic resonance imaging, megavoltage radiation oncology, positron emission tomography, orthotripsy, and sleep disorder services. The Commissioner of Health may, by regulation, add additional categories of ambulatory care services that shall be subject to the assessment if such services are added to the list of services provided in N.J.A.C.8:43A-2.2(b) after the effective date of P.L.2004, c.54.
The assessment established in this subsection shall not apply to an ambulatory care facility that is licensed to a hospital in this State as an off-site ambulatory care service facility.
(1) For Fiscal Year 2005, the assessment on an ambulatory care facility providing one or more of the services listed in this subsection shall be based on gross receipts for the 2003 tax year as follows:
(a) a facility with less than $300,000 in gross receipts shall not pay an assessment; and
(b) a facility with at least $300,000 in gross receipts shall pay an assessment equal to 3.5% of its gross receipts or $200,000, whichever amount is less.
The commissioner shall provide notice no later than August 15, 2004 to all facilities that are subject to the assessment that the first payment of the assessment is due October 1, 2004 and that proof of gross receipts for the facility's tax year ending in calendar year 2003 shall be provided by the facility to the commissioner no later than September 15, 2004. If a facility fails to provide proof of gross receipts by September 15, 2004, the facility shall be assessed the maximum rate of $200,000 for Fiscal Year 2005.
The Fiscal Year 2005 assessment shall be payable to the department in four installments, with payments due October 1, 2004, January 1, 2005, March 15, 2005 and June 15, 2005.
(2) For Fiscal Year 2006, the commissioner shall use the calendar year 2004 data submitted in accordance with subsection c. of this section to calculate a uniform gross receipts assessment rate for each facility with gross receipts over $300,000 that is subject to the assessment, except that no facility shall pay an assessment greater than $200,000. The rate shall be calculated so as to raise the same amount in the aggregate as was assessed in Fiscal Year 2005. A facility shall pay its assessment to the department in four payments in accordance with a timetable prescribed by the commissioner.
(3) Beginning in Fiscal Year 2007 and for each fiscal year thereafter through Fiscal Year 2010, the uniform gross receipts assessment rate calculated in accordance with paragraph (2) of this subsection shall be applied to each facility subject to the assessment with gross receipts over $300,000, as those gross receipts are documented in the facility's most recent annual report to the department, except that no facility shall pay an assessment greater than $200,000. A facility shall pay its annual assessment to the department in four payments in accordance with a timetable prescribed by the commissioner.
(4) [Beginning] Except as provided in paragraph (5) of this subsection, beginning in Fiscal Year 2011 and for each fiscal year thereafter, the uniform gross receipts assessment shall be applied at the rate of 2.95% to each facility subject to the assessment with gross receipts over $300,000, as those gross receipts are documented in the facility's most recent annual report submitted to the department pursuant to subsection c. of this section, except that no facility shall pay an assessment greater than $350,000. A facility shall pay its annual assessment to the department in four payments in accordance with a timetable prescribed by the commissioner.
(5) In the case of a licensed ambulatory surgical facility created by the conversion of one or more registered surgical practices pursuant to subparagraphs (b) or (c) of paragraph (1) of subsection k. of section 12 of P.L.1971, c.136 (C.26:2H-12), and in the case of an ambulatory care facility that expands by combining with a registered surgical practice pursuant to subparagraph (d) of paragraph (1) of subsection k. of section 12 of P.L.1971, c.136 (C.26:2H-12), the assessment shall be as follows:
(a) a facility with less than $300,000 in gross receipts shall not pay an assessment under this paragraph, and in no case shall a facility pay an assessment greater than $350,000;
(b) for the first complete fiscal year following the conversion or combination, the facility shall not pay an assessment;
(c) for the second complete fiscal year following the conversion or combination, the assessment shall be 0.74% of gross receipts from the prior fiscal year;
(d) for the third complete fiscal year following the conversion or combination, the assessment shall be 1.48% of gross receipts from the prior fiscal year;
(e) for the fourth complete fiscal year following the conversion or combination, the assessment shall be 2.22% of gross receipts from the prior fiscal year; and
(f) for the fifth and each subsequent complete fiscal year following the conversion or combination, the assessment shall be as provided in paragraph (4) of this subsection.
