Within 12VAC5-230-610 the Department of Medical Assistance Services (DMAS) has concerns with the following proposed amendment:

Exception: When there are facilities that have been in operation less than three years one year in the health-planning district, their occupancy can shall be excluded from the calculation of average occupancy if the facilities had an annual occupancy of at least 93% in one of its first three years of operation.

The Department is concerned with the change from permissive to mandatory language. DMAS believes this change will cause an unintended and undesired consequence. When two or more facilities apply for a certificate of public need (COPN) and the certificate is only issued to one facility, the other applicant(s) could simply wait and reapply for a certificate. The occupancy of the facility that was issued a certificate would be excluded from the calculation, which means the newly built facility would not have had a chance to ramp up to meet the previously identified need. This would allow a calculated identified need to stand for two application periods. During the second application period, the certificate that was issued to meet the need would not be taken into account.

DMAS suggests changing the language in the following manner:

Exception: When there are facilities that have been in operation less than three years one year in the health planning district, their occupancy [can shall] be excluded from the calculation of average occupancy if the facilities had an annual occupancy of at least 93% in one of its first three years of operation.

Allowing the exception to be permissive once again.