H.__Seek a balance, to the extent a balance assists in achieving the purposes of this subsection, between competition and regulation in the provision of health care; and

I.__Promote the development of primary and secondary preventive health care services.

§328.__Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

1.__ Access to care.__"Access to care" means the timely ability to obtain needed personal health services to achieve the best possible health outcomes balanced by the health system's resource limitations. Access to care may be influenced by many factors, including, without limitation, travel, distance, waiting time, available resources, availability of a source of care and the health status of the population served.

2.__Ambulatory surgical facility.__"Ambulatory surgical facility" means a facility, not part of a hospital, that provides surgical treatment to patients not requiring hospitalization. "Ambulatory surgical facility" does not include the offices of private physicians or dentists, whether in individual or group practice.

3.__Annual operating costs.__For purposes of section 329, subsection 4, paragraph B, "annual operating costs" means the total incremental costs to the institution that are directly attributable to the addition of a new health service.

4.__Capital expenditure.__"Capital expenditure" means an expenditure, including a force account expenditure or predevelopment activities, that under generally accepted accounting principles is not properly chargeable as an expense of operation and maintenance and, for the purposes of this chapter, includes capitalized interest on borrowed funds and the fair market value of any property or equipment that is acquired under lease or comparable arrangement or by donation.

5.__Construction.__"Construction," when used in connection with "health care facility," means the establishment, erection, building, purchase or other acquisition of a health care facility.

6.__Development.__"Development," when used in connection with health service, means the undertaking of those activities that on their completion will result in the offering of a new health service to the public.

7.__Expenditure minimum for annual operating costs.__ "Expenditure minimum for annual operating costs" means, for services commenced after October 1, 1998, $350,000 for the 3rd fiscal year, including a partial first year.

8.__Generally accepted accounting principles.__"Generally accepted accounting principles" means accounting principles approved by the American Institute of Certified Public Accountants.

9.__Health care facility.__"Health care facility" means a hospital, psychiatric hospital, nursing facility, kidney disease treatment center including a free-standing hemodialysis facility, rehabilitation facility, ambulatory surgical facility, independent radiological service center, independent cardiac catheterization center or cancer treatment center.__"Health care facility" does not include the office of a private physician or physicians or a dentist or dentists, whether in individual or group practice.

10.__Health maintenance organization.__"Health maintenance organization" means a public or private organization that:

A.__Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health services:__usual physician services, hospitalization services, laboratory services, x-ray services, emergency and preventive health services and out- of-area coverage;

B.__Is compensated, except for copayments, for the provision of the basic health services to enrolled participants on a predetermined periodic rate basis; and

C.__Provides physicians' services primarily through physicians who are either employees or partners of the organization or through arrangements with individual physicians or one or more groups of physicians.

11.__Health need.__"Health need" means a situation or a condition of a person, expressed in health outcome measures such as mortality, morbidity or disability, that is considered undesirable and is likely to exist in the future.

12.__Health planning.__"Health planning" means data assembly and analysis, goal determination and the formulation of action recommendations regarding health services.

13.__Health services.__"Health services" means clinically related services that are diagnostic, treatment, rehabilitative services or nursing services provided by a nursing facility.__ "Health services" includes alcohol abuse, drug abuse and mental health services.

14. Health status. "Health status" means patient or population measures, or both, of good and poor health practices, rates of death and disease, both chronic and infectious, and the prevalence of symptoms or conditions, or both, of illness and wellness.

15.__Hospital.__"Hospital" means an institution that primarily provides to inpatients, by or under the supervision of physicians, diagnostic services and therapeutic services for medical diagnosis, treatment and care of injured, disabled or sick persons or rehabilitation services for the rehabilitation of injured, disabled or sick persons.__"Hospital" also includes psychiatric and tuberculosis hospitals.