In the case of a facility that expands by combining with a registered surgical practice, the assessments set forth in subparagraphs (a) through (e) of this paragraph shall apply only to the expanded portion of the facility; the assessment for the gross receipts generated in the remainder of the facility, and the assessment for the gross receipts generated in the entire facility in the fifth and each subsequent complete fiscal year following the combination, shall be as set forth in paragraph (4) of this subsection.
c. Each ambulatory care facility that is subject to the assessment provided in subsection b. of this section shall submit an annual report including, at a minimum, data on volume of patient visits, charges, and gross revenues, by payer type, for patient services, beginning with calendar year 2004 data. The annual report shall be submitted to the department according to a timetable and in a form and manner prescribed by the commissioner.
The department may audit selected annual reports in order to determine their accuracy.
d. (1) If, upon audit as provided for in subsection c. of this section, it is determined that an ambulatory care facility understated its gross receipts in its annual report to the department, the facility's assessment for the fiscal year that was based on the defective report shall be retroactively increased to the appropriate amount and the facility shall be liable for a penalty in the amount of the difference between the original and corrected assessment.
(2) A facility that fails to provide the information required pursuant to subsection c. of this section shall be liable for a civil penalty not to exceed $500 for each day in which the facility is not in compliance.
(3) A facility that is operating one or more of the ambulatory care services listed in subsection b. of this section without a license from the department, on or after July 1, 2004, shall be liable for double the amount of the assessment provided for in subsection b. of this section, in addition to such other penalties as the department may impose for operating an ambulatory care facility without a license.
(4) The commissioner shall recover any penalties provided for in this subsection in an administrative proceeding in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
e. The revenues raised by the ambulatory care facility assessment pursuant to this section shall be deposited in the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58).
(cf: P.L.2012, c.17, s.222)
4. Section 2 of P.L.1989, c.19 (C.45:9-22.5) is amended to read as follows:
2. a. A practitioner shall not refer a patient or direct an employee of the practitioner to refer a patient to a health care service in which the practitioner, or the practitioner's immediate family, or the practitioner in combination with the practitioner's immediate family has a significant beneficial interest; except that, in the case of a practitioner, a practitioner's immediate family, or a practitioner in combination with the practitioner's immediate family who had the significant beneficial interest prior to the effective date of P.L.1991, c.187 (C.26:2H-18.24 et al.), and in the case of a significant beneficial interest in a health care service that provides lithotripsy or radiation therapy pursuant to an oncological protocol that was held prior to the effective date of this section of P.L.2009, c.24, the practitioner may continue to refer a patient or direct an employee to do so if that practitioner discloses the significant beneficial interest to the patient.
b. If a practitioner is permitted to refer a patient to a health care service pursuant to this section, the practitioner shall provide the patient with a written disclosure form, prepared pursuant to section 3 of P.L.1989, c.19 (C.45:9-22.6), and post a copy of this disclosure form in a conspicuous public place in the practitioner's office.
c. The restrictions on referral of patients established in this section shall not apply to:
(1) medical treatment or a procedure that is provided at the practitioner's medical office and for which a bill is issued directly in the name of the practitioner or the practitioner's medical office;
(2) renal dialysis; and
(3) ambulatory surgery or procedures requiring anesthesia performed at a surgical practice registered with the Department of Health pursuant to subsection g. of section 12 of P.L.1971, c.136 (C.26:2H-12) or at an ambulatory care facility licensed by the Department of Health to perform surgical and related services or lithotripsy services, if the following conditions are met:
(a) the practitioner who provided the referral personally performs the procedure;
(b) the practitioner's remuneration as an owner of or investor in the practice or facility is directly proportional to the practitioner's ownership interest and not to the volume of patients the practitioner refers to the practice or facility;
(c) all clinically-related decisions at a facility or, pursuant to subparagraph (a) of paragraph (1) of subsection k. of section 12 of P.L.1971, c.136 (C.26:2H-12), a registered surgical practice owned in part by non-practitioners are made by practitioners and are in the best interests of the patient; and
(d) disclosure of the referring practitioner's significant beneficial interest in the practice or facility is made to the patient in writing, at or prior to the time that the referral is made, consistent with the provisions of section 3 of P.L.1989, c.19 (C.45:9-22.6).
