Section 701. Certificate of need required; clinically related health services subject to review.
(a) Any person, including, but not limited to, a health care facility, health maintenance organization or health care provider who offers, develops, constructs, renovates, expands or otherwise establishes or undertakes to establish within the State a clinically related health service that is included in the department's list of reviewable services developed under subsections (d) and (e) or a health care facility as defined in section 103 must obtain a certificate of need from the department if one or more of the following factors applies:
(1) The proposal requires a capital expenditure in excess of $2,000,000 under generally accepted accounting principles, consistently applied.
(2) The proposal involves the establishment of a health care facility or a reviewable clinically related health service.
(3) The proposal increases the number of licensed beds by more than ten beds or 10%, whichever is less, every two years.
(i) If the additional beds are acute care beds and are not beds in a distinct-part psychiatric, rehabilitation or long-term care unit, all licensed beds of the acute-care facility shall be counted in determining whether the increased number of beds exceeds 10%.
(ii) If the additional beds are beds in a distinct-part psychiatric, rehabilitation or long-term care unit of an acute care facility, only the beds within that unit shall be counted in determining whether the increased number of beds exceeds 10%.
(iii) If the additional beds are in a freestanding psychiatric, rehabilitation or long-term care facility, all licensed beds of the freestanding facility shall be counted in determining whether the increased number of beds exceeds 10%.
(4) The proposal substantially expands an existing clinically related health service as determined by the department in the State health services plan.
(b) For the purposes of this act, an expenditure for the purpose of acquiring an existing health care facility or replacement of equipment where there is no change in service shall not be considered to be a capital expenditure subject to review. Expenditures for nonclinical activities or services, such as parking garages, computer systems or refinancing of debt, and research projects involving premarket approval of new equipment shall not be subject to review.
(c) The capital expenditure threshold identified in subsection (a)(1) may be modified periodically by the department to reflect any increase in the construction cost or other factors influencing health care-related capital expenditures. The department shall publish a modification of the expenditure threshold through the regulatory review process.
(d) A list of reviewable clinically related health services shall be published by the department within 30 days of the effective date of this act and may be modified by regulation on an annual basis. Exclusive of new high-cost technology, the initial list published by the department as required under this subsection shall be no more extensive than those services reviewable on the effective date of this act. Criteria for inclusion of reviewable services shall include, but not be limited to:
(1) the quality of the service to be offered is likely to be compromised through insufficient volumes or utilization;
(2) the service is dependent upon the availability of scarce natural resources such as human organs;
(3) the operating costs associated with the service are reimbursed by major third party payors on a cost reimbursement basis; or
(4) the service involves the use of new technology.
(e) Any changes to the list required under subsection (d) and proposed by regulation shall be developed by the department after consultation with the policy board.
(f) A facility providing treatment solely on the basis of prayer or spiritual means in accordance with the tenets of any church or religious denomination or a facility conducted by a religious organization for the purpose of providing health care services exclusively to clergy or other persons in a religious profession who are members of the religious denomination conducting the facility shall not be considered to constitute a health service subject to review under this act.
(g) As used in this section, "new high-cost technology" means new technological equipment with an aggregate purchase cost of greater than $500,000. The department shall consult with national medical and surgical speciality organizations recognized by the American Board of Medical Specialities (ABMS) and other nationally recognized scientific resources in the determination of what constitutes new technological equipment.
(701 amended Dec. 18, 1992, P.L.1602, No.179)