GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 889

Short Title:  CON/Nonprofit Nursing Home Repeal.	(Public)
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Sponsors: Representatives Holt; P. Wilson and Wood.
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Referred to:  Human Resources.
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March 27, 1989

A BILL TO BE ENTITLED
AN ACT TO REMOVE THE CERTIFICATE OF NEED REQUIREMENTS FROM NONPROFIT NURSING HOMES.
The General Assembly of North Carolina enacts:
Section 1.  G.S.131E-176 reads as rewritten:
"§ 131E-176.  Definitions.
As used in this Article, unless the context clearly requires otherwise, the following terms have the meanings specified:
(1)	‘Ambulatory surgical facility' means a facility designed for the provision of an ambulatory surgical program. An ambulatory surgical facility serves patients who require local, regional or general anesthesia and a period of post-operative observation. An ambulatory surgical facility may only admit patients for a period of less than 24 hours and must provide at least one designated operating room and at least one designated recovery room, have available the necessary equipment and trained personnel to handle emergencies, provide adequate quality assurance and assessment by an evaluation and review committee, and maintain adequate medical records for each patient. An ambulatory surgical facility may be operated as a part of a physician or dentist's office, provided the facility is licensed under G.S. Chapter 131E, Article 6, Part D, but the performance of incidental, limited ambulatory surgical procedures which do not constitute an ambulatory surgical program as defined in subdivision (1a) and which are performed in a physician's or dentist's office does not make that office an ambulatory surgical facility.
(1a)	‘Ambulatory surgical program' means a formal program for providing on a same-day basis those surgical procedures which require local, regional or general anesthesia and a period of post-operative observation to patients whose admission for more than 24 hours is determined, prior to surgery, to be medically unnecessary.
(2)	‘Bed capacity' means space used exclusively for inpatient care, including space designed or remodeled for licensed inpatient beds even though temporarily not used for such purposes. The number of beds to be counted in any patient room shall be the maximum number for which adequate square footage is provided as established by rules of the Department except that single beds in single rooms are counted even if the room contains inadequate square footage.  The term ‘bed capacity' also refers to the number of dialysis stations in kidney disease treatment centers, including freestanding dialysis units.
(2a)	‘Capital expenditure' means an expenditure which under generally accepted accounting principles is not properly chargeable as an expense of operation and maintenance.
(3)	‘Certificate of need' means a written order of the Department setting forth the affirmative findings that a proposed project sufficiently satisfies the plans, standards, and criteria prescribed for such projects by this Article and by rules of the Department as provided in G.S. 131E-183(a) and which affords the person so designated as the legal proponent of the proposed project the opportunity to proceed with the development of such project.
(4)	‘Certified cost estimate' means an estimate of the total cost of a project certified by the proponent of the project within 60 days prior to or subsequent to the date of submission of the proposed new institutional health service to the Department and which is based on:
a.	Preliminary plans and specifications;
b.	Estimates of the cost of equipment certified by the manufacturer or vendor; and
c.	Estimates of the cost of management and administration of the project.
(5)	‘Change in bed capacity' means (i) any relocation of health service facility beds, or dialysis stations from one licensed facility or campus to another, or (ii) any redistribution of health service facility bed capacity among the categories of health service facility bed as defined in G.S. 131E-176 (9c), or (iii) any increase in the number of health service facility beds, or dialysis stations in kidney disease treatment centers, including freestanding dialysis units.
(5a)	‘Chemical dependency treatment facility' means a public or private facility, or unit in a facility, which is engaged in providing 24-hour a day treatment for chemical dependency or substance abuse. This treatment may include detoxification, administration of a therapeutic regimen for the treatment of chemically dependent or substance abusing persons and related services. The facility or unit may be:
a.	A unit within a general hospital or an attached or freestanding unit of a general hospital licensed under Article 5, Chapter 131E, of the General Statutes,
b. 	A unit within a psychiatric hospital or an attached or freestanding unit of a psychiatric hospital licensed under Article 1A of General Statutes Chapter 122 or Article 2 of General Statutes Chapter 122C,
c. 	A freestanding facility specializing in treatment of persons who are substance abusers or chemically dependent licensed under Article 1A of General Statutes Chapter 122 or Article 2 of General Statutes Chapter 122C; and may be identified as ‘chemical dependency, substance abuse, alcoholism, or drug abuse treatment units,' ‘residential chemical dependency, substance abuse, alcoholism or drug abuse facilities,' ‘social setting detoxification facilities' and ‘medical detoxification facilities,' or by other names if the purpose is to provide treatment of chemically dependent or substance abusing persons, but shall not include halfway houses or recovery farms.
