August 6, 2009

The Illinois General Assembly recently passed Public Act 96-0031 to address the expiration of the Illinois Health Facilities Planning Act on July 1, 2009. Signed by the Governor on June 30, the new act will significantly affect the Certificate of Need process.

For starters, the act charges the Illinois Department of Public Health with creating the new Center for Comprehensive Health Planning, which will establish a statewide Comprehensive Health Plan and provide technical assistance to the Certificate of Need process. The Comprehensive Health Plan will assess existing community resources and determine health care needs; support safety net services for uninsured and underinsured residents; promote adequate financing for health care services; and recognize and respond to changes in community health care needs. Developed with a perspective of five to 10 years, the Comprehensive Health Plan will be updated at least every other year, or annually if necessary. The Certificate of Need review board must apply the findings of the Comprehensive Health Plan in its evaluation and review of Certificate of Need applications.

The act also provides for a major overhaul of the Certificate of Need process by amending the Illinois Health Facilities Planning Act. The existing Certificate of Need review board will be replaced by the Health Facilities and Services Review Board. Beginning in March 2010, the new board will have nine voting members who are appointed by the Governor of Illinois. All members must be residents of Illinois and four must live outside of the Chicago metropolitan statistical area. At least five of the members must be knowledgeable about health care delivery systems, health systems planning, finance or management of health care facilities. One member must be a representative of a non-profit health care consumer advocacy organization. The act further requires that the existing Certificate of Need review board establish a plan to transition its powers and duties to the newly created Health Facilities and Services Review Board. A Certificate of Need application will require the positive vote of five members of the new board.

Additionally, the act expands the definition of "health care facilities" that are subject to the Certificate of Need process. That definition now includes (i) an institution, place, building or room used for the provision of a health care category of services as defined by the board, including, but not limited to, cardiac catheterization and open heart surgery and (ii) an institution, place, building or room used for the provision of major medical equipment used in the direct clinical diagnosis or treatment of patients, and whose project cost is in excess of the capital expenditure minimum.

The capital expenditure minimums were also revised by the act, effective immediately. The new thresholds are as follows: for hospital applicants, $11,500,000; for skilled and intermediate long-term care facilities, $6,500,000; and for all other applicants, $3,000,000. Skilled and long-term care applicants should note that their new capital expenditure minimum is actually a decrease from the previous threshold of $8,850,717. The threshold of $3,000,000 is also a new minimum for the "all other applicants" category, which was previously subject to the same $8,850,717 threshold.

With the exception of skilled and intermediate long-term care facilities, all Certificate of Need applicants must provide a Safety Net Impact Statement when there is a substantive application or when they propose to discontinue a category of service. This document must address the impact that a proposed project will have on the "safety net services" in a community, which are defined in the act. As part of the Safety Net Impact Statement, an applicant will have to disclose the amount of charity care provided for the previous three fiscal years.

The act also establishes the Health Services Review Board Long-Term Care Facility Advisory Subcommittee to develop and recommend rules to the board. This subcommittee is charged with studying new approaches to the bed need formula, setting boundaries for the Health Service Areas in Illinois, and encouraging flexibility and innovation in design models. The new rules to be recommended by this subcommittee are to be filed by September 1, 2010.

Now that Public Act 96-0031 has been signed by the Governor, it will clearly affect Certificate of Need applications in the months ahead. If you are planning a project that may be subject to the new act or need to determine how its provisions apply to a new project, please contact your Much Shelist attorney.

This article contains material of general interest and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Under applicable rules of professional conduct, this content may be regarded as attorney advertising.