PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Amendment of section 710.1(c)(3) and (5) of Title 10 NYCRR.

Relocation of Extension Clinics.

Substitute prior limited review for administrative CON review of relocations of extension clinics within the same service area.

in the December 3, 2008 issue of the Register, I.D. No. HLT-49-08-00003-P.

No changes.

Katherine Ceroalo, DOH, Bureau of House Counsel, Regulatory Affairs Unit, Room 2438, ESP, Tower Building, Albany, NY 12237, (518) 473-7488, email: [email protected]

Statutory Authority

The authority for the proposed revision to 10 NYCRR Parts 710 is section 2803(2)(a) of the Public Health Law (PHL), which authorizes the State Hospital Review and Planning Council (SHRPC) to adopt and amend rules and regulations, subject to the approval of the Commissioner of Health, to effectuate the provisions and purposes of Article 28 of the PHL with respect to hospitals, including but not limited to, requirements for construction projects subject to Certificate of Need (CON) review.

Legislative Objectives

Article 28 of the PHL seeks to ensure that hospitals and related services are of the highest quality, efficiently provided and properly utilized at a reasonable cost. Consistent with this legislative intent, the Department seeks to focus staff effort and other resources on the analysis of CON applications where considerations of public need, financial feasibility and quality of care are most pertinent. The Department has found that Article 28 construction projects involving relocation of extension clinics and having total project costs of $3 million or less rarely involve these larger and more fundamental CON concerns. Accordingly, the proposed amendment would remove this category of projects from CON review and subject them to only prior limited review.

Current Requirements

10 NYCRR Part 710 sets forth criteria governing the types of medical facility construction projects that require CON review. These criteria relate to a variety of factors, including the nature of the service, type of equipment, change in physical plant, and increase in overall service capacity. The CON approval process governed by this section takes two forms: administrative review and full review. Both entail a determination of public need for the proposed service, as well as a review of the project's financial feasibility. Projects subject to administrative review may be approved by the Commissioner alone, while those subject to full review require prior examination by the State Hospital Review and Planning Council (SHRPC).

Section 710.1(c)(3) subjects the relocation of an extension clinic to administrative CON review. This applies regardless of the cost of the relocation (unless the cost exceeds the $10 million threshold for full review) and without respect to the distance from the current site of the extension clinic to the proposed new site. This requirement for administrative CON review also pertains even if the relocation involves no change in services or clinical capacity between the current site and the new location.

Needs and Benefits

From time to time, hospitals and diagnostic and treatment centers (D & TC) relocate extension clinics within their service areas. This often occurs as the providers seek to serve changing populations within their communities but also comes about because of matters related to building and physical plant, such as the expiration of a lease or the operator's need to convert the existing site to other uses. As more and more services are delivered on an ambulatory basis, the need for extension clinics and the periodic relocation of these community-oriented sites of service is only likely to grow. This trend will be given added impetus with the implementation of the recommendations of the Commission on Health Care Facilities in the Twenty-First Century (the Commission), many of which call for the reduction of beds and inpatient services in favor of community-oriented primary and ambulatory care.

In a rapidly changing health care system, the need to undergo administrative CON review for the simple relocation of a clinic, often involving a move of only a short distance, undermines the ability of providers to respond quickly to changing health care needs in their communities. It also often complicates situations where unforeseen circumstances require the quick vacating of an existing site (e.g., a sudden escalation in rental fees) and where the finalization of arrangements at a new site is contingent upon CON approval. The additional time required for CON review may also temporarily jeopardize access to care by local residents.

The purpose of administrative CON review of the relocation of an extension clinic is to ensure that the operation of the clinic at the new site will continue to meet a public need for the services offered; that the costs of the relocation, including any associated construction, are financially feasible; and that the physical plant at the new site complies with applicable components of the medical facilities construction code. These are important considerations. However, the Department believes that the first of these criteria need not be examined for the relocation of a clinic, when the relocation involves no increase in services or capacity; and when the relocation is proposed to occur from a location in which a significant number of the clinic's current patients reside to another such area. In these instances, the use of the clinic by area residents attests to its need. And as long as the costs of the relocation do not exceed a $3 million CON administrative review threshold, the Department believes that review for financial feasibility is not required. The Department proposes instead that these types of relocations be subject only to limited review pertaining to architectural and engineering matters. The retention of an architectural and engineering review requirement for these transactions is necessary to ensure that the new clinic site complies with applicable life safety and construction codes.

COSTS

Costs to the Department of Health

The proposed amendment would impose no new costs on the Department and would actually result in savings by eliminating the additional staff time required to process administrative review CON applications compared to applications that are subject only to prior limited review.

Costs to Other State Agencies

There are no costs to other State agencies or offices of State government.

Costs to Local Government

There are no costs to local government.

Costs to Private Regulated Parties

Because the proposed amendment imposes no new burdensome requirements, duties or responsibilities on any entity subject to Article 28 of the PHL, there are no costs to private regulated parties. The amendment will, in fact, result in savings to regulated parties by eliminating the $1,250 CON application fee associated with those projects that will no longer be subject to administrative CON review.

Local Government Mandates

The proposed amendment does not impose any new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district or other special district.

Paperwork

The proposed amendment imposes no new reporting requirements, forms or other paperwork. The amendment will actually reduce paperwork by removing the requirement for the filing of a CON application for affected projects.

Duplication

There are no relevant State or Federal rules which duplicate, overlap or conflict with the proposed amendment.

Alternatives

The Department considered requiring only a letter of notification, as provided for in section 710.1(c)(4), for the relocation of extension clinics within the same service area. However, the need to ensure that the site of the relocation complies with applicable medical facilities construction codes requires that these changes of clinic venue still be subject to some form of review. The proposed requirement for review under section 710.1(c)(5) serves this purpose.

Federal Standards

The proposed amendment does not exceed any minimum standards of the Federal government. There are no Federal rules currently addressing the CON process for the relocation of extension clinics.

Compliance Schedule

It is anticipated that the proposed amendment will be announced within one month of the effective date through the posting of an announcement on the Department of Health's Internet site.

The proposed amendment will be effective upon publication of a Notice of Adoption in the New York State Register. There is no schedule of compliance, since the proposed amendment only indicates how applications will be processed within the Department of Health.

The Department received comments from three organizations, the Greater New York Hospital Association (GNYHA), the Healthcare Association of New York State (HANYS), and Family Planning Advocates of New York State (FPA). The comments from GNYHA and HANYS were in support of the proposed rule.

Family Planning Advocates also wrote in support of the proposed rule as written but urged that the Department next consider a more nuanced definition of service area that would reflect the differences in the circumstances of health care delivery in the varied regions of the State, particularly those of rural areas.

After the filing of the revised rule, the Department would be amenable to revisiting the rule for possible further revision as suggested by FPA.

The Department received no comments in opposition to the proposed rule.