Bill Text: OR HB2056 | 2013 | Regular Session | Engrossed

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Bill Title: Relating to long term care facilities; prescribing an effective date; providing for revenue raising that requires approval by a three-fifths majority.

Spectrum: Unknown

Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB2056 Detail]

Download: Oregon-2013-HB2056-Engrossed.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 376

                           B-Engrossed

                         House Bill 2056
                  Ordered by the House April 8
      Including House Amendments dated April 2 and April 8

Introduced and printed pursuant to House Rule 12.00. Presession
  filed (at the request of Governor John A. Kitzhaber, M.D., for
  Department of Human Services)

                             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.

  Extends long term care facility assessment to July 1, 2020.
Authorizes Department of Human Services to convene meetings and
conduct surveys for purpose of reducing long term care facility
bed capacity statewide. Establishes procedures for licensee of
long term care facility to purchase bed capacity of another long
term care facility. Authorizes department to pay additional
reimbursements to purchaser of bed capacity under specified
conditions. Provides antitrust immunity under state action
doctrine.
    { - Declares emergency, effective on passage. - }
   { +  Takes effect on 91st day following adjournment sine
die. + }

                        A BILL FOR AN ACT
Relating to long term care facilities; creating new provisions;
  amending ORS 442.015 and 442.315 and sections 18, 23, 24 and
  31, chapter 736, Oregon Laws 2003; prescribing an effective
  date; and providing for revenue raising that requires approval
  by a three-fifths majority.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2013 Act is added to and made
a part of ORS chapter 442. + }
  SECTION 2.  { + (1) The Legislative Assembly finds that:
  (a) A significant amount of public and private funds are
expended each year for long term care services provided to
Oregonians;
  (b) Oregon has established itself as the national leader in
providing a choice of noninstitutional care to low income
Oregonians in need of long term care services by developing an
extensive system of home health care and community-based care;
and
  (c) Long term care facilities continue to provide critical
services to some of Oregon's most frail and vulnerable residents
with complex needs. Increasingly, long term care facilities are
filling a need for transitional care between hospitals and home

