Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

In the matter of the adoption of New Rules I through XI pertaining to licensing of specialty hospitals

)

)

)

NOTICE OF ADOPTION

TO: All Concerned Persons

1. On August 9, 2012, the Department of Public Health and Human Services published MAR Notice No. 37-594 pertaining to the public hearing on the proposed adoption of the above-stated rules at page 1598 of the 2012 Montana Administrative Register, Issue Number 15.

2. The department has adopted New Rule I (37.106.801), II (37.106.802), IV (37.106.804), and VIII (37.106.810) as proposed.

3. The department has adopted the following rules as proposed with the following changes from the original proposal. Matter to be added is underlined. Matter to be deleted is interlined.

NEW RULE III (37.106.803) DEFINITIONS (1) remains as proposed.

(2) "Charity care" or "financial assistance" means free or discounted health services provided to persons who meet the organization's criteria for financial assistance and are unable to pay for all or a portion of the services ~~provision of services to those who are unable to pay~~. ~~This includes all of the under reimbursed costs of caring for low income patients who either are enrolled in a government program, such as Medicaid, or those who are uninsured, or underinsured.~~

(3) through (6) remain as proposed.

(7) "Joint venture relationship" means an express ~~or implied~~ agreement or contract between two or more parties to create the joint venture.

(8) remains as proposed.

(9) "Transfer of care" means relocating an individual to the care of another health care facility or health care provider consistent with federal transfer requirements imposed by EMTALA when an adequate continuum of care is not possible.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-101, 50-5-121, 50-5-245, 50-5-246, MCA

NEW RULE V (37.106.805) IMPACT STUDY (1) remains as proposed.

(2) The impact study process will consist of:

(a) notification of specialty hospital formation intent;

(b) public participation on impact study consultant selection and scope;

(d) impact study completion and submission; and

(e) department review and determination.

(3) The consultant selection process will include:

(a) department review of consultant qualifications;

(b) consideration of public comment on consultants; and

(4) Consultant responsibilities include:

(a) measure and analyze changes to health care access in service area; and

(b) prepare and submit report of findings.

(5) The scope of the impact study will focus on health care cost, access, and impact to existing health care facilities.

(2) through (7) remain as proposed, but are renumbered (6) through (11).

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-245, 50-5-246, MCA

NEW RULE VI (37.106.806) LICENSE APPLICATION PROCESS (1) through (1)(b) remain as proposed.

(c ) a signed transfer of care agreement with a hospital capable of providing emergency care services and acceptable continuum of care services; and

(i) through (6) remain as proposed.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-111, 50-5-201, 50-5-202, 50-5-203, 50-5-204, 50-5-207, 50-5-245, 50-5-246, MCA

NEW RULE VII (37.106.809) FACILITY TRANSFER OF CARE AGREEMENT (1) Prior to accepting patients, a specialty hospital must have in place a signed transfer of care agreement with a hospital capable of providing emergency care services appropriate to the patient's medical needs. A specialty hospital must also have written policies that result in medically appropriate transfers.

(2) remains as proposed.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-122, 50-5-245, MCA

NEW RULE IX (37.106.811) CHARITY CARE POLICY (1) and (2) remain as proposed.

(3) For any specialty hospital that has a For Profit tax status, the facility's charity care policy must be commensurate to the policies which exist for any nonprofit hospital in the ~~community~~ service area.

(4) remains as proposed.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-121, 50-5-245, MCA

NEW RULE X (37.106.812) JOINT VENTURE RELATIONSHIP REQUIREMENTS (1) remains as proposed.

(2) To qualify as a joint venture, the agreements must contain the following four elements:

(a) an express ~~or implied~~ agreement or contract creating and defining the joint venture;

(b) through (d) remain as proposed.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-245, MCA

NEW RULE XI (37.106.815) LICENSE DENIAL (1) remains as proposed.

(2) If an application for a specialty hospital is denied for any reason, the department will issue a written denial of the license, the grounds for denial, and the right of the applicant to an appeal pursuant to 50-5-208, MCA.

(3) A decision to deny an application or to impose conditions upon an applicant or licensee may be appealed by the applicant by filing a request for a hearing, in writing, to the department's Office of Fair Hearings.

(4) remains as proposed.

AUTH: 50-5-103, 50-5-245, MCA

IMP: 50-5-207, 50-5-208, 50-5-245, 50-5-246, MCA

4. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

COMMENT #1: The department received a comment indicating commenter's belief that department captured the intent of SB 446.

RESPONSE #1: The department acknowledges the comment.

COMMENT #2: A commenter recommended that the second sentence of New Rule III(2) be deleted and that the department could also reference the HFMA Principles and Practices Board Statement 15: Valuation and Financial Statement Presentation of Charity Care and Bad Debts by Institutional Healthcare Providers for additional information.

