(a) Except as provided in § 44-407, all persons proposing to offer or develop in the District a new institutional health service, or to obligate a capital expenditure to obtain an asset to be located in the District shall, prior to proceeding with that offering, development, or obligation, obtain from the SHPDA a certificate of need that demonstrates a public need for the new service or expenditure. Only those institutional health services or capital expenditures that are granted a certificate of need shall be offered, developed, or obligated within the District.
(b) Before there is a capital expenditure to acquire, either by purchase or under a lease or comparable arrangement, of an existing HCF or part of a HCF (“Transaction”), the person or persons acquiring control (“Proposed Owner”) shall obtain a certificate of need from SHPDA. Subject to the provisions of paragraphs (5), (6), (7) and (8) of this subsection, SHPDA shall waive the procedures and review criteria set forth under § 44-409 and shall grant a certificate of need if all of the following conditions are met:
(1) The Proposed Owner shall provide written notification to SHPDA at least 60 days before the Transaction. The notification shall include the following:
(A) The names of the current owner(s) of the HCF, including, as applicable, all partners, controlling shareholders or members, directors, trustees and officers;
(B) The names of the Proposed Owner of the HCF, including, as applicable, all partners, controlling shareholders or members, directors, trustees and officers;
(C) The location(s) of the corporate office(s) of the Proposed Owner;
(D) The proposed governance structure and, if investor-owned, a description of the mechanism for ensuring community involvement in policy matters;
(E) A summary of the agreement setting forth the terms of the proposed Transaction, including the cost and means of financing the Transaction and a reasonably estimated projection of the impact of the transaction cost on charges for services to be provided;
(F) A description of any capital expenditures contemplated as a part of the Transaction;
(G) A reasonable projection of utilization and financial results for the HCF to include any expected material changes in the number of beds or services, inpatient admissions, and outpatient visits, total facility revenues, and expenses for the two-year period following the Transaction; and
(H) A reasonably estimated projection of uncompensated care (bad debt and charity) and the nature of any proposed changes to admission policies and hours of operations over the two-year period following the Transaction.
(2) The Proposed Owner shall certify in writing, as part of the notification required in subsection (b)(1) of this section, that:
(A) For the five-year period following the Transaction, the percentage of uncompensated care (charity and bad debt) provided each year to the population served by the HCF will be equal to or exceed the average of the percentage of uncompensated care provided by the HCF for the two fiscal years immediately preceding the acquisition;
(B) The Proposed Owner agrees to abide by all applicable conditions contained in certificates of need issued to the HCF, for such time and to such extent as those conditions would be applicable to the current owners in the absence of the Transaction; and
(C) All existing financial and admission policies affecting access to the HCF based upon a patient’s ability to pay for services or treatment will be maintained for 2 years following transaction and will be consistent with existing law.
(3) If SHPDA determines that the notification is incomplete with respect to the information required under subsection (b)(1) and (2) of this section, SHPDA shall have 10 days from the filing of the notification to inform the Proposed Owner that the notification is incomplete, otherwise the information shall be deemed complete on the 11th day. The Proposed Owner must file the additional information within 15 days of such notification from SHPDA, provided that the initial filing date shall be deemed the filing date of the notification for all purposes of computation of time under this section.
(4) SHPDA shall call an information hearing, which shall be completed within 50 days following the filing of the notification provided under subsection (b)(1) of this section and after the Proposed Owner files additional information pursuant to subsection (b)(3) of this section. The hearing shall include a presentation by the Proposed Owner, describing its plans and addressing the certifications provided pursuant to subsection (b)(2) of this section, and receipt of testimony from affected persons.
(5) Except as otherwise provided in this subsection, SHPDA shall issue a certificate of need for the change in effective control no later than 60 days after the date of the initial filing with SHPDA of the notification required under subsection (b)(1) of this section by the Proposed Owner unless SHPDA finds, based upon clear and convincing evidence, the following:
(A) The Proposed Owner has not filed the notification described in subsection (b)(1) and (2) of this section;
(B) The Proposed Owner has not participated in the hearing required by subsection (b)(3) of this section;
(C) The notification is not reasonably consistent with the most current state health plan adopted in final form by SHPDA after April 9, 1997, or with any annual implementation plan for such state health plan;
(D) The notification is not reasonably consistent with the record of review;
(E) In the case of an investor-owner Proposed Owner, the mechanisms for local input in policy matters are not reasonable, except that such mechanisms shall not be required to be greater than those imposed upon comparable HCFs subject to CON review;
(F) The Proposed Owner is not financially sound or does not have the financial and management capability to operate the HCF being acquired; or
(G) The acquisition costs and projected operational costs would substantially and negatively impact the Proposed Owner’s ability to comply with the certifications required under subsection (b)(2) of this section.
