June 30, 2017
Erik Bodin
Director, Office of Licensure and Certification
Virginia Department of Health
9960 Mayland Drive, Suite 401
Henrico, Virginia 23233
RE: Public Comment for Periodic Review of 12 VAC 5-230
Dear Mr. Bodin,
Thank you for the opportunity to comment on the Virginia Board of Health periodic review and small business impact review of 12 VAC 5-230, State Medical Facilities Plan (“SMFP”). As discussed in greater detail below, the Virginia Hospital & Healthcare Association (VHHA) submits that this regulation should be retained and has provided suggestions for how the regulation could be further improved.
The SMFP is the planning document adopted by the Board of Health that establishes, among other things: (i) methodologies for projecting need for medical care facility beds and services; (ii) statistical information on the availability of medical care facilities and services; and (iii) procedures, criteria, and standards for review of project applications for medical care facilities and services. Va. Code § 32.1-102.1.
The SMFP regulations are necessary for the economical performance of important governmental functions and to protect the public health and safety in several ways, such as:
In the absence of SMFP regulations to ensure the appropriate distribution and proliferation of medical care facilities, services could cluster around areas with high population, high income, and high rates of commercial insurance. At the same time those smaller communities, rural settings, and inner cities could suffer the negative effects of reduced access to services or increased drive times to access care. Proliferation of highly profitable services within competitive markets poses a threat to the ability of existing community providers to financially sustain their operations and continue to provide access to essential health care services not provided elsewhere in the region.
Furthermore, many of the more complex medical services that are regulated by Certificate of Public Need (“COPN”) rely on a well-trained and technically competent workforce of physicians, nurses, and other support staff. To recruit providers and maintain these skills, a certain volume of procedures is necessary in order to provide proficiency, quality, and cost-efficient delivery of care. The SMFP regulations help to achieve this goal.
In short, the SMFP regulations play an important role in ensuring sound health planning for the Commonwealth. While the SMFP regulations are critical to advancing important policy goals, the SFMP regulations have not been timely updated as required by state law and as necessary to ensure efficient and economical performance of the COPN program.
Virginia Code Section 32.1-102.2:1 requires the Board of Health to appoint and convene a task force to meet at least once every two (2) years and complete a review of the SMFP, updating or validating existing criteria in the SMFP at least every four (4) years. Pursuant to this law, the SMFP was due for an update or validation in 2013; however, the SMFP has not been amended since 2009.
The lack of regular reviews and revisions to the SMFP can undermine the effectiveness and economical performance of the COPN law. If the SMFP provisions are outdated and not reflective of current standards and market conditions, they could create an unreliable basis for COPN project analysts, hearing officers, and the Commissioner to establish COPN recommendations and decisions. Furthermore, this could result in the need for more discretion and variation in decision making under the COPN program, which can lead to less consistency in decisions overall.
It is further submitted that the structure and content of the SMFP should be revised to make it more robust, objective, and data-driven. A SMFP with more specific definitions and formulas for determining need, utilization data, and service expansion requirements would help to minimize the amount of discretion required in agency and hearing officer recommendations and Commissioner decisions and better ensure that markets remain competitive and offer sufficient alternatives in accessing services.
An additional suggestion is that the SMFP should relate to, and be aligned with, broader health planning and health policy data and issues for the Commonwealth. The State Health Improvement Plan was developed by the Virginia Department of Health in conjunction with a wide range of public and private sector stakeholders. The SMFP should be integrated with, or at least take into consideration, the State Health Improvement Plan. By articulating how facilities, health care services, and medical equipment planning fits into the Commissioner’s overall plan, hospitals and other medical care facilities can better plan for changes and updates to their individual facility plans.
Limiting economic impact is particularly important for small businesses that comprise a significant percentage of the workforce, yet have fewer employees and tend to be located in rural and medically underserved areas. The SMFP regulations limit the economic impact on small businesses by allowing them to make a reasonable determination, in advance, of the feasibility of obtaining approval of a COPN application. The detailed methodologies for projecting need for medical care facility beds and services, statistical information used to determine the availability of medical care facilities and services, and criteria and standards for review of applications for projects for medical care facilities and services included in the SMFP regulations are intended to provide objective information for such determinations. It is noted that the Commissioner is granted authority to waive SMFP requirements that are not relevant to a rural locality's needs or are inaccurate, outdated, inadequate, or otherwise inapplicable. 12 VAC 5-220-270(A). This provides some flexibility for all applicants, including small businesses, that might otherwise be deterred from pursuing approval of a COPN application based solely upon criteria or standards included in the SMFP.
Generally speaking, the SMFP regulations are concise, clearly written and easily understandable. The COPN review process is fairly complex and detail-oriented, yet the review standards and criteria contained in the SMFP are based on objective measures of service utilization and access to the service by the population within a region or planning district and are organized distinctly by project or medical care facility type. The criteria also typically distinguish between the need to establish a new facility or service, and the need to expand an existing facility or service.
Lastly, we note that in 2015, VHHA developed a series of recommendations for COPN process improvements. With limited exceptions, those recommendations were consistent with similar recommendations coming out of the 2016 COPN Workgroup established by Secretary of Health and Human Resources William A. Hazel, Jr., M.D. pursuant to Item 278D of the 2015 Appropriation Act. Implementing many of these recommendations would require not only changes to the COPN and SMFP regulations, but corresponding changes to the related statutory authority as well. Accordingly, we are not repeating those recommendations here. Outside of this regulatory review process, VHHA continues to support efforts to streamline the COPN process and improve transparency, accountability, and uniformity in COPN review consistent with those previous recommendations. With respect to the SMFP, this would include: making more timely and frequent updates to the SMFP; making the SMFP more robust, objective, and data-driven; and aligning the SMFP with the State Health Improvement Plan.
Thank you again for this opportunity to comment.
Sincerely,
R. Brent Rawlings
Vice President & General Counsel