16.__Major medical equipment.__"Major medical equipment" means a single unit of medical equipment or a single system of components with related functions used to provide medical and other health services that costs $1,000,000 or more.__"Major medical equipment" does not include medical equipment acquired by or on behalf of a clinical laboratory to provide clinical laboratory services if the clinical laboratory is independent of a physician's office and a hospital and has been determined to meet the requirements of the United States Social Security Act, Title XVIII, Section 1861(s), paragraphs 10 and 11.__In determining whether medical equipment costs more than $1,000,000, the cost of studies, surveys, designs, plans, working drawings, specifications and other activities essential to acquiring the equipment must be included.__If the equipment is acquired for less than fair market value, the term "cost" includes the fair market value.

17.__Nursing facility.__"Nursing facility" means any facility defined under section 1812-A.

18.__Modification.__"Modification" means the alteration, improvement, expansion, extension, renovation or replacement of a health care facility or health maintenance organization or portions thereof, including the initial equipment, and the replacement of equipment or existing buildings.

19.__Obligation.__An "obligation" for a capital expenditure that is considered to be incurred by or on behalf of a health care facility:

A.__When a contract, enforceable under Maine law, is entered into by or on behalf of the health care facility for the construction, acquisition, lease or financing of a capital asset;

B.__When the governing board of the health care facility takes formal action to commit its own funds for a construction project undertaken by the health care facility as its own contractor; or

C.__In the case of donated property, on the date on which the gift is completed under applicable Maine law.

20.__Offer.__"Offer," when used in connection with "health services," means that the health care facility or health maintenance organization holds itself out as capable of providing or having the means to provide a health service.

21.__Person.__"Person" means an individual; trust or estate; partnership; corporation, including associations, joint stock companies and insurance companies; the State or a political subdivision or instrumentality of the State, including a municipal corporation of the State; or any other legal entity recognized by state law.

22.__Predevelopment activity.__"Predevelopment activity" means any appropriately capitalized expenditure by or on behalf of a health care facility made in preparation for the offering or development of a new health service for which a certificate of need would be required and arrangements or commitments made for financing the offering or development of the new health service and includes site acquisitions, surveys, studies, expenditures for architectural designs, plans, working drawings and specifications.

23.__Primary and secondary preventive services.__"Primary preventive services" means health care services including, without limitation, health education that seeks to prevent the occurrence of disease or injury, generally reducing exposure or risk factor levels that cause disease.__"Secondary preventive services" means health care services that seek to treat and control the severity of disease processes in their early stages before the onset of acute symptoms and events.

24.__Project.__"Project" means any acquisition, capital expenditure, new health service or change in a health service,

predevelopment activity or other activity that requires a certificate of need under section 329.

25.__Rehabilitation facility.__"Rehabilitation facility" means an inpatient facility that is operated for the primary purpose of assisting in the rehabilitation of disabled persons through an integrated program of medical services and other services that are provided under competent professional supervision.

26.__Replacement equipment.__"Replacement equipment" means a piece of capital equipment that replaces another piece of capital equipment that performs essentially the same functions as the replaced equipment.

§329.__Certificate of need required

A person may not enter into any commitment for financing a project that requires a certificate of need or incur an expenditure for the project without having sought and received a certificate of need, except that this prohibition does not apply to obligations for financing conditioned upon the receipt of a certificate of need or to obligations for predevelopment activities.

A certificate of need from the department is required for:

1.__Transfer of ownership; acquisition by lease, donation, transfer; acquisition of control.__Any transfer of ownership or acquisition under lease or comparable arrangement or through donation or any acquisition of control of a health care facility under lease, management agreement or comparable arrangement or through donation that would have required review if the transfer or acquisition had been by purchase, except in emergencies when that acquisition of control is at the direction of the department;

2.__Acquisitions of certain major medical equipment.__ Acquisitions of major medical equipment with a cost in the aggregate of $1,000,000 or more. The use of major medical equipment on a temporary basis in the case of a natural disaster, major accident or equipment failure and the use of replacement equipment do not require a certificate of need;