settings in a cost-effective manner, reducing the overall costs
of long term care.
  (2) The Legislative Assembly declares its support for
collaboration among state agencies that purchase health services
and private health care providers in order to align financial
incentives with the goals of achieving better patient care and
improved health status while restraining growth in the per capita
cost of health care.
  (3) It is the goal of the Legislative Assembly that the long
term care facility bed capacity in Oregon be reduced by 1,500
beds by December 31, 2015, except for bed capacity in nursing
facilities operated by the Department of Veterans' Affairs and
facilities that either applied to the Oregon Health Authority for
a certificate of need between August 1, 2011, and December 1,
2012, or submitted a letter of intent under ORS 442.315 (7)
between January 15, 2013, and January 31, 2013.
  (4) In order to reduce the long term care facility bed capacity
statewide, the Department of Human Services may permit an
operator of a long term care facility to purchase another long
term care facility's entire bed capacity if:
  (a) The long term care facility bed capacity being purchased is
not in an essential long term care facility; and
  (b) The long term care facility's entire bed capacity is
purchased and the seller agrees to surrender the long term care
facility's license on the earlier of the date that:
  (A) The last resident is transferred from the facility; or
  (B) Is 180 days after the date of purchase.
  (5) If a long term care facility's entire bed capacity is
purchased, the facility may not admit new residents to the
facility except in accordance with criteria adopted by the
Department of Human Services by rule.
  (6) Long term care bed capacity purchased under this section
may not be transferred to another long term care facility.
  (7) The Department of Human Services may convene meetings with
representatives of entities that include, but are not limited to,
long term care providers, nonprofit trade associations and state
and local governments to collaborate in strategies to reduce long
term care facility bed capacity statewide. Participation shall be
on a voluntary basis. Meetings shall be held at a time and place
that is convenient for the participants.
  (8) The Department of Human Services may conduct surveys of
entities and individuals specified in subsection (7) of this
section concerning current long term care facility bed capacity
and strategies for increasing future capacity.
  (9) Based on the findings in subsection (1) of this section and
the declaration expressed in subsection (2) of this section, the
Legislative Assembly declares its intent to exempt from state
antitrust laws and provide immunity from federal antitrust laws
through the state action doctrine individuals and entities that
engage in transactions, meetings or surveys described in
subsections (4), (7) and (8) of this section that might otherwise
be constrained by such laws.
  (10) The Director of Human Services or the director's designee
shall engage in appropriate state supervision necessary to
promote state action immunity under state and federal antitrust
laws, and may inspect or request additional documentation to
verify that the individuals and entities acting pursuant to
subsection (4), (7) or (8) of this section are acting in
accordance with the legislative intent expressed in this section.
  (11) The Director of Human Services or the director's designee,
in consultation with the Long Term Care Ombudsman, shall engage
in regional planning necessary to promote the safety and dignity
of residents living in a long term care facility that surrenders
its license under this section. + }
  SECTION 3. 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, with
intention 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
services 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) '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) 'Budget' means the projections by the hospital for a
specified future time period of expenditures and revenues with
supporting statistical indicators. - }
    { - (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.
   { +  (5) 'Essential long term care facility' means an
individual long term care facility that serves predominantly
rural and frontier communities, as designated by the Office of
Rural Health, and meets other criteria established by the
Department of Human Services by rule. + }
  (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.
  (7) 'Freestanding birthing center' means a facility licensed
for the primary purpose of performing low risk deliveries.
  (8) 'Governmental unit' means the state, or any county,
municipality or other political subdivision, or any related
department, division, board or other agency.
  (9) '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.
  (10)(a) 'Health care facility' means:
  (A) A hospital;
  (B) A long term care facility;
  (C) An ambulatory surgical center;
  (D) A freestanding birthing center; or
  (E) An outpatient renal dialysis center.
  (b) 'Health care facility' does not mean:
  (A) A residential facility licensed by the Department of Human
Services or the Oregon Health 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 established under ORS 430.620.
  (11) 'Health maintenance organization' or 'HMO' means a public
organization or a private 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, including 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.
