Current through Register Vol. 47, No. 12, March 26, 2025
(a) The
methodology will be utilized in the evaluation of certificate of need
applications involving the construction or establishment of new or replacement
beds in an acute care hospital and the need for acute care facilities and
services. It is the intent of the State Hospital Review and Planning Council
that this methodology, when used in conjunction with the planning standards and
criteria set forth in Part 708 of this Title and section
709.1 of this Part, become a
statement of basic principles and planning/decisionmaking tools for guiding and
directing the development of hospital services throughout the State.
Additionally, it is intended that the methodology will provide potential
applicants with a framework to develop specific hospital feasability studies
submitted as a part of certificate of need applications while allowing health
systems agencies sufficient flexibility to consider the unique and special
characteristics of their respective areas in determining bed need. The
methodology is conceptually based on the application of uniform planning
objectives at the county and/or State level. Its purpose is to provide
guidance, to insure flexibility, and to assist the health systems agencies, the
Commissioner of Health and potential applicants in determining the future need
for acute care beds as consistent with the certificate of need program. The
goals and objectives of the methodology expressed in this section are expected
to insure that an adequate institutional bed supply is available for normal and
emergency needs. The methodology helps identify counties where the projection
of future acute care bed need implies a potential for excess capacity and where
significant issues of hospital access and viability may occur. The goals and
objectives of this methodology also are expected to result in minimizing the
need for costly inpatient care by encouraging the development and expansion of
more desirable lower cost alternatives, as well as insuring that high quality
care and an adequate institutional bed supply are available.
(b) For purposes of this methodology, the
base year shall be 1991 and the planning target year shall be 1996. The
planning area shall be the county.
(c) The methodology uses the following steps
to estimate the need for medical/surgical and pediatric beds in the planning
target year:
(1) The normative discharge
utilization rates by county of patient residence for males and females ages
0-9, 10-14, 15-19, 20-44, 45-64, 65-74, 75-84 and 85 and over are derived for
medical/surgical and pediatric services for the base year and the year five
years previous to the base year as set forth in paragraphs (d)(1) through (3)
of this section.
(2) The
population, males and females ages 0-9, 10-14, 15-19, 20-44, 45-64, 65- 74,
75-84 and 85 and over, is estimated by county for the base year, the year five
years previous to the base year and for the planning target year as set forth
in paragraph (d)(4) of this section.
(3) Normative discharge utilization rates per
1,000 population by county of patient residence and by peer groups of counties
for males and females ages 0- 9, 10-14, 15-19, 20-44, 45-64, 65-74, 75-84 and
85 and over are estimated for the planning target year as set forth in
paragraphs (d)(5) through (8) of this section.
(4) The number of expected discharges is
derived by multiplying the utilization rates by county for males and females
ages 0-9, 10-14, 15-19, 20-44, 45-64, 65- 74, 75-84 and 85 and over for the
planning target year by the estimated county population for the planning target
year divided by 1,000.
(5) Total
expected discharges by county of residence is the sum of the expected
discharges as set forth in paragraph (4) of this subdivision.
(6) To derive the estimated number of
discharges in the planning target year by county of hospitalization, the
estimated number of expected discharges for the planning target year by county
of residence is adjusted to reflect the migration of patients between counties
in the State and for patients migrating from other states to New York as set
forth in paragraphs (d)(9) and (10) of this section.
(7) Discharges in the planning target year,
by county of expected hospitalization, are distributed by diagnostic related
groups (DRG) and payor categories as set forth in paragraph (d)(11) of this
section.
(8) Actual average base
year length of stay for discharges in the county of hospitalization for each
DRG and payor group is compared to national experience in length of stay for
each DRG and payor group as set forth in paragraph (d)(12) of this section. The
lowest length of stay, either the national experience or the county actual
average base year length of stay for each DRG and payor group, is multiplied by
the expected number of discharges for that DRG and payor group to derive
expected days of hospitalization in the planning target year. Expected days of
hospitalization in the planning target year by DRG and payor groups are summed
to derive total expected days.