3.__Capital expenditures.__Except as provided in subsection 6, the obligation by or on behalf of a health care facility of any capital expenditure of $2,000,000 or more.__Capital expenditures in the case of a natural disaster, major accident or equipment failure for replacement equipment or for parking lots and garages, information and communications systems and physician office space do not require a certificate of need;

4.__New health service.__The offering or development of any new health service.__For purposes of this section, "new health service" includes only the following:

A.__The obligation of any capital expenditures by or on behalf of a health care facility of $100,000 or more that is associated with the addition of a health service that was not offered on a regular basis by or on behalf of the health care facility within the 12-month period prior to the time the services would be offered; or

B.__The addition of a health service that is to be offered by or on behalf of a health care facility that was not offered on a regular basis by or on behalf of the health care facility within the 12-month period prior to the time the services would be offered and that, for the 3rd fiscal year of operation, including a partial first year, following addition of that service, is projected to entail annual operating costs of at least $350,000.

A certificate of need is not required for a health care facility that extends a current service within the defined primary service area of the health care facility by purchasing within a 12-month time period new equipment costing in the aggregate less than $1,000,000;

5.__Changes in bed complement.__An increase in the existing licensed bed complement or an increase in the licensed bed category of a health care facility greater than 10%;

6.__Nursing facilities.__The obligation by a nursing facility, when related to nursing services provided by the nursing facility, of any capital expenditures of $500,000 or more.

A certificate of need is not required for a nursing facility to convert beds used for the provision of nursing services to beds to be used for the provision of residential care services.__If such a conversion occurs, public funds are not obligated for payment of services provided in the converted beds;

7.__Other circumstances.__The following circumstances:

A.__Any proposed use of major medical equipment to serve inpatients of a hospital, if the equipment is not located in a health care facility and was acquired without a certificate of need, except acquisitions exempt from review under subsection 2 or 3; or

B.__If a person adds a health service not subject to review under subsection 4, paragraph A and not subject to review under subsection 4, paragraph B at the time it was established and not reviewed and approved prior to establishment at the request of the applicant, and its actual 3rd fiscal year operating cost exceeds the expenditure minimum for annual operating costs in the 3rd fiscal year of operation following addition of these services; and

8.__Related projects.__Any projects that the department determines are related projects if such projects, considered in the aggregate, would otherwise require a certificate of need under this section.

§330.__Exceptions

Notwithstanding section 329, the requirements of this Act do not apply with respect to:

1.__Healing through prayer.__A health care facility operated by a religious group relying solely on spiritual means through prayer for healing;

2.__Activities; acquisitions.__Activities or acquisitions by or on behalf of a health maintenance organization or a health care facility controlled, directly or indirectly, by a health maintenance organization or combination of health maintenance organizations to the extent mandated by the National Health Policy, Planning and Resources Development Act of 1974, as amended, and its accompanying regulations;

3.__Home health care services.__Home health care services offered by a home health care provider;

4.__Hospice.__Hospice services and programs;

5.__Assisted living.__Assisted living programs and services regulated under chapter 1665; and

6.__Existing capacity.__The use by an ambulatory surgical facility licensed on January 1, 1998 of capacity in existence on January 1, 1998.

§331.__Subsequent review

When a certificate of need has been issued and changes occur as specified in this section, a subsequent review is required.

1.__Criteria for subsequent review. The following activities require subsequent review and approval, if the department has previously issued a certificate of need and if within 3 years after the approved activity is undertaken:

A.__There is a significant change in financing;

B.__There is a change affecting the licensed or certified bed capacity as approved in the certificate of need;

C.__There is a change involving the addition or termination of the health services proposed to be rendered;

D.__There is a change in the site or the location of the proposed health care facility; or

E.__There is a substantial change proposed in the design of the health care facility or the type of construction.