  (12) '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.
  (13) 'Hospital' means:
  (a) A facility with an organized medical staff and a permanent
building that is capable of providing 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   { - Oregon Health - }  authority by rule.
  (14) 'Institutional health services' means health services
provided in or through health care facilities and includes the
entities in or through which such services are provided.
  (15) '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.
  (16) 'Long term care facility' means a facility with permanent
facilities that include inpatient beds, providing medical
services, including nursing services but excluding surgical
procedures except as may be permitted by the rules of the
Director of Human Services, to provide treatment for two or more
unrelated patients. 'Long term care facility' includes skilled
nursing facilities and intermediate care facilities but may not
be construed to include facilities licensed and operated pursuant
to ORS 443.400 to 443.455.
  (17) 'New hospital' means 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. 'New hospital' also includes any
replacement of an existing hospital that involves a substantial
increase or change in the services offered.
  (18) 'New skilled nursing or intermediate care service or
facility' means a service or facility 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 { +  in a facility that
applied for a certificate of need between August 1, 2011, and
December 1, 2012, or submitted a letter of intent under ORS
442.315 (7) between January 15, 2013, and January 31, 2013 + }.
  (19) '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.
  (20) 'Outpatient renal dialysis facility' means a facility that
provides renal dialysis services directly to outpatients.
  (21) 'Person' means an individual, a trust or estate, a
partnership, a corporation (including associations, joint stock
companies and insurance companies), a state, or a political
subdivision or instrumentality, including a municipal
corporation, of a state.
  (22) 'Skilled nursing facility' means a facility or a distinct
part of a facility, that is primarily 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 rehabilitation of
individuals who are injured or sick or who have disabilities.
  SECTION 4. 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 { + , and any long term care facility for which a
license was surrendered under section 2 of this 2013 Act, + }
shall obtain a certificate of need from the Oregon Health
Authority 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) The authority shall be the decision-making authority for
the purpose of certificates of need. { +  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 facility or
relocate long term care facility bed capacity from one long term
care facility to another. The authority shall issue a proposed
order not later than 120 days after the date a complete
application for expedited review is received by the
authority. + }
  (5)(a) An applicant or any affected person who is dissatisfied
with the proposed decision of the authority is entitled to an
informal hearing in the course of review and before a final
decision is rendered.
  (b) Following a final decision being rendered by the authority,
an applicant or any affected person may request a reconsideration
hearing pursuant to ORS chapter 183.
  (c) In any proceeding brought by an affected person or an
applicant challenging an authority decision under this
subsection, the authority shall follow procedures consistent with
the provisions of ORS chapter 183 relating to a contested case.
  (6) Once a certificate of need has been issued, 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
developing a project that is not within the scope of the
certificate of need, the authority may limit the project as
specified in the issued 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 (5)(a)(A) and (B) to obtain a certificate of need.
  (9) Nothing in this section applies to basic health services,
but basic health services do not include:
  (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 processes, 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 facilities or services and those services specified in
subsection (9) of this section.
  SECTION 5. Section 18, chapter 736, Oregon Laws 2003, as
amended by section 34, chapter 736, Oregon Laws 2003, section 7,
chapter 757, Oregon Laws 2005, and section 10, chapter 780,
Oregon Laws 2007, is amended to read:
   { +  Sec. 18. + }   { - (1) - }  The Oregon Veterans' Home is
exempt from the assessment imposed under section 16, chapter 736,
Oregon Laws 2003.
    { - (2) A waivered long term care facility is exempt from the
long term care facility assessment imposed under section 16,
chapter 736, Oregon Laws 2003. - }
    { - (3) As used in this section, 'waivered long term care
facility' means: - }
    { - (a) A long term care facility operated by a continuing
care retirement community that is registered under ORS 101.030
and that admits: - }
    { - (A) Residents of the continuing care retirement
community; or - }
    { - (B) Residents of the continuing care retirement community
and nonresidents; or - }
    { - (b) A long term care facility that is annually identified
by the Department of Human Services as having a Medicaid
recipient census that exceeds the census level established by the
department for the year for which the facility is identified. - }

