Current through November 28, 2024
(a) In determining the amount of an
expenditure for an activity under
AS
18.07.031(a), a person shall
include the cost for one, or a combination of two or more, of the following
components, as applicable:
(2) construction,
demolition, or remodeling of a building;
(3) other site or facility
development;
(4) purchase of
equipment, a building, or other property;
(5) purchase of land that is to be used for
the health care facility; the value of land purchased for future development of
the facility will be considered at the time the future development is to occur,
if the
(A) future development requires a
certificate of need; and
(B) value
of the land was not included in a previous certificate of need issued under
this chapter for the facility;
(6) the value of land that is owned by the
applicant and that is to be used for the health care facility, based on the
value of the land at acquisition or the current appraised value of the land
after deducting the cost of the appraisal, whichever value is less; the
provisions of this paragraph do not apply
(A)
to an expenditure that involves only remodeling of an existing facility unless
the remodeling includes an expansion of the facility; or
(B) if the value of the land was included in
a previous certificate of need issued under this chapter for the
facility;
(7) the value
of space that is owned by the applicant and that is to be used for the health
care facility, based on the value of the square footage of the space if it were
leased, using the average current market rate for similar space leased in the
proposed service area or comparable space in a comparable service area; the
provisions of this paragraph do not apply to an expenditure that involves only
remodeling of an existing facility unless the remodeling includes an expansion
of the facility;
(8) leasing of
equipment or space occupied by the facility, based on
(A) the net present value of the lease; for
purposes of this subparagraph, "net present value" means the total lease
payments over the useful life of the asset, less the existing age of the asset,
as set out in the 2008 edition of
Estimated Useful Lives of Depreciable
Hospital Assets,published by the American Hospital Association and
adopted by reference;
(B) the total
cost of any leasehold improvements; and
(C) the total cost of any fixtures or
equipment purchased or leased without regard to depreciation;
(9) undertakings essential to a
component listed in this subsection; those items include
(A) studies, surveys, designs, plans, working
drawings, site acquisitions and preparation, financing costs, research,
training, and consultant costs; and
(B) for purchase of equipment, the cost of
shipping and installation in addition to undertakings listed in (A) of this
paragraph;
(10)
donations in kind or transfers to a health care facility, including land,
buildings, equipment, furnishings, and fixtures, which if acquired directly by
the facility would be included as an expenditure, valued at the fair market
value of the asset at the time of its donation or transfer.
(b) For an expansion of an
existing facility, only the value of the land that will be used for the
expansion will be considered an expenditure.
(c) For purposes of determining whether
AS
18.07.031(a) and this
section apply to a specific activity, the expenditure of more than one person
for the same activity will be considered the expenditure of the person
conducting the activity.
(e) For the
purposes of determining whether
AS
18.07.031(a) applies to a
specific activity, the department will exclude an expenditure for a nonclinical
purpose if
(1) the sponsor of the activity is
an enrolled Medicaid provider, and that expenditure is not included in the
Medicaid prospective payment rate methodology under 7 AAC 150; and
(2) the applicant submits information to the
department that explains to the satisfaction of the department
(A) the purpose of the expenditure;
(B) how the expenditure is for a nonclinical
purpose only; and
(C) the total
project cost for all expenditures for nonclinical purposes.
(f) The acquisition of
land previously excluded as an expenditure for a nonclinical purpose under this
section is not an excluded expenditure for the purposes of determining whether
AS
18.07.031(a) applies to a
specific activity if the facility seeks to develop that land for an activity
subject to a certificate of need under AS 18.07.
(g) In (a)(6) of this section, the department
will consider land to be used for the health care facility as land occupied by
the building where the health care facility is located, and land or space used
in support of the facility. The department will include outbuildings related to
maintenance and other facility operations, recreation areas, and parking areas
as part of the land.
(h) In this
section,
(1) "excavation" means the digging
out or removal of materials;
(2)
"expenditure for a nonclinical purpose"
(A)
means an expenditure for an item that is not directly related to the provision
of clinical services;
(B) includes
an expenditure for a parking lot, garage, information and communication system,
physician and administrative office space, acquisition of land for a
nonclinical purpose, and the acquisition and replacement of nonmedical
equipment;
(3) "fixture"
(A) means an article that is permanently
resting on, permanently affixed to, or permanently attached by cement, plaster,
nails, bolts, screws, or other means to a building;
(B) includes cabinets, counters, sprinkler
systems, window air conditioning units, furnaces, boilers, movable heating
units, lighting fixtures, burglar alarms, battery-operated fire alarms,
plumbing fixtures and fittings, awnings, venetian blinds, lockers, walk-in
refrigeration units, signs, vault doors and equipment, and elevators;
(4) "nonmedical equipment"
includes boilers, heating or cooling systems, and ventilation
systems;
(5) "remodeling"
(A) means altering the structure or
furnishings of a building;
(B) does
not include routine maintenance or routine replacement of equipment.
A copy of the Estimated Useful Lives of Depreciable
Hospital Assets, adopted by reference in 7 AAC 07.010, may be examined at the
department's certificate of need program at 350 Main Street, Juneau, Alaska, or
may be purchased from the American Hospital Association, 155 N. Wacker Drive,
Chicago, Illinois 60606; telephone (312) 422-3000; Internet address:
http://www.aha.org.
Authority:AS
18.07.031
AS
18.07.101