2.__Procedures for subsequent review.__Any person proposing to undertake any activity requiring subsequent review and approval shall file with the department, within 30 days of the time that person first has actual knowledge of the circumstances requiring subsequent review, a notice setting forth the following information:

A.__The nature of the proposed change;

B.__The rationale for the change including, where appropriate, an explanation of why the change was not set forth in the original application or letter of intent; and

C.__Other pertinent detail subject to the procedures and criteria set forth in section 334.

The department shall, within 30 days of receipt of the information, advise that person in writing whether the proposed change is approved.__If not approved, the application must be treated as a new application under this Act.__If approved, the department shall amend the certificate of need as appropriate.

§332.__Procedures after voluntary nursing facility reductions

1.__Procedures.__A nursing facility that voluntarily reduces the number of its licensed beds for any reason except to create private rooms may convert the beds back and thereby increase the number of nursing facility beds to no more than the previously licensed number of nursing facility beds, after obtaining a certificate of need in accordance with this section, as long as the nursing facility has been in continuous operation and has not

been purchased or leased.__To convert beds back to nursing facility beds under this subsection, the nursing facility must:

A.__Give notice of its intent to preserve conversion options to the department no later than 30 days after the effective date of the license reduction; and

B.__Obtain a certificate of need to convert beds back under section 334, except that, if no construction is required for the conversion of beds back, the application must be processed in accordance with subsection 2.

2.__Expedited review.__Except as provided in subsection 1, paragraph B, an application for a certificate of need to reopen beds reserved in accordance with this section must be processed on an expedited basis in accordance with rules adopted by the department providing for shortened review time and for a public hearing if requested by a directly affected person.__The department shall consider and decide upon these applications as follows:

A.__Review of applications that meet the requirements of this section must be based on the requirements of section 334, subsection 3, except that the determinations required by section 334, subsection 3, paragraph B must be based on the historical costs of operating the beds and must consider whether the projected costs are consistent with the costs of the beds prior to closure, adjusted for inflation; and

B.__Conversion of beds back under this section must be requested within 4 years of the effective date of the license reduction.__For good cause shown, the department may extend the 4-year period for conversion for one additional 4-year period.

3.__Effect on other review proceedings.__Nursing facility beds that have been voluntarily reduced under this section must be counted as available nursing facility beds for the purpose of evaluating need under section 334 as long as the nursing facility retains the ability to convert them back to nursing facility use under the terms of this section, unless the nursing facility indicates, in response to an inquiry from the department in connection with an ongoing project review, that it is unwilling to convert them to meet a need identified in that project review.

4.__Rulemaking.__Rules adopted pursuant to this section are major substantive rules as defined by Title 5, chapter 375, subchapter II-A.

§333.__Nursing facility projects

Nursing facility projects that propose to add new nursing facility beds to the inventory of nursing facility beds within the State may be grouped for competitive review purposes consistent with appropriations made available for that purpose by the Legislature.__A nursing facility project that proposes renovation, replacement or other actions that will increase Medicaid costs may be approved only if appropriations have been made by the Legislature expressly for the purpose of meeting those costs, except that the department may approve, without a prior appropriation for the express purpose, projects to reopen beds previously reserved by a nursing facility through a voluntary reduction pursuant to section 332, if the annual total of reopened beds approved does not exceed 100.

§334.__Approval; record

1.__Basis for decision.__The commissioner shall approve an application for a certificate of need if the commissioner determines that the project meets the conditions set forth in subsection 3.

The commissioner shall make a determination on whether conditions set forth in subsection 3 have been met based solely upon the record created by the department in the course of its review of an application.

Except as otherwise provided in this Act, only a person who is a full-time employee of the department with responsibilities for the certificate of need program, a consultant to the project on matters or a member of the Maine Health Policy Advisory Committee pursuant to section 337 may communicate with the commissioner regarding any application for a certificate of need or any letter of intent.__Nothing in this section limits the authority and obligation of the staff of the department with responsibility for the certificate of need program to meet with, or otherwise communicate with, any person who is not a department employee and who wants to provide information to be considered in connection with an application for a certificate of need.__A person who is not a department employee may not communicate with any department staff regarding the merits of a certificate of need application except for the purpose of placing that person's views in the application record.__All communications with department staff responsible for the certificate of need program from any person, who is not a department employee, that the department staff reasonably believes is intended to influence the analyses relating to or the decision regarding any application for certificate of need must be memorialized by that department staff and that memorial must be made part of the application record.

