Code of Maryland Regulations
Title 10 - MARYLAND DEPARTMENT OF HEALTH
Part 4
Subtitle 24 - MARYLAND HEALTH CARE COMMISSION
Chapter 10.24.01 - Procedural Regulations for Health Care Facilities and Services
Section 10.24.01.03 - Non-Coverage by Certificate of Need or Other Commission Approval
Universal Citation: MD Code Reg 10.24.01.03
Current through Register Vol. 51, No. 19, September 20, 2024
A. Acquisition of an Existing Health Care Facility.
(1) At
least 30 days before closing on a contract to acquire a health care facility,
the person acquiring the facility shall notify the Commission in writing, with
a copy to the local health officer in each affected jurisdiction and the
appropriate State licensing agency, of the intent to acquire the facility, and
include the following information:
(a) The
health care services provided by the facility;
(b) The bed capacity, or jurisdiction served,
if a community-based service;
(c)
Complete organizational charts that describe the ownership of the health care
facility prior to and after the proposed acquisition; and
(d) Any other information required by this
chapter, by the State Health Plan chapter applicable to the health care
facility, or requested by Commission staff.
(2) Deemed Approval.
(a) Except for acquisitions of a
comprehensive care facility established under §I of this regulation, CON
review is not required if Commission staff does not issue either a
determination of coverage or notice that timely or complete notice was not
received within 60 days of receipt of a notice from the person acquiring the
health care facility.
(b) Upon
request, Commission staff shall provide written confirmation that an
acquisition was deemed approved under this regulation.
(3) Commission staff's determination that CON
or other Commission review is not required remains valid for 180 days from its
issuance. A new determination of coverage shall be required if the acquisition
is not completed within that time period.
(4) If the acquisition is completed, the
buyer shall sign a notice of completion of acquisition and file it with the
Commission within 15 days of the completion of the acquisition.
B. Acquisition of a Comprehensive Care Facility, Home Health Agency, or Hospice.
(1) In addition to providing the information
required in §A of this regulation, a person seeking to acquire a
comprehensive care facility, home health agency, or hospice shall:
(a) Identify each person with an ownership
interest in the acquiring entity or a related or affiliated entity, including
(i) The percentage of ownership interest of
each such person; and
(ii) The
history of each such person's experience in ownership or operation of health
care facilities;
(b)
Provide information on corporate structure and affiliations of the acquirer,
purchase price, source of funds, and other relevant data as
requested;
(c) Affirm that the
services provided will not change as a result of the proposed acquisition and
that its commitment to Medicaid participation, if any, will not decrease as a
result of the proposed acquisition; and
(d) Affirm under penalties of perjury, that
within the last 10 years no owner or former owner of the purchaser, or member
of senior management or management organization, or a current or former owner
or senior manager of any related or affiliated entity has been convicted of a
felony or crime, or pleaded guilty, nolo contendere, entered a best interest
plea of guilty, received a diversionary disposition regarding a felony or
crime, and that the purchaser or a related or affiliated entity has not paid a
civil penalty in excess of $10 million dollars that relates to the ownership or
management of a health care facility.
(2) Disqualification for Acquisition. A
comprehensive care facility, home health agency, or hospice may not be acquired
by an entity if an owner or member of senior management or an owner or member
of senior management of a related or affiliated entity of the acquiring entity
has been convicted of a felony or crime or pleaded guilty, nolo contendere,
entered a best interest plea of guilty, or received a diversionary disposition
regarding a felony or crime within the last 10 years, unless:
(a) All of the individuals involved in the
fraud or abuse are no longer associated with the entity or any of its related
or affiliated entities;
(b) Each
entity has fully complied with each applicable plan of correction;
and
(c) If applicable, each entity
has fully complied with each condition of the imposition of a civil penalty or
agreed disposition.
(3)
In an acquisition of a home health agency or hospice, the purchaser may only
acquire the authority to provide services in jurisdictions for which the
facility being acquired was granted a CON or is otherwise recognized by the
Commission as having legal authorization.
C. Closure of a Health Care Facility.
(1) A CON is not required to close a health
care facility or part of a health care facility, including a State hospital, if
it provides notice to the Commission at least 90 days prior to the closing or
45 days prior to the partial closing and complies with the provisions of
§C(2)-(4) of this regulation, if applicable.
(2) An acute general hospital shall hold a
public informational hearing in accordance with Regulation .04D of this chapter
if the hospital:
(a) Files a notice of the
proposed closing of the hospital with the Commission; or
(b) Is located in a jurisdiction with fewer
than three acute general hospitals and files a notice of the partial closing of
the hospital.
