RD50 - Annual Report on the Status of Virginia's Medical Care Facilities Certificate of Public Need Program


Executive Summary:
This annual report to the Governor and the General Assembly of Virginia on the status of Virginia’s Certificate of Public Need (COPN) program has been developed pursuant to § 32.1-102.12 of the Code of Virginia. The report is required to address the activities of the program in the previous fiscal year; review the appropriateness of continued regulation of at least three specific project categories; and to discuss the issues of access to care by the indigent, quality of care within the context of the program, and health care market reform. A copy of the enabling Code section is reproduced at Appendix A. This report includes data for the most recent fiscal year (FY 2003).

Program activity for the period covered in this report includes the issuance of 71 decisions. The State Health Commissioner authorized 64 projects with a total expenditure of $480,603,871 and denied 7 projects with proposed capital expenditures of $94,309,996. Appendix D summarizes the authorization decisions. Additional program activities are described in the “Summary of the State Health Commissioner’s Actions” beginning on page 1.

The following project categories are analyzed in this report: Establishment of a specialized center or clinic or that portion of a physician’s office developed for the provision of computed tomography (CT), Introduction by an existing medical care facility of any new CT service, Addition or replacement by an existing medical care facility of CT equipment, Establishment of a specialized center or clinic or that portion of a physician’s office developed for the provision of magnetic resonance imaging (MRI), Introduction by an existing medical care facility of any new MRI service, Addition or replacement by an existing medical care facility of MRI equipment, Establishment of a specialized center or clinic or that portion of a physician’s office developed for the provision of magnetic source imaging (MSI), Introduction by an existing medical care facility of any new MSI service, Addition or replacement by an existing medical care facility of MSI equipment, Establishment of a specialized center or clinic or that portion of a physician’s office developed for the provision of nuclear medicine imaging, Introduction by an existing medical care facility of any new nuclear medicine imaging service, Establishment of a specialized center or clinic or that portion of a physician’s office developed for the provision of positron emission tomography (PET), Introduction by an existing medical care facility of any new PET service, Addition or replacement by an existing medical care facility of PET equipment.

The section on project analysis addresses the history of COPN regulation for these project categories, the nature of the specific services, and three potential options for the future of each of the categories with a recommended action.

The Virginia Department of Health (VDH) recommends continuing to employ the COPN program as it has been used in the regulation of computed tomography, magnetic resonance imaging, positron emission Tomography and magnetic source imaging. VDH recommends completing the partial deregulation of nuclear medicine imaging initiated in 2000.

Compliance with the conditions to provide indigent care remains relatively poor. Many conditioned COPN holders have either not reported their compliance with conditions or have reported that they have been unable, for various reasons, to reach the required level of indigent care. Applicants that have not demonstrated a historical commitment to charity care, consistent with other providers in their health service area, may have a “condition” to provide some level of charity care placed upon any COPNs they are awarded. Language for the “conditioning” of COPNs is now being augmented to include the second type of condition allowed in the Code, namely that the applicant facilitate access through the development and operation of primary health care services for special populations. This removes the barrier to compliance most often cited by facility managers as their reason for failing to satisfy indigent care conditions.

During FY 03 the application review process was completed as directed by the Code. There were no delays in receiving recommendations from regional health planning agencies that adversely affected timely decision making. This year one request reviewed by a regional health planning agency and VDH staff was automatically deemed approved when the court determined that no decision had been made and the statutory time limit on review was exceeded.