The commissioner's determination must be in writing and must contain appropriate references to the record.__If the application is denied, the decision must specifically address comments received and made part of the record that favor granting the application.__If the application is approved, the decision must specifically address comments received and made part of the record that favor denial of the application.

2.__Record. The record created by the department in the course of its review of an application must contain the following:

A.__The application and all other materials submitted by the applicant for the purpose of being made part of the record;

B.__All information generated by or for the department in the course of gathering material to assist the commissioner in determining whether the conditions for granting an application for a certificate of need have or have not been met.__This information may include, without limitation, the report of consultants, memoranda of meetings or conversations with any person interested in commenting on the application, letters, memoranda and documents from other interested agencies of State Government and memoranda describing officially noticed facts;

C.__Stenographic or electronic recordings of any public hearing held by the commissioner or the staff of the department at the direction of the commissioner regarding the application;

D.__Stenographic or electronic recording of any public informational meeting held by the department pursuant to section 336, subsection 4;

E.__Any documents submitted by any person for the purpose of being made part of the record regarding any application for a certificate of need or for the purpose of influencing the outcome of any analyses or decisions regarding an application for certificate of need, except documents that have been submitted anonymously. Such source-identified documents automatically become part of the record upon receipt by the department; and

F.__Preliminary and final analyses of the record prepared by the staff.

The record first opens on the day the department publishes its notice that an application for a certificate of need has been filed.__From that day, all of the record is a public record, and any person may examine that record and purchase copies of any or

all of that record during the normal business hours of the department.

The record is closed 10 days after a public notice of the closing of the record has been published in the a newspaper of general circulation in Kennebec County, in a newspaper published within the service area of the project and on the department's publicly accessible site on the Internet, as long as such notice is not published until after the preliminary staff analysis of the application is made part of the record.

3.__Review; approval.__Except as provided in section 335, the commissioner shall issue a certificate of need if the commissioner determines and makes specific written findings regarding that determination that:

A.__The applicant is fit, willing and able to provide the proposed services at the proper standard of care as demonstrated by, among other factors,__whether the quality of any health care provided in the past by the applicant or a related party under the applicant's control meets industry standards;

B.__The economic feasibility of the proposed services is demonstrated in terms of the:

(1)__Capacity of the applicant to support the project financially over its useful life, in light of the rates the applicant expects to be able to charge for the services to be provided by the project; and

(2)__Applicant's ability to establish and operate the project in accordance with existing and reasonably anticipated future changes in federal, state and local licensure and other applicable or potentially applicable rules;

C.__There is a public need for the proposed services; as demonstrated by, among other things:

(1)__Whether, and the extent to which, the project will substantially address specific health problems as measured by health needs in the area to be served by the project;

(2)__Whether the project will have a positive impact on the health status indicators of the population to be served;

(3)__Whether the services affected by the project will be accessible to all residents of the area proposed to be served; and

(4)__Whether the project will provide demonstrable improvements in quality and outcome measures applicable to the services proposed in the project;

D.__The proposed services are consistent with the orderly and economic development of health facilities and health resources for the State as demonstrated by:

(1)__The impact of the project on total health care expenditures after taking into account, to the extent practical, both the costs and benefits of the project and the competing demands in the local service area and statewide for available resources for health care;

(2)__The availability of state funds to cover any increase in state costs associated with utilization of the project's services; and

(3)__The likelihood that more effective, more accessible or less costly alternative technologies or methods of service delivery may become available; and

E.__The applicant will dedicate the equivalent of 5% of the first full-year operating expenses and 3% of operating expenses each year thereafter that the project is in service to measurable primary or secondary prevention programs relevant to the service or technology of the certificate of need application and available at no cost to uninsured individuals with incomes at or below 150% of the federal poverty level.