(3) The
Commission may require a health care facility not covered by §C(2) of this
regulation to hold a public information hearing in accordance with Regulation
.04D of this chapter.
(4) If a
hospital that intends to close has outstanding public obligations issued on its
behalf, written notice of its intended closing shall be given to the Maryland
Health and Higher Educational Facilities Authority and the Health Services Cost
Review Commission by the:
(a) Commission,
within 5 days after receiving a written notification by the hospital of its
intended closure;
(b) Hospital,
within 10 days of filing with the Commission its written notification of its
intended closure, along with a written statement of all public obligations
issued on behalf of the hospital that provides the information required by
Economic Development Article, §10-346(a)(2),
Annotated Code of Maryland; and
(c)
Commission, that the hospital held a public informational hearing in
consultation with the Commission in the jurisdiction where the hospital is
located.
D. Temporary Delicensure or Suspension of Bed Capacity, Health Care Facility, or CON-Approved Service.
(1) A temporary
delicensure of licensed bed capacity or a licensed and operating health care
facility or a temporary suspension of a CON-approved service does not require
CON review, and the Commission will retain the bed capacity or health care
facility on its inventory or permit the reimplementation of the CON-approved
service without obtaining a CON for up to 1 year, if the owner or licensed
operator:
(a) Provides written notice to the
Commission at least 30 days before the proposed temporary delicensure or
temporary service suspension;
(b)
Identifies good cause for the proposed temporary delicensure or temporary
service suspension;
(c) States the
intention either to bring the bed capacity back onto the facility's license or
relicense the health care facility or reimplement the CON-approved service at
the end of the 1-year period, or to notify the Commission that it intends to
take another of the actions permitted under this subsection; and
(d) Has received authorization from the
Executive Director for the temporary delicensure or temporary service
suspension.
(2) Bed
capacity or a facility that has been authorized by the Commission to be
temporarily delicensed or a CON-approved service that has been authorized by
the Commission to be temporarily suspended is not subject to the provisions of
this section:
(a) During the pendency at the
Commission of a letter of intent to apply or an application for CON approval
involving the temporarily delicensed bed capacity or facility or the
temporarily suspended CON-approved service;
(b) If the Commission has issued a
Certificate of Need to reimplement the facility's temporarily delicensed bed
capacity or the facility's temporarily suspended CON-approved
service;
(c) If the Commission has
approved a request pursuant to Regulation .03 or .04 of this chapter to
reimplement the bed capacity, facility or CON-approved service, and has
determined that the bed capacity, facility, or CON-approved service may be
reimplemented without a CON or other Commission approval, including but not
limited to actions that may be undertaken by a merged asset system of which the
facility is a member;
(d) If the
Commission receives a notice of acquisition of the temporarily delicensed bed
capacity or facility and the buyer and seller timely complete the acquisition,
in accordance with Regulation .03 of this chapter; or
(e) If the Commission receives written
notification that the owner or operator of the temporarily delicensed bed
capacity or facility has applied for relicensure or reimplementation of the
temporarily suspended CON-approved service.
(3) The requirements and procedures in this
subsection do not apply to:
(a) A proposal to
close, on either a temporary or a permanent basis:
(i) An acute general hospital or part of a
hospital, including a medical service, in a jurisdiction with fewer than three
acute general hospitals; or
(ii) A
health care facility that provides any medical service approved by the
Commission as a regional or Statewide health resource; or
(b) A temporary interruption of a
CON-approved service that does not exceed 30 days.
(4) This section does not substitute any
notice or approvals that may be required from another body that regulates the
bed capacity, health care facility, or CON-approved service.
(5) A health care facility may not request
authorization by the Commission to temporarily delicense bed capacity or the
entire health care facility or to temporarily suspend a CON-approved service
more than one time in a 1-year period.