(9)
Days of care provided to adults and pediatric patients are separated from total
expected days of hospitalization in the planning target year as set forth in
paragraph (d)(13) of this section. Medical/surgical bed need is derived from
adult days and pediatric bed need is derived from pediatric days.
(10) Expected adult and pediatric days of
hospitalization in the planning target year are divided by 365 to derive
average daily census for each county.
(11) Estimated medical/surgical and pediatric
beds needed in the planning target year for each county are calculated by
dividing average daily census by the expected occupancy rate as set forth in
paragraph (d)(14) of this section.
(12) The estimates of public need for
medical/surgical and pediatric beds for the planning target year for each
county are adjusted, as set forth in paragraphs (d)(15), (16) and (17) of this
section, to reflect the use of these beds for alternate level of care patients
and other extraordinary disease occurrences which were not adequately reflected
in the historic use rate experience.
(d) The methodology for determining public
need for acute care beds and the estimates of projected bed need by county for
the planning target year shall be as follows:
(1) The initial data base for the base year
and the year five years previous to the base year is extracted from the
Statewide Planning and Research Cooperative System (SPARCS) for
medical/surgical and pediatric discharges. Excluded are neonatal discharges,
newborns, and discharges with nonmedical/surgical DRGs of maternity,
psychiatry, drug abuse, alcohol abuse, burns and medical rehabilitation. In the
event other methodologies are developed by the Department of Health to project
acute care bed need for extraordinary disease occurrences, these discharges
also shall be removed from the base year and the year five years previous to
the base year. For the purposes of this methodology, discharges with human
immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) are
excluded.
(2) Counties with similar
demographic and socio-economic characteristics are grouped into peer groups for
purposes of this methodology:
Group
1: Bronx, Kings, New York, Queens;
2: Dutchess, Nassau, Orange, Rockland, Suffolk,
Richmond, Westchester;
3: Albany, Broome, Erie, Monroe, Niagara, Oneida,
Onondaga;
4: Genesee, Madison, Montgomery, Ontario, Oswego,
Rensselaer, Saratoga, Schenectady, Wayne,
5: Cattaraugus, Chautauqua, Chemung, Clinton,
Cortland,
Jefferson, Otsego, Steuben, Tompkins, Ulster,
Warren;
6: Columbia, Greene, Hamilton, Herkimer,
Livingston,
Orleans, Putnam, Schoharie, Schuyler, Seneca,
Washington, Wyoming, Yates;
7: Allegany, Cayuga, Chenango, Delaware, Essex,
Franklin, Fulton, Lewis, St. Lawrence, Sullivan;
8: Tioga.
(3) To isolate health system changes that are
occurring with the growth of hospital and free-standing ambulatory-surgery
programs, discharges in the initial data base for the base year and the year
five years previous to the base year are further classified based on their
principal procedure code in SPARCS. Discharges whose principal procedure is
included in the Department of Health's Ambulatory Surgery data base are
classified as appropriate for ambulatory surgery. Exceptions to this
classification include obstetric and newborn cases, deaths, transfers to acute
care and long term care facilities and procedures done less than five percent
of the time on an ambulatory basis.
(4) The population age 0-9, 10-14, 15-19,
20-44, 45-64, 65-74, 75-84 and 85 and older shall be estimated by county by sex
for the base year, the year five years previous to the base year and the
planning target year using linear interpolation of the population projections
developed by the New York State Department of Economic Development and by
population categories based on U.S. Census Bureau data. If the population
projections for the planning target year are based on census data collected 10
years or more before the planning target year, population projections for the
planning target year shall be adjusted to account for the percent difference in
the most recent year's actual census and the Department of Economic
Development's population projection for that same year.
(5) A normative discharge utilization rate
per 1,000 population by county of patient residence, for each sex, age group,
and ambulatory-surgery category is calculated by dividing the number of
discharges by the population for each sex and age group and multiplying this
ratio by 1,000.
(6) For each peer
grouping of counties, the number of discharges in each sex, age group, and
ambulatory-surgery category are summed for a group total in the base year and
the year five years previous to the base year. The population projection for
the base year and the year five years previous to the base year for each sex
and age group are summed for all counties in a peer group for a peer group
population total.