4.__Conditional approvals.__The commissioner may grant an application subject to conditions that relate to the criteria for approval of the application.

5.__Emergency certificate of need.__Upon the written or, if more practical, the oral request of an applicant, the department shall immediately determine whether an emergency situation exists and upon finding that an emergency situation does exist shall issue a certificate of need for a project necessary on account of the emergency situation. The scope of the certificate of need may not exceed that which is necessary to remedy or otherwise effectively address the emergency situation.__The certificate of need may be subject to conditions consistent with the purpose of this Act that do not interfere with the applicant's ability to respond effectively to the emergency.

The commissioner shall find an emergency situation exists whenever the commissioner finds that an applicant has demonstrated:

A.__The necessity for immediate or temporary relief due to a natural disaster, a fire, an unforeseen safety consideration, a major accident, equipment failure, foreclosure, receivership or an action of the department or other circumstances determined appropriate by the department;

B.__The serious adverse effect of delay on the applicant and the community that would be occasioned by compliance with the regular requirements of this chapter and the rules adopted by the department; and

C.__The lack of substantial change in the facility or services that existed before the emergency situation.

§335.__Simplified review and approval process

Notwithstanding the requirements set forth in section 334, the department shall conduct a simplified review and approval process in accordance with this section.

1.__Maintenance projects.__The commissioner shall issue a certificate of need for a project that primarily involves the maintenance of a health facility if the commissioner determines that the project:

A.__Will result in no or a minimal additional expense to the public or to the health care facility's clients;

B.__Will be in compliance with other applicable state and local laws and regulations; and

C.__Will significantly improve or, in the alternative, not significantly adversely affect the health and welfare of any person currently being served by the health care facility.

2.__Life safety codes; previous certificate of need.__The commissioner shall issue a certificate of need for a project that is required solely to meet federal, state or local life safety codes if the project involves a health facility, major medical equipment or a new health service that has previously received a certificate of need.

3.__Acquisition of control.__The commissioner shall issue a certificate of need for a project that involves the acquisition of control of a health facility when the acquisition consists of

a management agreement or similar arrangement and primarily involves the day-to-day operation of the facility in its current form, if the commissioner determines that:

A.__The applicant is fit, willing and able to provide the project services at the proper standard of care as demonstrated by, among other factors, whether the quality of health care provided by the applicant or a related party under the applicant's control meets or in the past met industry standards; and

B.__The project is economically feasible in light of its impact on:

(1)__The operating budget of the facility and the applicant;

(2)__The applicant's ability to establish and operate the facility in accordance with federal and state licensure rules; and

(3)__The applicant's ability to operate the facility without increases in the facility's rates beyond those that would otherwise occur absent the acquisition.

4.__Capital expenditures.__The commissioner shall issue a certificate of need for a proposed capital expenditure upon determining that:

A.__The capital expenditure is required to eliminate or prevent imminent safety hazards, as defined by applicable fire, building or life safety codes and regulations; to comply with state licensure standards; or to comply with accreditation or certification standards that must be met to receive reimbursement under the United States Social Security Act, Title XVIII or payments under a state plan for medical assistance approved under Title XIX of that Act;

B.__The economic feasibility of the project is demonstrated in terms of its effects on the operating budget of the applicant, including its existing rate structure;

C.__There remains a public need for the service to be provided; and

D.__The corrective action proposed by the applicant is the most cost effective alternative available under the circumstances.

§336.__Application process for certificate of need

1.__Letter of intent.__Prior to filing an application for a certificate of need, an applicant shall file a letter of intent with the department.__The letter of intent forms the basis for determining the applicability of this chapter to the proposed expenditure or action.__A letter of intent is deemed withdrawn one year after receipt by the department, unless sooner superseded by an application, except that the applicant is not precluded from resubmitting the same letter of intent.

