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04.04.2022 Let the Health Care Planning Begin in North Carolina By: Joy Heath & Joel L. Johnson

North Carolina’s State Health Planning process is now in full swing. Spring petitions and proposals have been received and commenters have had their chance to weigh in. Now the Committees are set to convene to discuss the Agency reports and potentially vote to approve, deny, or alter the Agency’s recommendations. While the 2023 planning process moves into high gear, a range of Certificate of Need (CON) filing opportunities span across the remaining months of 2022. 

What’s in Play Via the Spring Petitions?

One petition proposed a change that would give providers the option to apply to increase neonatal bed capacity without awaiting or competing for a general acute care bed need determination. This could allow smaller hospitals that currently offer labor and delivery services (but not inpatient neonatal care) to develop Level II services. Another proposal calls for the deletion of Policy AC-5 which addresses Replacement of Acute Care Bed Capacity.

Another petition seeks implementation of a new policy to allow the development or expansion of kidney disease treatment centers at skilled nursing facilities. Yet another proposal seeks adjustment to the need determination methodology for adult care home beds, commonly known as assisted living beds. Also to be considered is a proposal to change the cardiac catheterization need determination methodology.    

Other proposals address planning for Magnetic Resonance Imaging (MRI) scanners. One petitioner seeks revisions to Policy TE-3 which provides a plan exemption for fixed MRI scanners. Another petitioner asks that a new Policy TE-4 be included in the State Plan to allow for what’s described as “substitutions” of vendor-owned mobile MRI scanners with provider-owned mobile MRI scanners. 

What’s the Timetable?

The first Committee meetings will be held in April and will include a discussion of the Agency reports on each of the above petitions and, possibly, votes. All committee votes are in the form of recommendations to the full State Health Coordinating Council (SHCC). Committees may refrain from voting and request further study and consideration before making a recommendation to the SHCC.

The Technology and Equipment Committee will be the first of the Committees to convene on April 6. The Long-Term Care and Behavioral Health Committee meets April 14, followed by the Acute Care Services Committee on April 16. Each Committee will convene a second meeting in May (Technology and Equipment on May 4; Acute Care Services on May 10 and Long-Term Care and Behavioral Health on May 19). 

When’s the Big Event?

Following the Committee meetings, the SHCC meets June 1, 2022 - the final act of the SHCC during this meeting is adopting the Proposed State Medical Facilities Plan.       

Each year, providers across the state and across the health care delivery spectrum anxiously await release of the Proposed State Medical Facilities Plan which provides a first look at the opportunities to apply for CON approvals for a range of capabilities, including, among others, operating rooms, PET and MRI scanners, nursing homes and assisted living facilities, as well as home health and hospice offerings. 

Some industry observers expect to see a PET scanner need determination in most, if not all, of the Health Service Areas in our State. If the assisted living methodology is changed as proposed in a spring petition, a new methodology could alter the typically lackluster need determinations for new assisted living beds. Changes proposed in the MRI arena, if adopted, could markedly change the landscape for MRI filing opportunities. The petition proposing to allow new kidney disease treatment capabilities at nursing homes would be a significant alteration to the long-standing approach to identification of need for such services.

After the Proposed State Medical Facilities Plan is posted on or about July 1, the planning process will move forward with the summer petitions and proposals and a subsequent Comment period. Providers should mark their calendars with the July 27, 2022 5:00 p.m. deadline for submission of comments and petitions for adjustments to need determinations. The deadline for comments on summer petitions falls on August 10, 2022 at 5:00 p.m.   

The SHCC will hold at least six public hearings across the month of July to address petitions and any issues related to the Proposed State Medical Facilities Plan. The Committees meet again in September, and the process culminates with the final SHCC meeting in the fourth quarter. 

The final State Medical Facilities Plan will contain the need determinations that delineate the number of additional facilities, operating rooms, equipment, or services that may be applied for and approved during 2023. The final State Medical Facilities Plan will set the review schedule for the year. The deadline for the Governor to approve the 2023 State Medical Facilities Plan is December 31, 2022.  

What Remains in 2022?   

Nursing Home & Assisted Living Beds

In July 2022, CON Applications may be filed seeking approval for some or all of the 36 new nursing home beds shown as needed in Cabarrus County. Cabarrus County is home to seven nursing homes plus numerous assisted living facilities. Although the need for new nursing home beds in Cabarrus County was identified per a petition, any provider can apply. Also, in July 2022, applicants can pursue approval of 10 new adult care home beds in Swain County. Swain County has one nursing home and one assisted living facility.

Hospice Inpatient Beds

In July 2022, applications will be accepted from providers proposing to develop some or all of the 10 hospice inpatient beds shown as needed in Cumberland County. Presently, there are no hospice inpatient facilities in Cumberland County.    

Operating Rooms & Acute Care Beds

In August 2022, applications will be received from those vying for CON approval for two new operating rooms for Wake County. Also, in August 2022, hospitals may file CON Applications seeking additional acute care bed capacity for Wake County; CON Applications proposing new beds for Mecklenburg County are due in October.

Psychiatric & Chemical Dependency Beds

The 2022 State Medical Facilities Plan reflects the SHCC decision to eliminate the need determination methodologies for psychiatric beds and chemical dependency treatment center beds, effectively allowing providers to pursue development of these capabilities anywhere in the State. Proposals for these beds are considered in “Category C” – the Review Schedule calls for the receipt of such proposals in July and/or August 2022. 

Cardiac Catheterization & Linear Accelerator

In August 2022, proposals to develop new cardiac catheterization equipment in Mecklenburg County, either at a hospital site or in a licensed ambulatory surgical facility (excluding endoscopy-only facilities), will be received. Also, in August 2022, applicants may seek CON approval for a linear accelerator for Service Area 7, which is comprised of Anson, Mecklenburg, and Union Counties. 

MRI Scanners

Three MRI scanner Application opportunities remain in 2022. In September, applications will be received from those proposing a new MRI to serve the multi-county service area that includes the counties of Pasquotank, Camden, Currituck, and Perquimans. In October, applicants can file to seek CON approval for a new MRI scanner for Mecklenburg County and/or for the Pitt/Greene/Hyde/Tyrell multi-county service area. 

While the balance of 2022 and the year ahead promise to offer novel opportunities for both existing providers and new market entrants to propose a range of new health care capabilities in various areas of North Carolina, much is left to be determined in the months ahead. 

For more information, please contact Joy Heath at 919.981.4001 or jheath@williamsmullen.com, or Joel Johnson at 919.981.4082 or jljohnson@williamsmullen.com.