(6) SHPDA shall notify the Proposed Owner of any deficiency in the notification or of any proposed negative finding. If, by the 60th day, the Proposed Owner has not provided the required notification or addressed SHPDA’s proposed negative findings, SHPDA shall, upon request by the Proposed Owner, provide the Proposed Owner a reasonable opportunity to provide additional information to SHPDA, to participate in the required hearing, or to complete its required notice in order to cure any negative finding. SHPDA shall act upon such additional submission within 15 days. If the Proposed Owner does not respond to the SHPDA notice of deficiency within 6 months of the notification from SHPDA, SHPDA shall close the proceeding. If, following submission by the Proposed Owner, SHPDA finds by clear and convincing evidence that any one or more of these standards is not met, SHPDA shall require that the Proposed Owner obtain a certificate of need in accordance with the provisions of § 44-409, except that the letter of intent and public hearing requirements shall be waived. If no action is taken by SHPDA within the initial prescribed 60-day time frame, the certificate of need shall be deemed to be issued and approved on the 61st day following the filing of the notification required in subsection (b)(1) of this section. If no action is taken by SHPDA within the additional 15-day time frame provided following an additional submission by the Proposed Owner under subsection (b)(5) of this section, the certificate of need shall be deemed to be issued and approved on the 16th day following the filing of the additional submission under this subsection (b)(5) of this section.
(7) In granting a certificate of need under this subsection, SHPDA shall impose no application or process requirements, apply any review criteria, or impose any conditions except as provided in subsection (b) of this section.
(8) The Office of Attorney General for the District of Columbia may seek injunctive relief from a court of competent jurisdiction if it determines that a person is operating an HCF in violation of the certifications made under this subsection.
(9) The requirements of this subsection shall be effective without adoption by SHPDA of implementing regulations.
(c) Any person proposing to close permanently or to terminate operation of a HCF or health service shall notify the SHPDA of the intention to close or terminate operation no later than 90 days prior to the proposed closing, and obtains its approval, and shall provide the SHPDA with any information that may be requested as established in the rules promulgated to implement the provisions of this chapter. The information shall include, but not be limited to, the reasons for the closure or termination of operation, the number of patients to be affected by the closure, and the provisions being made to provide for their continuing care. When notice of closure of a HCF or health service is received, the SHPDA shall provide assistance for an orderly transition of the patient load to the extent possible, which may include organizing meetings with affected stakeholders and providing planning and technical assistance for possible patient load transition, and, if the notice of closure is approved by SHPDA, continue to assist in the orderly transition by overseeing the placement of patients into new HCFs in a manner that ensures that the health and well-being of the patients is protected.
(d) A conversion or acquiring of effective control, as defined in § 44-401(1), of a nonprofit HCF shall not be approved by the Attorney General for the District of Columbia unless charitable assets of the HCF have been adequately protected pursuant to the provisions of the Healthcare Entity Conversion Act of 1997.
(Apr. 9, 1997, D.C. Law 11-191, § 7, 43 DCR 4535; Oct. 23, 1997, D.C. Law 12-32, § 12(a)(2), 44 DCR 4819; Apr. 13, 2005, D.C. Law 15-354, § 64(a), 52 DCR 2638; Apr. 11, 2019, D.C. Law 22-290, § 101(b), 66 DCR 1668.)
1981 Ed., § 32-356.
Effect of Amendments
D.C. Law 15-354 substituted “Attorney General for the District of Columbia” for “Corporation Counsel”.
For temporary (90 days) amendment of this section, see § 2 of Clarification of Hospital Closure Procedure Congressional Review Emergency Amendment Act of 2019 (D.C. Act 23-10, Feb. 25, 2019, 66 DCR 2461).
References in Text
The “Healthcare Entity Conversion Act of 1997,” referred to in (d), is D.C. Law 12-32.