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28 Pa. Code § 401.4. Criteria for Certificate of Need review.

§ 401.4. Criteria for Certificate of Need review.

 (a)  The following criteria, and standards applicable to each criterion, shall be used to review each application for a certificate of need. A certificate of need shall be recommended, approved and issued when the application substantially meets the following criteria provided that each decision, except in circumstances which pose a threat to public health, shall be consistent with the State Health Plan (SHP):

   (1)  Whether the relationship of the application to the applicable Health Systems Plan (HSP) and annual implementation plan has been considered.

   (2)  Whether the services are compatible with the long-range development plan of the applicant.

   (3)  Whether there is a need by the population served or to be served by the services or facility. Particular consideration shall be given to whether the proposed new institutional health service meets or contributes to the health related needs of members of medically underserved groups.

   (4)  Whether there is any appropriate, less costly or more effective alternative method of providing the services available.

   (5)  Whether the service or facility is economically feasible, considering anticipated volume of care, the capability of the service or facility and the availability of reasonable financing.

   (6)  Whether the proposed service or facility is financially feasible both on an intermediate and long term basis, and whether the impact on the cost of and charges for providing services by the applicant is appropriate.

   (7)  Whether the proposed service or facility is compatible with the existing health care system in the area. Consideration shall be given to efficiency and appropriateness of the existing services and facilities similar to those proposed.

   (8)  Whether the service or facility is justified by community need and within the financial capabilities of the institution both on an intermediate and long term basis and whether it will have an inappropriate, adverse impact on the overall cost of providing health services in the area.

   (9)  Whether there are available resources, including health manpower, management personnel and funds for capital and operating needs to the applicant for the provision of the services proposed to be provided, and whether there is a greater need for alternative uses for such resources for the provision of other health services. The effect on the clinical needs of health professional training programs in the medical service area, the extent to which health professional schools in the medical service area will have access to the services for training purposes and the extent to which the proposed service will be accessible to all the residents of the area to be served by such services shall also be considered in determining resources.

   (10)  Whether the proposed service or facility will have available to it appropriate ancillary and support services and an appropriate organizational relationship to such services.

   (11)  Whether the proposed services are consistent with the special needs and circumstances of those entities which provide services or resources both within and without the health service area in which the proposed services are to be located, including medical and other health professional schools, multidisciplinary clinics and specialty centers.

   (12)  Whether the proposed services are not incompatible with any biomedical or behavioral research projects designed for national need for which local conditions offer special advantages.

   (13)  Consideration of the need and availability in the community for services and facilities for allopathic and osteopathic physicians and their patients; and the religious orientation of the facility and the religious needs of the community to be served. This paragraph is not intended to create duplicative systems of care.

   (14)  Whether competitive factors relating to the supply of the health services being reviewed have been considered. Particular attention shall be given to the existence and capacity of market conditions, current or potential, in advancing the purposes of quality assurance, cost containment, and responsiveness to consumer preference. Particular attention shall also be given to the existence and capacity of utilization review programs and other public and private cost control measures to give effect to consumer preferences and to establish appropriate incentives for capital allocations.

   (15)  Whether consideration has been given to improvements or innovations in the financing and delivery of health services which would foster competition and serve to promote quality assurance, cost effectiveness, and responsiveness to consumer preferences.

   (16)  Whether, in the case of existing services for facilities, the quality of care provided by services or facilities in the past have been considered.

   (17)  Whether the special circumstances of applications with respect to the need for conserving energy have been considered.

 (b)  [Reserved].

 (c)  [Reserved].

 (d)  If the application is for a proposed service or facility which includes a construction project, a certificate of need shall be recommended, approved, and issued when the provisions of subsection (a) are satisfied and the following occur:

   (1)  The costs and methods of the proposed construction including the costs and methods of providing energy are appropriate.

   (2)  The impact of the costs of providing health services by the applicant resulting from the construction is found to be appropriate and the impact on the costs and charges to the public of providing health services by other persons is found to be not inappropriate.

 (e)  Whenever new institutional health services for inpatients are proposed, a finding will be made in writing by the Department:

   (1)  That the capital and operating costs, efficiency and appropriateness of the proposed new service and its potential impact on patient charges has been considered.

   (2)  That less costly alternatives which are more efficient and more appropriate to the inpatient service are not available and the development of the alternatives has been studied and found not practicable.

   (3)  That existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner.

   (4)  That in the case of new construction, alternatives to new construction such as modernization or sharing arrangements have been considered and have been implemented to the maximum extent practicable.

   (5)  That patients will experience serious problems in terms of cost, availability, accessibility or such other problems as may be identified in the applicable HSP or SHP in obtaining inpatient care of the type proposed if the proposed new services is not approved.

 (f)  With respect to any application regarding the offering, developing, constructing, or otherwise establishing of a health maintenance organization, all of the criteria applicable in subsection (a) shall apply unless the proposed entity is found to meet the requirements for exemption contained in 42 U.S.C.A. §  300m-6(a)(5) and (b)(1) and regulations adopted thereto.

 (g)  Notwithstanding subsections (a), (d) and (e), the following types of applications for certificates of need shall be approved unless the Department finds that the project in question is not needed or that it is not consistent with the SHP. Applications described in the following paragraphs will be approved only to the extent necessary to remedy the deficiencies they address:

   (1)  Application for a project which is necessary to eliminate or prevent imminent safety hazards as defined by the Life Safety Code or other appropriate codes or regulations.

   (2)  Application for a project which is necessary to comply with State licensure standards.

   (3)  Application for a project which is necessary to comply with accreditation standards, compliance with which is required to receive reimbursement or payments under Title XVIII or XIX of the Social Security Act (42 U.S.C.A. § §  300v—300y-11).


   The provisions of this §  401.4 issued under section 2102(a) and (g) of The Administrative Code of 1929 (71 P. S. §  532(a) and (g)); and section 201(14) of the Health Care Facilities Act (35 P. S. §  448.201(14)).


   The provisions of this §  401.4 amended April 13, 1984, effective April 14, 1984, 14 Pa.B. 1294. Immediately preceding text appears at serial pages (52911) to (52913).

Notes of Decisions

   The Department acted within its discretionary authority by accepting evidence as to the projected percentage of Medicare patients and the extent of the applicant’s contribution to medically undeserved groups. Morrisons Cove Home v. Department of Health, 593 A.2d 925 (Pa. Cmwlth. 1991); appeal denied 602 A.2d 863 (Pa. 1992).

Cross References

   This section cited in 28 Pa. Code §  401.5 (relating to Certificate of Need); and 28 Pa. Code §  401.7 (relating to simultaneous and comparative review).

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