  SECTION 6. Section 23, chapter 736, Oregon Laws 2003, as
amended by section 8, chapter 757, Oregon Laws 2005, and section
11, chapter 780, Oregon Laws 2007, is amended to read:
   { +  Sec. 23. + } Sections 15 to 22, chapter 736, Oregon Laws
2003, apply to long term care facility assessments imposed in
calendar quarters beginning on or after November 26, 2003, and
before July 1,   { - 2014 - }  { +  2020 + }.
  SECTION 7. Section 24, chapter 736, Oregon Laws 2003, as
amended by section 11, chapter 757, Oregon Laws 2005, and section
12, chapter 780, Oregon Laws 2007, is amended to read:
   { +  Sec. 24. + } (1) The Long Term Care Facility Quality
Assurance Fund is established in the State Treasury, separate and
distinct from the General Fund. Interest earned by the Long Term
Care Facility Quality Assurance Fund shall be credited to the
fund.
  (2) Amounts in the Long Term Care Facility Quality Assurance
Fund are continuously appropriated to the Department of Human
Services for the purposes of paying refunds due under section 20,
chapter 736, Oregon Laws 2003, and funding long term care
facilities, as defined in section 15, chapter 736, Oregon Laws
2003, that are a part of the Oregon Medicaid reimbursement
system.
  (3) Funds in the Long Term Care Facility Quality Assurance Fund
and the matching federal financial participation under Title XIX
of the Social Security Act may be used to fund Medicaid-certified
long term care facilities using only the reimbursement
methodology described in   { - subsection (4) - }  { +
subsections (4) and (5) + } of this section to achieve a rate of
reimbursement greater than the rate in effect on June 30, 2003.
  (4) The reimbursement methodology used to make additional
payments to Medicaid-certified long term care facilities includes
but is not limited to:
  (a) Rebasing   { - biennially, beginning on July 1 of each
odd-numbered year - }  { +  on July 1 of each year + };
    { - (b) Adjusting for inflation in the nonrebasing year; - }
    { - (c) - }  { +  (b) + } Continuing the use of the pediatric
rate;
    { - (d) - }  { +  (c) + } Continuing the use of the complex
medical needs additional payment; { +  and + }
    { - (e) - }  { +  (d) + } Discontinuing the use of the
relationship percentage, except when calculating the pediatric
rate in paragraph   { - (c) - }  { +  (b) + } of this subsection
 { - ; and - }  { + . + }
   { +  (5) In addition to the reimbursement methodology
described in subsection (4) of this section, the department may
make additional payments of $9.75 per resident who receives
medical assistance to a long term care facility that purchased
long term care bed capacity under section 2 of this 2013 Act on
or after October 1, 2013, and on or before December 31, 2015. The
payments may be made for a period of four years from the date of
purchase. The department may not make additional payments under
this section until the Medicaid-certified long term care facility
is found by the department to meet quality standards adopted by
the department by rule. + }
    { - (f) - }   { + (6)(a) + }   { - Requiring - }  { +
 + }The department   { - of Human Services to - }  { +  shall + }
reimburse costs { +  using the methodology described in
subsections (4) and (5) of this section + } at a rate not lower
than
  { - the 63rd percentile ceiling - }  { +  a percentile + } of
allowable costs for the   { - biennium - }  { +  period + } for
which the reimbursement is made.
   { +  (b) For the period beginning July 1, 2013, and ending
June 30, 2016, the department shall reimburse costs at a rate not
lower than the 63rd percentile of rebased allowable costs for
that period.
  (c) For each three-month period beginning on or after July 1,
2016, in which the reduction in bed capacity in
Medicaid-certified long term care facilities is less than the
goal established in section 2 of this 2013 Act, the department
shall reimburse costs at a rate not lower than the percentile of
allowable costs according to the following schedule:
  (A) 62nd percentile for a reduction of 1,350 or more beds.
  (B) 61st percentile for a reduction of 1,200 or more beds but
less than 1,350 beds.
  (C) 60th percentile for a reduction of 1,050 or more beds but
less than 1,200 beds.
  (D) 59th percentile for a reduction of 900 or more beds but
less than 1,050 beds.
  (E) 58th percentile for a reduction of 750 or more beds but
less than 900 beds.
  (F) 57th percentile for a reduction of 600 or more beds but
less than 750 beds.
  (G) 56th percentile for a reduction of 450 or more beds but
less than 600 beds.
  (H) 55th percentile for a reduction of 300 or more beds but
less than 450 beds.
  (I) 54th percentile for a reduction of 150 or more beds but
less than 300 beds.
  (J) 53rd percentile for a reduction of 1 to 49 beds.
  (7) A reduction in the percentile of allowable costs reimbursed
under subsection (6) of this section is not subject to ORS
410.555. + }
  SECTION 8. Section 31, chapter 736, Oregon Laws 2003, as
amended by section 9, chapter 757, Oregon Laws 2005, section 14,
chapter 780, Oregon Laws 2007, and section 49, chapter 11, Oregon
Laws 2009, is amended to read:
   { +  Sec. 31. + } Sections 15 to 22, 24 and 29, chapter 736,
Oregon Laws 2003, are repealed on   { - January 2, 2015 - }  { +
January 2, 2021 + }.
  SECTION 9. ORS 442.015, as amended by section 3 of this 2013
Act, 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, with
intention 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
