RD60 - 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 2004).

Program activity for the period covered in this report includes the issuance of 98 decisions. The State Health Commissioner authorized 89 projects with a total expenditure of $981,180,725 and denied 9 projects with proposed capital expenditures of $32,947,407. 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: medical rehabilitation services, long-term care hospitals, nursing home services, and mental retardation facilities. The section on project analysis addresses the history of COPN regulation for these project categories, the nature of the specific services, the current state of the service in the Commonwealth 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 and request for application process as it has been used in the regulation of nursing homes and nursing home beds. VDH recommends initiating a request for application-like process similar to that used for the regulation of nursing homes for medical rehabilitation services and long-term care hospitals. Finally, VDH recommends completing the partial deregulation of intermediate care facilities for mental retardation initiated in 2004.

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 indigent care placed upon any COPNs they are awarded. Compliance with the conditions to provide indigent care remains relatively poor. Historically, 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. 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. A guidance document was issued to clarify the conditioning process and provide definition to the elements of a condition. These initiatives helped remove the barriers to compliance most often cited by facility managers as their reason for failing to satisfy indigent care conditions. Sufficient time has not passed since the publication of the guidance document for there to have been any positive effects realized.

During FY 04 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.