RESPONSE #2: The department agrees and is deleting the second sentence, but will not make reference to Statement 15. Instead, the department will modify the rule to more closely model IRS usage as indicated in relationship to Form 990.

COMMENT #3: A commenter recommended that New Rule III(7) be modified to define a joint venture relationship to mean "an express agreement or contract between an applicant for a specialty hospital and a hospital located in the same community to create the joint venture." Commenter does not believe an implied agreement is sufficient to meet the statutory requirement that a joint venture relationship be considered. Commenter also believes the definition should be cross referenced to New Rule X.

RESPONSE #3: The department thinks that the rule language is sufficient as it is written, but the reference to "implied" will be deleted in both New Rule III and new Rule X. New Rule X identifies the joint venture relationship requirements. Cross referencing these requirements in the definition is not appropriate.

COMMENT #4: A commenter is concerned that a specialty hospital not be allowed to transfer an individual from its hospital to an emergency room or another provider that does not provide the services required by the patient to be transferred. An example of this situation might be a surgical patient requiring a higher level of care being transferred to the emergency department of a hospital that does not offer the type of services required by the patient. Commenter also acknowledges that any hospital licensed in Montana is subject to federal EMTALA transfer requirements and recommends that the department add the statement "consistent with federal transfer requirements imposed by EMTALA" to the definition.

RESPONSE #4: The department has added the suggested language to the definition of transfer of care in New Rule III(9).

COMMENT #5: Commenter believes the department has addressed the process for the conduct of the impact study required of the applicant for a specialty hospital. Commenter recommends the department consider organizing the regulation to clarify the impact study process, the selection and responsibilities of consultants and the content of the impact study. Commenter indicates reorganizing this text will help differentiate the roles and actions of the parties involved in the process.

RESPONSE #5: The department has added additional language to clarify the rule.

COMMENT #6: Commenter recommends that the applicant submit a copy of the transfer agreement required in New Rule VII to the list of documents contained in New Rule VI(1).

RESPONSE #6: The department has added language to New Rule VI to require that the signed transfer of care agreement be submitted to the department as part of the license application process. In doing so, the specialty hospital will have the transfer agreement in place prior to accepting patients.

COMMENT #7: Commenter recommends the department add a statement at New Rule VI(3)(a) to state that provisional license may not be issued prior to the completion of the impact statement required in New Rule V. Alternatively, the department could delete the provisional license option from the rule.

RESPONSE #7: The department declines to add a statement to New Rule VI or delete the provisional license option. New Rule V(1) clearly indicates the impact study must be completed and submitted as part of the application for licensure process. Furthermore, a license would not be issued without the completion of the license application requirements identified in New Rule VI.

The provisional license option is not deleted as 50-5-203, MCA, provides for a specialty hospital temporary or provisional license through attestation.

COMMENT #8: A commenter repeats concern that the specialty hospital comply with federal EMTALA requirements, and that the transfer of care for emergency services be appropriate for the conditions arising at the specialty hospital. Commenter recommends the department add the phrase "appropriate to the patient's medical needs" to the end of the first sentence in New Rule VII(1).

RESPONSE #8: The department has added the suggested language to New Rule VII(1).

COMMENT #9: A commenter supports the language proposed to address the requirement for a charity care policy consistent with other hospitals with one exception. The department uses the term "community" in the rule. The commenter is concerned that the term "community" could be construed to mean the city limits or other geographic expression that excludes existing hospitals from consideration of the policy. Commenter recommends using the term "service area" in place of "community" in the rule.

RESPONSE #9: The department has utilized the suggested language in New Rule IX(3).

COMMENT #10: A commenter believes the conditions to mitigate impacts on applicant and the potential approval of a specialty hospital license should carry appeal rights for other interested parties. Existing hospitals or members of the public may not agree with mitigating conditions imposed upon an applicant. The objection may include that recommended mitigating conditions are not approved by the department, or that an application is approved.

The commenter recommends the department either modify the rule to include more broadly stated appeal rights, or elsewhere in the rule provide information about appeal rights of the department's administrative decisions available to other concerned parties.

RESPONSE #10: The department disagrees with the comment and will modify the rule to clarify the applicant may appeal the department's decision. Opportunity for the public to comment is provided prior to the specialty license application process. Comments received during the impact study preparation process will be considered by the department when rendering a decision on specialty hospital licensing and mitigation of adverse community impacts. The specialty hospital applicant or license applicant is afforded appeal rights through the department. Other aggrieved parties may appeal the decision through the courts.

/s/ John Koch /s/ Wendy Nicolai, Acting Director

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State January 7, 2013