services 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) '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) '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.
    { - (5) 'Essential long term care facility' means an
individual long term care facility that serves predominantly
rural and frontier communities, as designated by the Office of
Rural Health, and meets other criteria established by the
Department of Human Services by rule. - }
    { - (6) - }  { +  (5) + } '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.
    { - (7) - }  { +  (6) + } 'Freestanding birthing center'
means a facility licensed for the primary purpose of performing
low risk deliveries.
    { - (8) - }  { +  (7) + } 'Governmental unit' means the
state, or any county, municipality or other political
subdivision, or any related department, division, board or other
agency.
    { - (9) - }  { +  (8) + } '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.
    { - (10)(a) - }  { +  (9)(a) + } 'Health care facility'
means:
  (A) A hospital;
  (B) A long term care facility;
  (C) An ambulatory surgical center;
  (D) A freestanding birthing center; or
  (E) An outpatient renal dialysis center.
  (b) 'Health care facility' does not mean:
  (A) A residential facility licensed by the Department of Human
Services or the Oregon Health 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 established under ORS 430.620.
    { - (11) - }  { +  (10) + } 'Health maintenance organization'
or 'HMO ' means a public organization or a private 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, including 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.
    { - (12) - }  { +  (11) + } '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.
    { - (13) - }  { +  (12) + } 'Hospital' means:
  (a) A facility with an organized medical staff and a permanent
building that is capable of providing 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.
    { - (14) - }  { +  (13) + } 'Institutional health services'
means health services provided in or through health care
facilities and includes the entities in or through which such
services are provided.
    { - (15) - }  { +  (14) + } '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.
    { - (16) - }  { +  (15) + } 'Long term care facility' means a
facility with permanent facilities that include inpatient beds,
providing medical services, including nursing services but
excluding surgical procedures except as may be permitted by the
rules of the Director of Human Services, to provide treatment for
two or more unrelated patients. 'Long term care facility'
includes skilled nursing facilities and intermediate care
facilities but may not be construed to include facilities
licensed and operated pursuant to ORS 443.400 to 443.455.
    { - (17) - }  { +  (16) + } 'New hospital' means 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. 'New hospital'
also includes any replacement of an existing hospital that
involves a substantial increase or change in the services
offered.
    { - (18) - }  { +  (17) + } 'New skilled nursing or
intermediate care service or facility' means a service or
facility 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   { - in a facility that applied for a
certificate of need between August 1, 2011, and December 1, 2012,
or submitted a letter of intent under ORS 442.315 (7) between
January 15, 2013, and January 31, 2013 - } .
    { - (19) - }  { +  (18) + } '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.
    { - (20) - }  { +  (19) + } 'Outpatient renal dialysis
facility' means a facility that provides renal dialysis services
directly to outpatients.
    { - (21) - }  { +  (20) + } 'Person' means an individual, a
trust or estate, a partnership, a corporation (including
associations, joint stock companies and insurance companies), a
state, or a political subdivision or instrumentality, including a
municipal corporation, of a state.
    { - (22) - }  { +  (21) + } 'Skilled nursing facility' means
a facility or a distinct part of a facility, that is primarily
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 rehabilitation of individuals who are injured or sick or who
have disabilities.
  SECTION 10. ORS 442.315, as amended by section 4 of this 2013
Act, 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  { - , and any long term care facility for which a
license was surrendered under section 2 of this 2013 Act, - }
shall obtain a certificate of need from the Oregon Health
Authority 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) The authority shall be the decision-making authority for
the purpose of certificates of need. 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 facility or relocate long term
care facility bed capacity from one long term care facility to
another. The authority shall issue a proposed order not later
than 120 days after the date a complete application for expedited
review is received by the authority.
  (5)(a) An applicant or any affected person who is dissatisfied
with the proposed decision of the authority is entitled to an
informal hearing in the course of review and before a final
decision is rendered.
  (b) Following a final decision being rendered by the authority,
an applicant or any affected person may request a reconsideration
hearing pursuant to ORS chapter 183.
  (c) In any proceeding brought by an affected person or an
applicant challenging an authority decision under this
subsection, the authority shall follow procedures consistent with
the provisions of ORS chapter 183 relating to a contested case.