(6) No fewer than 30 days before the end of
the 1-year or other applicable period, a health care facility that has
temporarily delicensed bed capacity or its entire facility or has temporarily
suspended a CON-approved service shall notify the Commission that, before the
end of the 1-year or other applicable period, it will:
(a) Apply to relicense the bed capacity or
the entire facility temporarily delicensed or reimplement the CON-approved
service temporarily suspended pursuant to this subsection;
(b) Submit and receive the Executive
Director's approval of a specific plan for the relicensure of the bed capacity
or facility or for the reimplementation of the temporarily suspended
CON-approved service, that:
(i) Imposes stated
time frames by which steps toward the relicensure of the bed capacity or
facility or reimplementation of the service will be accomplished, or the bed
capacity, facility, or service will be deemed abandoned; and
(ii) May be revised upon a proposal by the
owner or operator, with the approval of the Executive Director;
(c) File a letter of intent,
followed within 60 days by a Certificate of Need application, or request the
applicable level of Commission action pursuant to Regulations .03 and .04 of
this chapter, for the relocation of the bed capacity or facility, or for a
capital expenditure deemed necessary to relicense the temporarily delicensed
beds or facility or necessary to reimplement the temporarily suspended
CON-approved service;
(d) Execute a
binding contract to transfer ownership of the health care facility, if the
requirements of §A of this regulation are met;
(e) Execute a binding contract to transfer
ownership of the previously licensed bed capacity, contingent on the filing
within 90 days for those filings not subject to a published review cycle or
upon the Commission's next published review schedule of a letter of intent to
apply for CON approval, or other applicable level of Commission action pursuant
to Regulations .03 and .04 of this chapter if required, to relocate the bed
capacity; or
(f) Relinquish the bed
capacity or the authorization to provide the CON-approved service, or seek the
appropriate Commission approval to delicense and permanently close the health
care facility.
(7) The
Executive Director may extend the period of a temporary delicensure or
temporary service suspension under this subsection beyond 1 year for good
cause.
(8) An application for a CON
to reimplement at another location any previously operating bed capacity that
has not operated for 2 or more years shall demonstrate that the bed capacity is
needed in the jurisdiction.
(9)
Abandonment of Bed Capacity, Health Care Facility, or Service.
(a)
If, at the end of the 1-year period or other time period permitted under this
section, the requirements of §C(5) or (7) of this regulation have not been
met, no request for an extension of time has been granted pursuant to
§C(6) of this regulation, and the previously delicensed bed capacity or
facility has not been relicensed or the previously suspended service has not
been reimplemented, the bed capacity, health care facility, or service is
deemed abandoned by its owner or operator.
(b) The Commission shall issue a written
notice to the owner of the affected facility, and to its licensed operator if
the facility is not operated by its owner, of the opportunity to respond within
30 days before the abandonment is considered final, in order to demonstrate
that the previously delicensed bed capacity or facility has been relicensed or
the previously suspended service has been reimplemented.
E. A CON is not required to relocate an existing health care facility owned or controlled by a merged asset system, if:
(1) The proposed relocation is
not across jurisdictional boundaries and is to a site in:
(a) The primary service area of the hospital
to be relocated; or
(b) The service
area of the non-hospital health care facility to be relocated;
(2) At least 45 days before the
proposed relocation, notice is filed with the Commission, which will publish
notice of the proposed relocation in the Maryland Register and a newspaper of
general circulation in the affected area; and
(3) The relocation of the existing health
care facility does not:
(a) Change the type or
scope of health care services offered; and
(b) In the case of a hospital, require a
capital expenditure that exceeds the hospital capital threshold, except as
provided in §J of this regulation.
F. Change in Bed Capacity.
(1) A CON is not required to increase or
decrease bed capacity if:
(a) For a health
care facility that is not an acute general hospital, the change does not exceed
ten beds or 10 percent of the facility's total bed capacity, whichever is less,
and the facility's licensed bed capacity has not changed in the preceding 2
years;
(b) For a special
rehabilitation hospital or a residential treatment center, the change does not
exceed ten beds or 40 percent of its current bed capacity, whichever is less,
and the facility 's licensed bed capacity has not changed in the preceding 2
years;
(c) For an acute general
hospital located in a jurisdiction with three or more acute general hospitals,
the change:
(i) Is between hospitals in a
merged asset system located within the same health planning region;
(ii) Does not involve comprehensive care or
extended care beds;
(iii) Does not
occur earlier than 45 days after a notice of intent to reallocate bed capacity
is filed with the Commission; and
(iv) Does not create a new health care
service through the relocation of beds from one jurisdiction to another
jurisdiction pursuant to this subsection;
(d) The change in bed capacity is the result
of the annual recalculation of licensed bed capacity in acute general hospitals
provided for under Health-General Article, §19-307.2, Annotated Code of
Maryland;
(e) For an existing
medical service provided by an acute general hospital:
(i) The total bed capacity of the hospital
does not increase;
(ii) The change
is maintained for at least a 1-year period, unless modified pursuant to CON or
exemption from CON, or as a result of the annual recalculation of hospital
licensed bed capacity required at HealthGeneral Article, §19-307.2,
Annotated Code of Maryland; and
(iii) The hospital notifies the Commission at
least 45 days before the proposed change in bed capacity of its medical
services; or
(f) At
least 45 days before increasing or decreasing bed capacity, written notice of
the intent to change bed capacity is filed with the Commission, and the
increase or decrease in bed capacity will occur in:
(i) An existing general hospice that has a
current license issued by the Secretary and involves an increase in bed
capacity for the provision of inpatient hospice care under the facility's
current license; or
(ii) An
existing intermediate care facility that offers residential or intensive
substance-related disorder treatment services for withdrawal management and
treatment under the facility's current license issued by the
Secretary.