(cf: P.L.2013, c.178, s.1)
5. The Commissioner of Health shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt such rules and regulations as shall be necessary to implement the provisions of this act.
6. This act shall take effect immediately.
STATEMENT
This bill authorizes surgical practices registered with the Department of Health (DOH) to convert to an ambulatory surgery facility, combine with an existing ambulatory care facility to expand the services offered through that facility, or allow a non-profit hospital or an entity owned in part by a non-profit hospital to acquire a joint ownership interest in the facility. The bill additionally permits two or more licensed ambulatory surgical facilities to combine. A conversion or combination will not be permitted under the bill if it would result in a net increase in the total number of operating rooms. The certificate of need requirement will not apply to a combination or conversion approved under the bill.
Any action taken under the bill to combine or convert will require approval by the Commissioner of Health. Each entity included in the application to combine or convert will be required to possess a current registration or license and be in compliance with all rules and regulations necessary to complete the action. The application will be in a form and manner prescribed by DOH, and will include the following information for each entity included in the application: the name of the entity's chief administrator or designated agent; the entity's address; the names and addresses of each owner of the entity; the entity's registration or license number; a physical description of the entity, if applicable; documentation of compliance with all statutory and regulatory requirements; and any other information as DOH may require. The current application and licensure fees, renewal fees, inspection fees and other inspection requirements that apply to licensed health care facilities will apply to entities that are approved for combination or conversion under the bill.
If the combination or conversion will require the entity to obtain certification by the Centers for Medicare and Medicaid Services (CMS) or obtain accreditation from an accrediting body recognized by CMS, the commissioner is to permit the entity a reasonable period of time to obtain the required certification or accreditation. The bill additionally provides that, in the case of an approved transfer of ownership of a registered surgical practice, DOH is to permit the transferee a reasonable period of time to obtain the required CMS certification or accreditation.
A facility resulting from an approved conversion or combination under the bill will be subject to a phased-in gross receipts assessment. In the first complete fiscal year following restructuring, the facility will not pay an assessment; in the second complete fiscal year, the assessment will be 0.74% of gross receipts from the prior fiscal year; in the third complete fiscal year, the assessment will be 1.48% of gross receipts from the prior fiscal year; in the fourth complete fiscal year, the assessment will be 2.22% of gross receipts from the prior fiscal year; and in the fifth and each subsequent complete fiscal year, the assessment will be 2.95% of gross receipts from the prior fiscal year, which is the assessment that currently applies to licensed facilities. In the case of a licensed ambulatory care facility that combines with a registered surgical practice to expand the services provided by the facility, the phased-in assessment will only apply to gross receipts generated by the expanded portion of the facility. As under current law, no assessment will apply to a facility with gross receipts that are less than $300,000, and no facility will be required to pay an assessment of more than $350,000.
In the case of a non-profit hospital acquiring joint ownership of a registered surgical practice, the bill provides that the exception from the prohibition against practitioner self-referrals (i.e. referring patients to a health care service in which the practitioner or a family member has a significant beneficial interest) which currently applies to registered surgical practices will extend to registered surgical practices in which a non-profit hospital acquires joint ownership. The exception requires that the practitioner who provided the referral personally performs the procedure, the practitioner's remuneration as an owner of or investor in the registered surgical practice is directly proportional to the practitioner's ownership interest and not to the volume of patient referrals, all clinically-related decisions at the registered surgical practice are made by practitioners and are in the best interests of the patient, and the practitioner provides written disclosure of the significant beneficial interest at or prior to the time the referral is made.
This bill also changes the duration of a registration for a surgical practice from one year to two years.
It is the sponsor's belief that facilitating the consolidation and restructuring of registered surgical practices is consistent with current market trends in the health care industry and will help improve and enhance the quality and safety of patient care.