  (6) Once a certificate of need has been issued, 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
developing a project that is not within the scope of the
certificate of need, the authority may limit the project as
specified in the issued 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 (5)(a)(A) and (B) to obtain a certificate of need.
  (9) Nothing in this section applies to basic health services,
but basic health services do not include:
  (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 processes, 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 facilities or services and those services specified in
subsection (9) of this section.
  SECTION 11. Section 24, chapter 736, Oregon Laws 2003, as
amended by section 11, chapter 757, Oregon Laws 2005, section 12,
chapter 780, Oregon Laws 2007, and section 7 of this 2013 Act, is
amended to read:
   { +  Sec. 24. + } (1) The Long Term Care Facility Quality
Assurance Fund is established in the State Treasury, separate and
distinct from the General Fund. Interest earned by the Long Term
Care Facility Quality Assurance Fund shall be credited to the
fund.
  (2) Amounts in the Long Term Care Facility Quality Assurance
Fund are continuously appropriated to the Department of Human
Services for the purposes of paying refunds due under section 20,
chapter 736, Oregon Laws 2003, and funding long term care
facilities, as defined in section 15, chapter 736, Oregon Laws
2003, that are a part of the Oregon Medicaid reimbursement
system.
  (3) Funds in the Long Term Care Facility Quality Assurance Fund
and the matching federal financial participation under Title XIX
of the Social Security Act may be used to fund Medicaid-certified
long term care facilities using only the reimbursement
methodology described in   { - subsections (4) and (5) - }  { +
subsection (4) + } of this section to achieve a rate of
reimbursement greater than the rate in effect on June 30, 2003.
  (4) The reimbursement methodology used to make additional
payments to Medicaid-certified long term care facilities includes
but is not limited to:
  (a) Rebasing on July 1 of each year;
  (b) Continuing the use of the pediatric rate;
  (c) Continuing the use of the complex medical needs additional
payment; and
  (d) Discontinuing the use of the relationship percentage,
except when calculating the pediatric rate in paragraph (b) of
this subsection.
    { - (5) In addition to the reimbursement methodology
described in subsection (4) of this section, the department may
make additional payments of $9.75 per resident who receives
medical assistance to a long term care facility that purchased
long term care bed capacity under section 2 of this 2013 Act on
or after October 1, 2013, and on or before December 31, 2015. The
payments may be made for a period of four years from the date of
purchase.  The department may not make additional payments under
this section until the Medicaid-certified long term care facility
is found by the department to meet quality standards adopted by
the department by rule. - }
    { - (6)(a) - }  { +  (5)(a) + } The department shall
reimburse costs using the methodology described in
 { - subsections (4) and (5) - }  { +  subsection (4) + } of this
section at a rate not lower than a percentile of allowable costs
for the period for which the reimbursement is made.
  (b) For the period beginning July 1, 2013, and ending June 30,
2016, the department shall reimburse costs at a rate not lower
than the 63rd percentile of rebased allowable costs for that
period.
  (c) For each three-month period beginning on or after July 1,
2016, in which the reduction in bed capacity in
Medicaid-certified long term care facilities is less than
 { - the goal established in section 2 of this 2013 Act - }  { +
1,500 in bed capacity statewide that existed on the effective
date of this 2013 Act + }, the department shall reimburse costs
at a rate not lower than the percentile of allowable costs
according to the following schedule:
  (A) 62nd percentile for a reduction of 1,350 or more beds.
  (B) 61st percentile for a reduction of 1,200 or more beds but
less than 1,350 beds.
  (C) 60th percentile for a reduction of 1,050 or more beds but
less than 1,200 beds.
  (D) 59th percentile for a reduction of 900 or more beds but
less than 1,050 beds.
  (E) 58th percentile for a reduction of 750 or more beds but
less than 900 beds.
  (F) 57th percentile for a reduction of 600 or more beds but
less than 750 beds.
  (G) 56th percentile for a reduction of 450 or more beds but
less than 600 beds.
  (H) 55th percentile for a reduction of 300 or more beds but
less than 450 beds.
  (I) 54th percentile for a reduction of 150 or more beds but
less than 300 beds.
  (J) 53rd percentile for a reduction of 1 to 149 beds.
    { - (7) - }  { +  (6) + } A reduction in the percentile
 { + ceiling + } of allowable costs reimbursed under subsection
 { - (6) - }  { +  (5) + } of this section is not subject to ORS
410.555.

  SECTION 12.  { + (1) The amendments to section 18, chapter 736,
Oregon Laws 2003, by section 5 of this 2013 Act become operative
January 1, 2014.
  (2) The amendments to ORS 442.015 and 442.315 and section 24,
chapter 736, Oregon Laws 2003, by sections 9, 10 and 11 of this
2013 Act become operative June 30, 2020. + }
  SECTION 13.  { + Section 2 of this 2013 Act is repealed June
30, 2020. + }
  SECTION 14.  { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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