(2) Except as otherwise provided in this
regulation, a CON is not required to decrease bed capacity at a health care
facility if at least 45 days before decreasing bed capacity, written notice of
the intent to change bed capacity is filed with the Commission.
G. A CON is not required for a non-hospital health care facility project by a health maintenance organization if:
(1) At least 90 percent of the patients
who will receive health care services from the facility are enrolled in the
health maintenance organization;
(2) The health maintenance organization
requests a determination of coverage from Commission staff that describes its
proposed project, including its street address, and the health care service to
be provided; and
(3) Commission
staff issues a determination that CON or other Commission review is not
required.
H. A home health agency is not required to obtain a CON to open a branch office, as defined by the Centers for Medicare and Medicaid Services at 42 CFR § 484.2, although notice to the Commission is required.
I. Religious Orders.
(1) A CON is not required before a religious
order seeks licensure to operate a comprehensive care facility for the
exclusive use of members of that religious order, provided that the religious
order seeks and receives a determination of coverage from Commission staff that
a CON is not required.
(2) The
request for a determination of coverage shall provide the following:
(a) The name and address of the
facility;
(b) The number of beds in
the facility;
(c) The name of the
religious order that will own and operate the facility;
(d) An affirmation that the facility will be
owned and operated by the religious order for the exclusive use of its members;
and
(e) Agreement to participate in
the Maryland Long-Term Care Survey, authorized by COMAR 10.24.03.
(3) Commission staff shall issue a
determination that either CON review is not required, with or without
conditions, or that CON review is required for stated reasons.
J. Hospital Capital Expenditures in Excess of the Hospital Capital Threshold.
(1) A CON is not required by a hospital
before it obligates an amount exceeding the hospital capital threshold for
capital expenditures for physical plant construction or renovation, or before
it receives a donated physical plant whose appraised value exceeds the hospital
capital threshold, under the following circumstances:
(a) The capital expenditure may be related to
patient care.
(b) The capital
expenditure does not require, over the entire period or schedule of debt
service associated with the project or plant, a total cumulative increase in
patient charges or hospital rates of more than $1,500,000 for the capital costs
associated with the project.
(c) At
least 45 days before an obligation is made or the physical plant is donated,
the hospital provides notice to the Commission and to the Health Services Cost
Review Commission, in the form of a written request for determination of
coverage, as provided in Regulation .14A of this chapter, which shall contain
the following information:
(i) A description
of the proposed capital project, including whether it involves new
construction, renovation of or additions to the existing physical plant, or the
donation of a physical plant, with any necessary adaptations;
(ii) The total capital costs associated with
the project;
(iii) The sources and
uses of funds to be applied to the project, including hospital equity
contributions, if applicable, as documented by audited financial statements of
the hospital and relevant subsidiary corporations, if any, from which funds are
to be taken;
(iv) A description of
the financing arrangement, if applicable, for the proposed project, including
the debt service schedule; and
(v)
A statement by one or more persons authorized to represent the hospital that
the hospital does not require a total cumulative increase in patient charges or
hospital rates of more than $1,500,000 for the capital costs associated with
the project.
(2) After consultation with the Health
Services Cost Review Commission, the Commission shall issue a determination
whether CON review is required within 45 days after it receives the information
specified in this section. If Commission staff does not issue a determination
within 60 days of receipt of all relevant financial information by the
Commission and by the Health Services Cost Review Commission, the Commission is
considered to have issued a determination that approval of the capital
expenditure is not required by the Commission or by the Health Services Cost
Review Commission.
(3) Commission
staff shall issue a determination that either CON review is not required, with
or without conditions, or that CON review is required for stated
reasons.
