Michigan’s Certificate of Need Program

Michigan DepartmentMichigan Department

of Community Healthof Community Health

2

Federal Certificate of Need Background

Dist. of Columbia and New York developed CON in 1964.

Federally mandated CON programs were established as a national health care cost containment strategy. The 1974 National Health Planning and Resources Development Act mandated that states have CON programs to be eligible for certain public health funds.

In 1986, the federal mandate for CON was not renewed.

CON regulations are structured, in principle, to improve access to quality health care services while containing costs. Health care organizations are required to demonstrate need before investing in a regulated facility, service or equipment.

Since the repeal of the federal mandate, 37 states have retained some form of a CON program.

3

Certificate of Need ProgramsRange of Services Reviewed Under State CON Programs

Source: 2002 National Directory of Health Planning, Policy and Regulatory Agencies, American Health Planning Association.

Non-CON States Less than 10 weighted services 10-19 weighted services More than 20 weighted services

State Rank/State Services Rank/State Services Rank/State Services

Arizona 24 Arkansas 7 9 North Carolina 25 1 Maine 24

California 25 Oklahoma 6 10 Mississippi 18 2 Connecticut 26

Colorado 26 Iowa 9 11 D.C. 23 3 Georgia 25

Idaho 27 Virginia 20 12 Tennessee 20 4 Alaska 27

Indiana 28 Florida 11 13 Alabama 20 5 West Virginia 26

Kansas 29 Montana 7 14 Maryland 17 6 Vermont 25

Minnesota 30 Massachusetts 16 15 Rhode Island 19 7 Missouri 21

N. Mexico 31 Delaware 8 16 New York 25 8 South Carolina 19

N. Dakota 32 Wisconsin 4 17 Hawaii 25

Pennsylvania 33 Nevada 7 18 Michigan 18

S. Dakota 34 Nebraska 2 19 Kentucky 18

Texas 35 Oregon 2 20 Washington 15

Utah 36 Ohio 1 21 Illinois 19

Wyoming 37 Louisiana 2 22 New Jersey 12

Note: Ranking/groupings based on weighted services. 23 New Hampshire 14

4

Michigan CON Legislation

Public Act 368 of 1978 mandated the Michigan CON program.

The CON Reform Act of 1988 was passed to create a systematic way to develop standards and reduce the number of services requiring a CON. The act also created the CON Commission. The commission, whose membership is appointed by the Governor, is responsible for developing and approving CON review standards.

Public Act 619 of 2002 modified several sections the Public Health Code pertaining to CON including, but not limited to,:

No CON required for non-clinical capital expenditure projects Redefined “rural county” Expanded exceptions to CON under MCL 333.22209 Expanded the CON Commission Requires review of standards every three years and changes method for

developing standards

5

The following projects must obtain a CON [M.C.L. 333.22209(1)]: Acquire an existing health facility or begin operation of a health

facility at a site that is not currently licensed for that type Make a change in the bed capacity of a health facility Initiate, replace, or expand a covered clinical service Make a covered capital expenditure

Capital expenditure projects (i.e., construction, renovation) must obtain a CON if the projects exceeds [M.C.L. 333.22203]:

$2,622,500 for clinical service areas, as of January 2004

Note: Thresholds are indexed annually by the department based on the Consumer Price Index.

Michigan CON ProgramRequirements and Standards

6

Michigan CON ProgramRequirements and Standards continued…

Air ambulances (helicopters) Cardiac catheterization, including

diagnostic, therapeutic, angioplasty, PCI, and electrophysiology

Computed tomography (CT) scanners

Hospital beds – general acute care Magnetic resonance imaging (MRI) Megavoltage radiation therapy

(MRT) Neonatal intensive care units (NICU) Nursing home/hospital long-term

care beds

Open heart surgery Positron emission tomography

(PET) Psychiatric beds – acute inpatient Surgical services – hospital and

free-standing Transplantation services – bone

marrow, including peripheral stem cell, heart, heart-lung, lung, liver, and pancreas

Urinary lithotripters

Covered Items, Clinical Services and Equipment:

7

Michigan CON ProgramApplication Review Process

Contact from Applicant(phone, meeting, letter)

CON Review Section (CRS)

Application to CRS

Request for additionalinformation

Additional informationreview

Application deemedcomplete

Request info. to CRS& local rev. agency

Application forms sent toapplicant within 15 days

CRS receives LOI

LOI pkg. sent toapplicant

30 days

No Application to localreview agency

Recommendations to CRSin advance of decision date

30 days (non-substantive)

90 days (substantive/comparative)

continued

8

Michigan CON ProgramApplication Review Process continued…

9

Michigan CON ProgramApplication Review Process continued…

10

Michigan CON ProgramApplication Review Process continued…

11

Designated Application DatesNon-substantive review – any workdaySubstantive review – 1st workday of monthComparative review – 1st workday ofFeb., June, or Oct.

Non-substantive Review

Proposed decision

Final decision

45 days

5 daysDenial

Proposed decision

Substantive Individual Review

Final decision

Approval

5 days

120 days

15 days

Comparative grouping

Single proposeddecision

Potential Comparative

Not comparative Comparative

30 days

120 daysFinal decision

Hearing

Request for hearing

Waive mandatoryhearing date

Reconsideration

Approval

Final decision Final decision

90 daysRequest for

hearing

15 days

90 days unless waived

Continued

Michigan CON ProgramApplication Review Process continued…

12

MDCH and the Office of the Attorney General provide input (administrative feasibility and legality) regarding any

proposed standards.

Commission approves, disapproves, or revises proposed standards.

Commission, standard advisory committee, MDCH or private consultant develops draft standards. MDCH also provides staff assistance.

Proposed standards are disapproved by Commission.

Commission meets to approve, disapprove, or revise proposed FINAL review standards.

Sent to joint legislative committee for 30-day comment period.

Commission holds public hearing.

Standards may be returned for further work.

Review standards become effective and sent to the Office of Regulatory Reform to be published.

Standards are disapproved by Commission. Standards are approved by Commission. Approved standards sent to joint legislative committee and Governor for 45-day review period.

Standards are approved by the joint legislative committee and the Governor.

Standards are disapproved by the joint legislative committee and the Governor.

Standards do not become effective or returned to the Commission for further work.

Proposed standards may be returned to MDCH, standard advisory committee, or

private consultant for further work.

Proposed standards are approved by Commission.

Michigan CON CommissionStandards Development Process

13

Michigan CON ProgramSurveillance Tools

Tools: Annual Hospital Statistical Questionnaire

Hospitals, freestanding surgical facilities, freestanding MRT facilities, and freestanding CT facilities

Annual PET scanner survey MRI electronic database Michigan Inpatient Data Base (MIDB)

General Measures: Measures for Select Services: Infrastructure (i.e., equipment) Wait times Procedures Staffing Weighted volumes Certifications

Michigan CON Authority: Act 368, P.A. 1978 – “ A health facility or agency shall provide the department with data and statistics required to enable the department to carry out functions required by federal and state law, including rules and regulations.”

14

Michigan CON ProgramWeb Site: www.michigan.gov/con

Highlights

Listserv

Standards

Laws

Rules

Forms

Notices

FQA

Contact Info

Updates

15

Question & Answers

Contact Information:

Certificate of Need Program

Lewis Cass Building

320 S. Walnut Street, 3rd Floor

Lansing, Michigan 48913

Phone: 517/241-3344

Web Site: www.michigan.gov/con