(5b)	‘Chemical dependency treatment beds' means beds that are licensed for detoxification or for the inpatient treatment of chemical dependency. Residential treatment beds for the treatment of chemical dependency or substance abuse are chemical dependency treatment beds but those residential treatment beds that were developed and operated without a certificate of need shall not be counted in the inventory of chemical dependency treatment beds in the State Health Plans prepared by the Department pursuant to G.S. 131E-177(4) after July 1, 1987. The State Health Plans prepared after July 1, 1987, shall also contain no limitation on the proportion of the overall inventory of chemical dependency treatment beds located in any of the types of chemical dependency treatment facilities identified in subdivision (5a).
(6)	‘Department' means the North Carolina Department of Human Resources.
(7)	To ‘develop' when used in connection with health services, means to undertake those activities which will result in the offering of institutional health service not provided in the previous 12-month reporting period or the incurring of a financial obligation in relation to the offering of such a service.
(8),	(9) Repealed by Session Laws 1987, c. 511, s. 1.
(9a)	‘Health service' means an organized, interrelated medical, diagnostic, therapeutic, and/or rehabilitative activity that is integral to the clinical management of a sick, injured, or disabled person.  ‘Health service' does not include administrative and other activities that are not integral to clinical management.
(9b)	‘Health service facility' means a hospital; psychiatric facility; rehabilitation facility; for-profit long term care facility; kidney disease treatment center, including freestanding hemodialysis units; intermediate care facility for the mentally retarded; home health agency; chemical dependency treatment facility; and ambulatory surgical facility.
(9c)	‘Health service facility bed' means a bed licensed for use in a health service facility in the categories of (i) acute care beds; (ii) psychiatric beds; (iii) rehabilitation beds; (iv) intermediate nursing care or skilled nursing care beds in for-profit facilites; (v) intermediate care beds for the mentally retarded; and (vi) chemical dependency treatment beds.
(10)	‘Health maintenance organization (HMO)' means a public or private organization which has received its certificate of authority under Chapter 57B of the General Statutes and which either is a qualified health maintenance organization under Section 1310(d) of the Public Health Service Act or:
a.	Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: usual physician services, hospitalization, laboratory, X ray, emergency and preventive services, and out-of-area coverage;
b.	Is compensated, except for copayments, for the provision of the basic health care services listed above to enrolled participants by a payment which is paid on a periodic basis without regard to the date the health care services are provided and which is fixed without regard to the frequency, extent, or kind of health service actually provided; and
c.	Provides physicians' services primarily (i) directly through physicians who are either employees or partners of such organizations, or (ii) through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice basis.
(11)	‘Health systems agency' means an independent, private, nonprofit corporation, incorporated in this State, that engages in regional health planning and development functions.
(12)	‘Home health agency' means a private organization or public agency, whether owned or operated by one or more persons or legal entities, which furnishes or offers to furnish home health services.
	‘Home health services' means items and services furnished to an individual by a home health agency, or by others under arrangements with such others made by the agency, on a visiting basis, and except for paragraph e. of this subdivision, in a place of temporary or permanent residence used as the individual's home as follows:
a.	Part-time or intermittent nursing care provided by or under the supervision of a registered nurse;
b.	Physical, occupational or speech therapy;
c.	Medical social services, home health aid services, and other therapeutic services;
d.	Medical supplies, other than drugs and biologicals and the use of medical appliances;
e.	Any of the foregoing items and services which are provided on an outpatient basis under arrangements made by the home health agency at a hospital or nursing home facility or rehabilitation center and the furnishing of which involves the use of equipment of such a nature that the items and services cannot readily be made available to the individual in his home, or which are furnished at such facility while he is there to receive any such item or service, but not including transportation of the individual in connection with any such item or service.
(13)	‘Hospital' means a public or private institution which is primarily engaged in providing to inpatients, by or under supervision of physicians, diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or rehabilitation services for the rehabilitation of injured, disabled, or sick persons. The term includes all facilities licensed pursuant to G.S. 131E-77 of the General Statutes.
(13a)	‘Hospice' means any coordinated program of home care with provision for inpatient care for terminally ill patients and their families. This care is provided by a medically directed interdisciplinary team, directly or through an agreement under the direction of an identifiable hospice administration. A hospice program of care provides palliative and supportive medical and other health services to meet the physical, psychological, social, spiritual and special needs of patients and their families, which are experienced during the final stages of terminal illness and during dying and bereavement.
(14)	Repealed by Session Laws 1987, c. 511, s. 1, effective July 1, 1987.
(14a)	‘Intermediate care facility for the mentally retarded' means facilities licensed pursuant to Article 2 of Chapter 122C of the General Statutes for the purpose of providing health and habilitative services based on the developmental model and principles of normalization for persons with mental retardation, autism, cerebral palsy, epilepsy or related conditions.
