To repeal sections 197.305, 197.310 and 197.330, RSMo 1994, relating to certificate of need, and to enact in lieu thereof three new sections relating to the same subject.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Sections 197.305, 197.310 and 197.330, RSMo 1994, are repealed and three new sections enacted in lieu thereof, to be known as sections 197.305, 197.310 and 197.330, to read as follows:

197.305. As used in sections 197.300 to 197.365, the following terms mean:

(1) "Affected persons", the person proposing the development of a new health care service, the public to be served, the health systems agency and health care facilities within the service area in which the proposed new health care service is to be developed;

(2) "Agency", the state health planning and development agency of the Missouri department of health;

(3) "Capital expenditure", an expenditure by or on behalf of a health care facility which, under generally accepted accounting principles, is not properly chargeable as an expense of operation and maintenance;

(4) "Certificate of need", a written certificate issued by the committee setting forth the committee's affirmative finding that a proposed project sufficiently satisfies the criteria prescribed for such projects by sections 197.300 to 197.365;

(5) "Develop", to undertake those activities which on their completion will result in the offering of a new institutional health service or the incurring of a financial obligation in relation to the offering of such a service;

(6) "Expenditure minimum", six hundred thousand dollars in the case of capital expenditures, or four hundred thousand dollars in the case of major medical equipment and new institutional health services as described in subdivision (11), paragraphs (a), (b), (c), (d), (e), (f), and (g), unless such sum exceeds federal regulations;

(7) "Health care facilities", [hospitals, health maintenance organizations, tuberculosis hospitals, psychiatric hospitals,] professional nursing facilities, practical nursing facilities[,] and residential care facilities I and II, [kidney disease treatment centers, including free standing hemodialysis units, and ambulatory surgical facilities,] but excluding the private offices of physicians, dentists and other practitioners of the healing arts, and Christian Science sanatoriums operated or certified by the First Church of Christ, Scientist, Boston, Massachusetts, and facilities of not for profit corporations in existence on October 1, 1980, subject either to the provisions and regulations of section 302 of the Labor-Management Relations Act, 29 U.S.C. 186 or the Labor-Management Reporting and Disclosure Act, 29 U.S.C. 401-538, and any residential care facility I or residential care facility II operated by a religious organization qualified under section 501(c)(3) of the federal Internal Revenue Code, as amended, which does not require the expenditure of public funds for purchase or operation, with a total licensed bed capacity of one hundred beds or fewer;

(8) "Health service area", a geographic region appropriate for the effective planning and development of health services, determined on the basis of factors including population and the availability of resources, consisting of a population of not less than five hundred thousand or more than three million;

(9) "Health systems agency", a regional health planning agency established pursuant to PL 93-641 and, after December 31, 1981, in accordance with section 1512(b)(1)(B) thereof;

(10) "Major medical equipment", medical equipment used for the provision of medical and other health services;

(11) "New institutional health service":

(a) The development of a new health care facility;

(b) The acquisition, including acquisition by lease, of any health care facility, or major medical equipment costing in excess of the expenditure minimum;

(c) Any capital expenditure by or on behalf of a health care facility in excess of the expenditure minimum;

(d) Predevelopment activities as defined in subdivision (14) hereof costing in excess of one hundred fifty thousand dollars;

(e) Any change in licensed bed capacity of a health care facility which increases the total number of beds by more than ten or more than ten percent of total bed capacity, whichever is less, over a two-year period;

(f) Health services, excluding home health services, which are offered in a health care facility and which were not offered on a regular basis in such health care facility within the twelve-month period prior to the time such services would be offered;

(g) A reallocation by an existing health care facility of licensed beds among major types of service or reallocation of licensed beds from one physical facility or site to another by more than ten beds or more than ten percent of total licensed bed capacity, whichever is less, over a two-year period;

(12) "Nonsubstantive projects", projects which do not involve the addition, replacement, modernization or conversion of beds or the provision of a new health service but which include a capital expenditure which exceeds the expenditure minimum and are due to an act of God or a normal consequence of maintaining health care services, facility or equipment;

(13) "Person", any individual, trust, estate, partnership, corporation, including associations and joint stock companies, state or political subdivision or instrumentality thereof, including a municipal corporation;

(14) "Predevelopment activities", expenditures for architectural designs, plans, working drawings and specifications, and any arrangement or commitment made for financing; but excluding submission of an application for a certificate of need.