(7) A normative
discharge utilization rate per 1,000 population by county peer group for each
sex, age group, and ambulatory-surgery category is derived by dividing the sum
of county discharges by the sum of county population estimates as set forth in
paragraph (6) of this subdivision and multiplying by 1,000. An average annual
rate of change is calculated for each sex, age group, and ambulatory-surgery
category between the year five years previous to the base year and the base
year.
(8) The projected utilization
rate for the planning target year is calculated by applying the county peer
group's average annual rate of change for each age group, sex and
ambulatory-surgery category to each county's base year utilization rate and
then each year thereafter up to the planning target year. This procedure shall
be performed in all county peer groups, except groups 1 and 8, to derive a
county estimated utilization rate for the planning target year. For group 8,
the base year actual utilization rates shall be used for the planning target
year. For group 1, the lowest actual average annual rate of change between the
year five years previous to the base year and the base year for each age, sex
end ambulatory-surgery category shall be applied to each county's base year
rate and each year thereafter up to the planning target year.
(9) To account for the migration of patients
from the county of residence to the county of hospitalization, the projected
number of discharges by county of residence in the planning target year will be
subdivided among the counties of hospitalization according to the same
proportions as experienced by discharges in the base year. For example, if 50
percent of the base year discharges residing in county A were hospitalized in
county B, then 50 percent of the projected planning target year discharges
residing in county A shall be assumed hospitalized in county B. Discharges in
the counties of hospitalization are summed to derive a total number of
discharges by county of hospitalization.
(10) To account for the estimated number of
non-New York State residents hospitalized in New York State counties in the
planning target year, the actual number of non-New York State residents in the
base year is added to the projected number of discharges in the planning target
year as calculated in paragraph (9) of this subdivision. In the event that
reliable information becomes available from the health systems agencies or
other sources on migration pattern changes expected either within New York
State counties or from non-New York State residents, then the migration
patterns from the base year may be adjusted accordingly before being applied to
the planning target year.
(11) For
the purposes of this methodology, the 1991 Federal grouping system of DRGs, as
set forth in Appendix D-1, infra, shall be used. The following four payor
categories are used:
(iii) Blue Cross plus other commercial
carriers; and
(iv) all other payors
including self-pay.
The percent distribution of discharges by DRG and payor
group in the base year is applied to the number of discharges projected for the
planning target year to derive the projected number of discharges by DRG and
payor group by county of hospitalization.
(12) For the purposes of this methodology,
the 75th percentile of national length of stay data, as set forth in Appendix
D-2, infra, shall be used. This national data is collected from inpatient
discharge records submitted by hospitals participating in the Professional
Activity Study. If a DRG is excluded from the national survey because it is no
longer valid, ungroupable or inappropriate for length of stay determinations,
then the actual New York State average length of stay by payor group in the
base year shall be used for the expected length of stay in the target
year.
(13) Pediatric days are
defined as days for patients ages 0-14. The actual proportion of pediatric days
as a percent of total medical/surgical and pediatric days combined for the base
year is calculated for each county of hospitalization based on the age of the
patients discharged. This actual base year percent distribution is multiplied
by the projected number of total medical/surgical and pediatric days combined
for the planning target year to derive projected pediatric days.
(14) The following occupancy levels are
applied to project acute care bed need by county and bed type:
Bed Type Urban Rural
Medical/surgical .85 .80
Pediatric .70 .65
Obstetric .75 .70
For purposes of this methodology, the following counties
are considered urban - Albany, Broome, Dutchess, Erie, Monroe, Nassau, Niagara,
Oneida, Onondaga, Orange, Rockland, Suffolk, Westchester, Bronx, Kings, New
York, Queens and Richmond. The rural occupancy proportions shall be applied in
all other counties in New York State.