K. Continuation of Specific Exception from Certificate of Need for Continuing Care Retirement Communities.
(1) A comprehensive care facility
on the campus of a continuing care retirement community is excepted from CON
review, provided that the requirements of Health-General Article,
§19-114(d)(2)(ii)(1), Annotated Code of Maryland, and this chapter are
met, and that the number of comprehensive care beds located on the campus of
the continuing care retirement community does not exceed:
(a) 20 percent of the number of independent
living units at a continuing care retirement community that has 300 or more
independent living units; or
(b) 24
percent of the number of independent living units at a continuing care
retirement community that has fewer than 300 independent living
units.
(2) Limited
Direct Admission. Notwithstanding the provisions of Health-General Article,
§19-114(d)(2)(ii), Annotated Code of Maryland, a continuing care
retirement community does not lose its exception from CON when the continuing
care community admits an individual directly to a comprehensive care facility
within the continuing care community under either of the following
circumstances:
(a) Two individuals having a
long-term significant relationship are admitted together to a continuing care
retirement community and:
(i) The admission
occurs after October 1, 1999;
(ii)
The admission includes spouses, two relatives, or two individuals having a
long-term significant relationship, as defined in Regulation .01B of this
chapter and supported by documentary proof in existence for at least 1 year
before application to the continuing care retirement community, admitted at the
same time, under a joint contract, who are jointly responsible for expenses
incurred under the joint contract; and
(iii) One of the individuals admitted under
the joint contract will reside in an independent living unit or an assisted
living unit; or
(b) An
individual is admitted directly into a comprehensive care bed at a continuing
care retirement community and:
(i) The
individual must have executed a continuing care agreement and must have paid
entrance fees that are at least equal to the lowest entrance fee charged by the
continuing care retirement community for its independent or assisted living
units;
(ii) The individual must pay
the entrance fee by the same method, terms of payment, and time frame as a
person who immediately assumes residence in an independent or assisted living
unit at that continuing care retirement community; and
(iii) The individual admitted to the
comprehensive care bed must have the potential for eventual transfer to an
independent living unit or assisted living unit at that continuing care
retirement community, as determined by the subscriber's personal physician, as
defined in Regulation .01B of this chapter.
(3) Under §K(2)(b)(iii) of this
regulation, an individual is deemed not to have potential for eventual transfer
to an independent living unit or assisted living unit if the individual can
qualify for hospice services under federal Medicare regulations or if the
individual has an irreversible condition that would make it unlikely that the
individual could transfer to an independent living unit or assisted living unit
at the continuing care retirement community. Irreversible conditions include
quadriplegia, ventilator dependence, and any end-stage condition.
(4) The total number of comprehensive care
beds occupied by individuals who are directly admitted to comprehensive care
beds pursuant to §K(2)(b) of this regulation may not exceed 20 percent of
the total number of licensed and available comprehensive care beds at the
continuing care retirement community.
(5) The admission of the individual directly
into the comprehensive care bed pursuant to §K(2)(b) of this regulation
may not cause the occupancy of the comprehensive care facility at the
continuing care retirement community to exceed 95 percent of its current
licensed capacity.
(6) The
comprehensive care facility at the continuing care retirement community shall
maintain an attestation by the individual's personal physician that the
individual has the potential for eventual transfer to an independent living
unit or an assisted living unit.
(7) The nursing home administrator of the
comprehensive care facility at each continuing care retirement community who
admits an individual directly to a comprehensive care bed pursuant to
§K(2)(b) of this regulation shall maintain information, in a format
specified by the Commission, about each admission in the format required by the
Commission and encrypted by the continuing care retirement community so that
the individual's identity will not be disclosed. The forms shall be maintained
by the nursing home administrator, to be provided to Commission staff upon its
request, and shall include:
(a) The number and
utilization of licensed comprehensive care beds excluded from Certificate of
Need requirements at the continuing care retirement community;
(b) The admission source of each individual
admitted pursuant to §K(2)(b) of this regulation to a comprehensive care
bed excluded from Certificate of Need requirements at the continuing care
retirement community;
(c) For an
individual admitted pursuant to §K(2)(b) of this regulation, the amount of
and terms of payment for the entrance fee;
(d) The dates of admission and discharge of
each individual admitted pursuant to §K(2)(b) of this
regulation;
(e) The site to which
an individual directly admitted pursuant to §K(2)(b) of this regulation is
discharged; and
(f) Any other
information as required by Commission staff.
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