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PWF Consulting
A Review of the Joint Commission on Health Care’s 2000 Certificate of Public Need Deregulation Plan
Certificate of Public Need Task Force July 1, 2015
2PWF Consulting
A Review of JCHC’s 2000 COPN Deregulation Plan
• Legislative Authority and Directive
• Process
• Deregulation Plan
• Proposed Legislation and Budget Amendments
3PWF Consulting
Legislative Authority and Directive
• Senate Bill 337 (Martin), as introduced, would have repealed most of COPN program
• Approved legislation directed JCHC to develop a “transition plan” to eliminate COPN program – “shall begin on July 1, 2001, and be completed by July 1, 2004”
• Key provisions of plan to include:– Meeting health care needs of indigent and uninsured populations;– Establishing licensure standards and providing adequate oversight for
deregulated services;– Determining effect of deregulation on academic health centers, long-term
care facilities, rural hospitals; and– Monitoring effect of deregulation during and after transition period
4PWF Consulting
A Review of JCHC’s 2000 COPN Deregulation Plan
• Legislative Authority and Directive
• Process
• Deregulation Plan
• Proposed Legislation and Budget Amendments
5PWF Consulting
JCHC Process for Developing COPN Deregulation Plan • COPN Subcommittee formed, chaired by Senator Bolling
– 12 other members– Five Subcommittee meetings during summer and fall of 2000
• Facilitation process used to involve stakeholders in addressing key issues and developing deregulation plan– Three “key” stakeholders (MSV, VHHA, VHCA)– Independent Facilitator hired by JCHC and jointly paid by JCHC
and three key stakeholder groups– Numerous other groups participated in the facilitation, including
VCU, UVA, various physician specialty societies, Virginia Association of Health Plans, Virginia Poverty Law Center, Virginia Association of Regional Health Planning Agencies
• Approximately 40 meetings were held to develop plan
6PWF Consulting
Facilitation Workgroups
Workgroup Areas of Focus
Access• Access to care for uninsured and indigent citizens• All health care providers share in meeting the needs
of indigent citizens
Quality• Licensure standards for deregulated services• Adequate oversight of deregulated services to
protect public health and safety
Medical Education • Impact of deregulation on academic health centers
Fair Payment/Funding Workgroup
• Impact of deregulation on state-funded health care financing programs
• Market rates paid by state-funded health care financing programs
7PWF Consulting
A Review of JCHC’s 2000 COPN Deregulation Plan
• Legislative Authority and Directive
• Process
• Deregulation Plan
• Proposed Legislation and Budget Amendments
8PWF Consulting
Five Overall Goals of Deregulation Plan Adopted by Workgroup & JCHC
1. Offer more choices to patients with better information about the value of services in all care settings
2. Ensure access to essential health services for all Virginians, especially indigent and uninsured, is preserved
3. Provide strong quality protections that correspond to service intensity and/or patient risk, and apply similarly across all settings
4. Provide financial support for indigent care and medical education costs at the academic health centers
5. Ensure Commonwealth’s financing programs pay market rates
9PWF Consulting
Deregulation Plan to be Completed in Three Phases
Cost Impact
Complexity/Risk
Phase I• MRI• CT• PET• Non-cardiac nuclear
imaging• Lithotripsy
Phase II• Cardiac catheterization• Radiation therapy• Gamma knife surgery
Phase III• Ambulatory surgery
centers• OB Services• Neonatal special care• Organ transplants• Open-heart surgery
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Deregulation Plan Retained COPN Requirements for Certain Facilities
• Nursing Homes
• Hospital beds
• Mental Health and Substance Use Disorder Facilities
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Implementation of Each Phase Contingent on Specific Actions
• Certain Quality and Data Reporting provisions are applicable in all three phases– New licensure systems for each deregulated service must be in
place and applied equally across all care settings– Providers of newly deregulated services are required to submit
claims data, additional quality outcome information for selected high risk procedures (if applicable), and annual financial information on level of indigent care
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Phase I• MRI• CT• PET• Non-cardiac
nuclear imaging• Lithotripsy
Specific Actions to be Accomplished in Phase I
• Legislation codifies state policy to fully fund indigent care at academic health centers– VCU: $12.5 million (GF) – UVA: $2.3 million (GF)– EVMS: $7.1 million (GF)
• Initial phase of improving adequacy of Medicaid hospital reimbursement (2000 JLARC study)– $12 million (GF)
• Initial phase of eliminating faculty-earned clinical revenues to fund core cost of undergraduate medical education– $6.5 million (GF)
• JLARC study of Medicaid physician reimbursement
Note: Items shown above reflect only the major provisions to be accomplished
13PWF Consulting
Phase I• MRI• CT• PET• Non-cardiac
nuclear imaging• Lithotripsy
Specific Actions to be Accomplished in Phase II• Continued action to fully fund indigent care at academic
health centers• Initial phase of increasing Medicaid eligibility for caretaker
adults (from 32%-66% FPL)– $27 million (GF)
• Initial phase of increasing Medicaid eligibility for ABDs (from 80%-90% FPL)– $11 million (GF)
• 2nd phase of improving adequacy of Medicaid hospital reimbursement (2000 JLARC study)– $12 million (GF) (additional cost of above Phase I)
• 2nd phase of eliminating faculty-earned clinical revenues to fund core cost of undergraduate medical education– $6.5 million (GF) (additional cost above Phase I)
Note: Items shown above reflect only the major provisions to be accomplished
Phase II• Cardiac
catheterization• Radiation therapy• Gamma knife
surgery
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Phase I• MRI• CT• PET• Non-cardiac
nuclear imaging• Lithotripsy
Specific Actions to be Accomplished in Phase III• Continued action to fully fund indigent care
at academic health centers• 2nd phase of increasing Medicaid eligibility
for caretaker adults (from 66%-100% FPL)– $27 million (GF) (additional costs above Phase II)
• 2nd phase of increasing Medicaid eligibility for ABDs (from 90%-100% FPL)– $11 million (GF) (additional costs above Phase II)
Note: Items shown above reflect only the major provisions to be accomplished
Phase III• Ambulatory surgery
centers• OB Services• Neonatal special
care• Organ transplants• Open-heart surgery
15PWF Consulting
Summary of Fiscal Impact of Deregulation Plan
General Funds (Millions)Incremental Amounts
Funding Provision Phase I Phase II Phase III
Indigent Care (AHCs) $22.0Full funding continues
(Amt. unknown)Full funding continues
(Amt. unknown)
Medicaid (Caretaker Adult Coverage) $27.0 $27.0
Medicaid (ABD Coverage) $11.0 $11.0
Undergraduate Medical Education $6.5 $6.5
Medicaid Reimbursement
(Hospitals) $12.0 $12.0
Medicaid Reimbursement
(Physicians) Amt. Unknown Amt. Unknown
Total $40.5 $56.5 $38.0
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A Review of JCHC’s 2000 COPN Deregulation Plan
• Legislative Authority and Directive
• Process
• Deregulation Plan
• Proposed Legislation and Budget Amendments
17PWF Consulting
JCHC Proposed Legislation to Implement Deregulation Plan; Companion Bills Failed
• Public comments, received from 308 individuals and organizations, generally supported the JCHC Deregulation Plan; no clear opposition
• House Bill 2155 (Morgan) and SB 1084 (Bolling) were introduced to implement deregulation plan– Budget amendments to fund each component of the plan were submitted in
both houses
• Legislation was reported and re-referred by House HWI (20-2) and Senate Education & Health (10-0-2); bills were left in Appropriations and Finance
• Deregulation plan was not implemented
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