(15) Patients who no longer require acute
care but stay in the hospital Pending discharge are termed alternate level of
care (ALC) patients. Their bed use shall be added to the acute care bed need
projected for the planning target year. The number of ALC days in the base year
and the year five years previous to the base year is extracted from the SPARCS
case-mix file by county of hospitalization for the following age groups - 0-44,
45-64, 65-74, 75-84 and 85 and older. The statewide average annual rate of
change in the number of ALC days by age group is calculated between the year
five years previous to the base year and the base year. This average annual
rate of change is applied to the statewide actual number of ALC days by age
group in the base year and each year thereafter to the planning target year.
The total number of ALC days statewide for the planning target year by age
group are then distributed to each county of hospitalization according to the
percent distribution of ALC days by county in the base year.
(16) Projected ALC days by county of
hospitalization are summed across the age groups to derive a total number of
expected ALC days by county. ALC days by county are divided by 365 to calculate
an average daily census which is then added to the projected number of acute
care beds needed in each county.
(17) The estimates of need for acute care
beds as derived in the foregoing provisions of this section do not include
estimates of need for acute care beds for patients with HIV/AIDS. Need for
acute care beds to serve such patients shall be in addition to the estimates of
need otherwise derived in this subdivision. If there are other patients with
extraordinary disease occurrences whose acute care use is not adequately
represented in the base year rate or in the rate for the year five years
previous to the base year, an estimate of expected additional acute care bed
need for the planning target year also shall be added to account for the needs
of these patients.
(e)
The methodology to derive an estimate for the need for obstetrical or maternity
service beds in the planning target year shall be as follows:
(1) The number of expected live births for
the planning target year is calculated by applying the projected age-specific
birth rate for the planning target year as estimated by the New York State
Department of Economic Development to the projected female population of
child-bearing age (15-44 years) for the planning target year. If the
projections of births for the planning target year are based on census data
collected 10 years or more before the planning target year, projections of
births for the planning target year shall be adjusted to account for the
percent difference in the most recent year's actual births and the Department
of Economic Development's projection of births for that same year.
(2) An estimated rate of spontaneous fetal
deaths and induced abortions is applied to the projected female population of
child-bearing age (15-44 years) for the planning target year and then added to
the expected number of live births to derive total expected obstetric
discharges.
(3) To derive the
estimated number of discharges in the planning target year by county of
hospitalization, the estimated number of expected discharges for the planning
target year by county of residence shall be adjusted to reflect the migration
of patients between counties in the State and for patients migrating from other
states to New York for the female population ages 15-44, as set forth in
paragraphs (d)(9) and (10) of this section.
(4) The number of estimated obstetric
discharges for the planning target year is adjusted to account for the number
of antenatal admissions, defined as admissions to obstetric beds which, while
maternity related, do not result in a delivery. Examples of antenatal services
are ectopic pregnancies, threatened abortions, miscarriages, false labor and
maternity-related diagnostic procedures. The same proportion of antenatal
discharges by county of hospitalization, in the base year is added to the
estimated number of obstetric discharges in the planning target year.
(5) Expected discharges for the planning
target year by obstetric-related diagnostic related group and payor are
distributed as set forth in paragraph (d)(11) of this section.
(6) The expected number of obstetric days for
the planning target year is calculated by multiplying the number of projected
discharges for each obstetric-related DRG and payor group by either the actual
average county length of stay or the 75th percentile of national length of stay
by DRG and payor group, as set forth in Appendix D-2, infra, whichever is
lower. Total obstetric days for the planning target year shall be further
adjusted to reflect an expected length of stay for cesarean deliveries
estimated by the Department of Health based on an analysis of the expected
frequency and length of stay of cesarean section deliveries in New York State
hospitals.
(7) The expected number
of obstetric days of hospitalization in the planning target year is divided by
365 to derive an average daily census for each county.
(8) The estimated number of obstetric beds
needed in each county in the planning target year is calculated by dividing the
average daily census by the expected occupancy rate as set forth in paragraph
(d)(14) of this section.
(f) Periodically, but at least every five
years from the base year, the Department of Health, in conjunction with the
health systems agencies' and the State Hospital Review and Planning Council,
shall review and update the methodology and projections established pursuant to
this section to project acute care bed need to a new planning target year not
to exceed five years from a new base year.