197.310. 1. The "Missouri Health Facilities Review Committee" is hereby established. The agency shall provide clerical and administrative support to the committee. The committee may employ additional staff as it deems necessary.

2. The committee shall be composed of:

(1) [Two members] One member of the senate appointed by the president pro tem, [who shall be from different political parties;] and

[(2) Two members] one member of the house of representatives appointed by the speaker[, who shall be from different political parties]. The president pro tem of the senate shall make the first legislative appointment. The speaker of the house shall make the second legislative appointment to a member of the house who is from a different political party as the senatorial member; and

[(3)] (2) Five members appointed by the governor with the advice and consent of the senate, not more than three of whom shall be from the same political party.

3. No business of this committee shall be performed without a majority of the full body.

4. The members shall be appointed as soon as possible after September 28, 1979. One of the senate members, one of the house members and three of the members appointed by the governor shall serve until January 1, 1981, and the remaining members shall serve until January 1, 1982. All subsequent members shall be appointed in the manner provided in subsection 2 of this section and shall serve terms of two years.

5. The committee shall elect a chairman at its first meeting which shall be called by the governor. The committee shall meet upon the call of the chairman or the governor.

6. The committee shall review and approve or disapprove all applications for a certificate of need made under sections 197.300 to 197.365. It shall issue reasonable rules and regulations governing the submission, review and disposition of applications.

7. Members of the committee shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties.

8. Notwithstanding the provisions of subsection 4 of section 610.025, RSMo, the proceedings and records of the facilities review committee shall be subject to the provisions of chapter 610, RSMo.

197.330. 1. The committee shall:

(1) Notify the applicant within fifteen days of the date of filing of an application as to the completeness of such application;

(2) Provide written notification to affected persons and contiguous health systems agencies located within this state at the beginning of a review. This notification may be given through publication of the review schedule in all newspapers of general circulation in the area to be served;

(3) Hold public hearings on all applications when a request in writing is filed by any affected person within thirty days from the date of publication of the notification of review;

(4) Consider recommendations submitted by the appropriate health systems agency, provided such recommendations are documented and based on published criteria, plans and standards adopted by the health systems agency;

(5) Within one hundred days of the filing of any application for a certificate of need, issue in writing its findings of fact, conclusions of law, and its approval or denial of the certificate of need; provided, that the committee may grant an extension of not more than thirty days on its own initiative or upon the written request of any affected person;

(6) Cause to be served upon the applicant, the respective health system agency, and any affected person who has filed his prior request in writing, a copy of the aforesaid findings, conclusions and decisions;

(7) Consider the needs and circumstances of institutions providing training programs for health personnel;

(8) Provide for the availability, based on demonstrated need, of both medical and osteopathic facilities and services to protect the freedom of patient choice; [and]

(9) Establish by regulation procedures to review, or grant a waiver from review, nonsubstantive projects. The term "filed" or "filing" as used in this section shall mean delivery to the staff of the health facilities review committee the document or documents the applicant believes constitute an application[.]; and

(10) The committee shall prepare a written report, to be delivered to the members of the general assembly by January 26, 1998, regarding the effectiveness of the moratorium on the development of additional bed capacity of residential care facilities I and II and the amount of state savings based upon the moratorium. The report shall also contain the committee's recommendation on whether residential care facilities should remain regulated within the certificate of need process.

2. Failure by the committee to issue a written decision on an application for a certificate of need within the time required by this section shall constitute approval of and final administrative action on the application, and is subject to appeal under section 197.335 only on the question of approval by operation of law.