(14b)	" Intermediate nursing care”means the provision of for-profit health-related care and services on a regular basis to individuals who do not require the degree of care and treatment that hospitals or skilled nursing care provide, but who because of their mental or physical condition require health-related care and services above the level of room and board.
(14c)	" Long term care facility”means a for-profit health service facility whose bed complement of health service facility beds is composed principally of skilled nursing beds or intermediate nursing care beds, or both.
(15)	Repealed by Session Laws 1987, c. 511, s. 1.
(16)	‘New institutional health services' means:
a.	The construction, development, or other establishment of a new health service facility;
b.	The obligation by any person of any capital expenditure on behalf of or for a health service facility as defined in subsection(9b) of this section exceeding two million dollars ($2,000,000), other than one to acquire an existing health service facility or to replace such a facility destroyed or irreparably damaged by accident or natural disaster.  The cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities, including staff effort and consulting and other services, essential to the acquisition, improvement, expansion, or replacement of any plant or equipment with respect to which an expenditure is made shall be included in determining if the expenditure exceeds two million dollars ($2,000,000);
c.	Any change in bed capacity as defined in G.S.131E-176(5);
d.	The offering of dialysis services or home health services by or on behalf of a health service facility if those services were not offered within the previous 12 months by or on behalf of the facility;
e.	A change in a project that was subject to certificate of need review and for which a certificate of need was issued, if the change is proposed during the development of the project or within one year after the project was completed.  For purposes of this subdivision, a change in a project is a change of more than fifteen percent (15%) of the approved capital expenditure amount or the addition of a health service that is to be located in the facility, or portion thereof, that was constructed or developed in the project;
f.	The offering of a health service by or on behalf of a health service facility if the service was not offered by or on behalf of the health service facility in the previous 12 months and if the annual operating costs of the service equal or exceed one million dollars ($1,000,000), or the expansion of an existing health service when an annual operating cost of one million dollars ($1,000,000) is directly associated with the offering of the expanded portion of the service;
g.	to k. Repealed by Session Laws 1987, c. 511, s. 1.
l.	The purchase, lease, or acquisition of any health service facility, or portion thereof, or a controlling interest in the health service facility or portion thereof, if the health service facility was developed under a certificate of need issued pursuant to G.S. 131E-180;
	m.	Any conversion of nonhealth service facility beds to health service facility beds;
n.	The construction, development, or other establishment of a hospice if the operating budget thereof is in excess of one hundred thousand dollars ($100,000).
(17)	‘North Carolina State Health Coordinating Council' means the Council that prepares, with the Department of Human Resources, the State Medical Facilities Plan, a component of the State Health Plan.
(18)	To ‘offer,' when used in connection with health services, means that the health service facility or health maintenance organization holds itself out as capable of providing, or as having the means for the provision of, specified health services.
(19)	‘Person' means an individual, a trust or estate, a partnership, a corporation, including associations, joint stock companies, and insurance companies; the State, or a political subdivision or agency or instrumentality of the State.
(20)	‘Project' or ‘capital expenditure project' means a proposal to undertake a capital expenditure that results in the offering of a new institutional health service as defined by this Article. A project, or capital expenditure project, or proposed project may refer to the project from its earliest planning stages up through the point at which the specified new institutional health service may be offered. In the case of facility construction, the point at which the new institutional health service may be offered must take place after the facility is capable of being fully licensed and operated for its intended use, and at that time it shall be considered a health service facility.
(21)	‘Psychiatric facility' means a public or private facility licensed pursuant to Article 2 of Chapter 122C of the General Statutes and which is primarily engaged in providing to inpatients, by or under the supervision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons.
(22)	‘Rehabilitation facility' means a public or private inpatient facility which is operated for the primary purpose of assisting in the rehabilitation of disabled persons through an integrated program of medical and other services which are provided under competent, professional supervision.
(23)	" Skilled nursing care”means the provision of that degree of for-profit care to inpatients who require medical or nursing care, or rehabilitation services for the rehabilitation of injured, disabled, or sick persons.
(24)	‘State Health Plan' means the plan prepared by the Department of Human Resources and the North Carolina State Health Coordinating Council and approved by the Governor.
(25)	‘State Medical Facilities Plan' means a component of the State Health Plan prepared by the Department of Human Resources and the North Carolina State Health Coordinating Council, and approved by the Governor.
(26)	Repealed by Session Laws 1983 (Regular Session, 1984), c.1002, s. 9.
(27)	Repealed by Session Laws 1987, c. 511, s.1.”
Sec. 2.  This act shall become effective October 1, 1989.