(g) The county acute care bed need totals for
medical/surgical, pediatric and obstetric beds determined in accordance with
subdivisions (c), (d) and (e) of this section shall constitute the estimated
public need for medical/surgical, pediatric and obstetric beds in each county
for the planning target year. Each health systems agency may review the
estimated bed need of its region and, in conjunction with the Department of
Health and the State Hospital Review and Planning Council, may:
(1) make recommendations for amending the
need estimates developed in accordance with subdivisions (c), (d) and (e) of
this section to reflect local characteristics. Factors that may be considered
in this analysis include, but are not limited to, the following: an analysis of
current utilization patterns as it relates to projected trends developed
pursuant to the methodology for determining public need for acute care beds in
subdivisions (c), (d), and (e) of this section, health status indices of the
population, high and low variation discharge composition, ambulatory care
sensitive discharge experience and trends in alternate level of care;
(2) identify counties at high risk of
undergoing acute care system changes due to an estimated excess of
medical/surgical, pediatric and/or obstetric bed capacity for the planning
target year. Acute care system changes shall refer to any or all of the
following occurrences: discontinuation of acute care services, conversion of
all or a portion of the acute care beds, decertification of all or a portion of
the acute care beds or hospital closure. A county at high risk of acute care
system changes is one that meets at least one of the following criteria:
(i) the estimated acute care bed need in the
county for the planning target year is less than 85 percent of existing
capacity and there is at least one hospital in the county with fewer beds than
the estimated excess in medical/surgical, pediatric, and/or obstetric beds for
the county; or
(ii) the county is
identified as being at high risk by the local health systems agency, subject to
the approval of the commissioner, when other factors are determined to result
in acute care systems changes.
(h) The Department of Health in conjunction
with the health systems agencies may develop institution-specific
recommendations, with the concurrence of the State Hospital Review and Planning
Council, for expected service needs and capital expenditure requirements.
Commencing in 1994, and no more frequently than once a year, acute care
facilities, in counties identified as being at high risk pursuant to
subdivision (g) of this section, may be required to submit to the commissioner,
on forms prescribed by the commissioner, a summary assessment of the facility's
service needs and capital expenditure requirements for at least the following
five calendar years. Based on these five-year plans and the estimated need for
acute care beds in the county, the department, in consultation with the local
health systems agencies, shall identify the need for appropriate changes in
facility utilization and services provided to achieve the projected acute care
bed need.
(i) Results of the acute
care bed need methodology, as set forth in subdivisions (c), (d) and (e) of
this section, together with any adjustments approved by the commissioner in
consultation with the State Hospital Review and Planning Council and developed
in accordance with subdivision (g) of this section, shall be used when an
application proposes one of the following:
(1)
an increase in the facility's medical/surgical, pediatric or obstetric bed
composition;
(2) a change in the
operator of a hospital that requires a need review;
(3) a capital investment which meets at least
one of the following criteria:
(i) the
project is a Capital Architectural and Program Alternatives (CAPA) project with
total basic costs of construction as defined in section
710.1 of this Title, exceeding
$25,000,000; or
(ii) the total
basic costs of construction is an amount which is greater than 50 percent of
the net depreciated value of the facility's total fixed assets used for
hospital purposes.
(j) When submitting feasibility studies in
support of applications which are subject to this section, applicants shall use
the same discharge utilization rate calculations and trends as used in the
acute care bed need methodology set forth in subdivisions (c), (d) and (e) of
this section. Feasibility studies may not incorporate changes in hospital
discharges based on market share changes except in the following instances:
(1) acquisition of another hospital and
consolidation of inpatient activity;
(2) introduction of new services unavailable
to the hospital service area population; or
(3) continued increases in the market share
between the year five years previous to the base year and the base
year.
(k) The review of,
and recommendations and decisions concerning, applications subject to this
section shall be based upon the following:
(1) the estimated county acute care bed need
as set forth in subdivisions (c), (d), (e) and (g) of this section;
and
(2) the county's expected
service needs and capital expenditure requirements, and the recommendations
developed and need for changes identified in accordance with subdivision (h) of
this section.