2.__Application filed.__Upon a determination by the department that a certificate of need is required for a proposed expenditure or action, an application for a certificate of need must be filed with the department if the applicant wishes to proceed with the project.__Prior to filing a formal application for a certificate of need, the applicant shall meet with the department staff in order to assist the department in understanding the application and to receive technical assistance concerning the nature, extent and format of the documentary evidence, statistical data and financial data required for the department to evaluate the proposal.__Prior to the technical assistance meeting, but subsequent to receipt of the letter of intent, the department shall issue a letter or checklist, or both, to an applicant that stipulates and clarifies what will be required in the application.__The department may not accept an application for review until the applicant has satisfied this technical assistance requirement.__The technical assistance meeting must take place within 30 days after receipt of the letter of intent.

3. Application content.__An application for a certificate of need must describe with specificity how the proposed project meets each of the conditions for granting a certificate of need required by this Act.__A statement or statements that the project will meet the conditions without supporting facts backed by relevant documentation and analyses constitute sufficient cause to deny the application.__An application subject to full review must contain, among other information:

A.__Measures of health status relevant to the services or technology of the application in the service area of the applicant. These measures must, to the extent possible, be the same as those contained in relevant reports issued by the United States Department of Health and Human Services;

B.__Valid and replicable quantitative measures of public health need relevant to the new services or technology in the service area of the applicant for the services. The department may adopt a specific set of measures for certain services when there is consensus in the literature;

C.__Quality assurance processes, including measures to be used to assess the new services or technology.__The applicant shall specify the quality assurance process including the measures to be used, the time period for reporting and the mechanism that will be used to disseminate quality assurance information to the State and the public. Quality assurance information that the applicant does not consider appropriate for public dissemination must be justified. When possible, quality measures must be similar to those required by hospital accreditation organizations;

D.__Current and planned prevention programs relevant to the services or technology of the application and the population to be served. To the extent possible, this information must contain effectiveness measures for existing and planned programs; and

E.__Information as to how the proposed services or technology fits into any relevant published health planning report specifically identified by the department.

4.__Public notice; public informational meeting.__Within 5 business days of the filing of a certificate by an applicant that a complete certificate of need application is on file with the department, public notice that the application has been filed and that a public informational meeting must be held regarding the application must be given by publication in a newspaper of general circulation in Kennebec County and in a newspaper published within the service area in which the proposed expenditure will occur. The notice must also be provided to all persons who have requested notification by means of asking that their names be placed on a mailing list maintained by the department for this purpose. This notice must include:

A.__A brief description of the proposed expenditure or other action;

B.__A description of the review process and schedule;

C.__A statement that any person may examine the application, submit comments in writing to the department regarding the application, and examine the entire record assembled by the department at any time from the date of publication of the notice until the application process is closed for comment; and

D.__The time and location of the public informational meeting and a statement that any person may appear at the meeting to question the applicant regarding the project or

the department regarding the conditions that the applicant must satisfy in order to receive a certificate of need for the project.

An application is certified as complete when the applicant delivers to the department a certification in writing that states that the application should be considered complete by the department.__Nothing in the foregoing sentence precludes an applicant from submitting information subsequent to the applicant's certification that is responsive to any concern, issue, question or allegation of facts contrary to those in the application by the department or any person whether or not those concerns, issues, questions or allegations have been made part of the record.

The department shall make an electronic or stenographic record of the public informational meeting.

5.__Voluntary withdrawal of application.__During the review period, prior to the date that department staff submit a final report to the commissioner, an applicant may withdraw an application without prejudice.__Written notice of the withdrawal must be submitted to the department.__A withdrawn application may be resubmitted at a later date, as a new application, requiring a new letter of intent and new filing fees, docketing and review.

6.__Filing fee.__A nonrefundable filing fee must be paid at the time an application is filed with the department.

A.__The department shall establish minimum and maximum filing fees, pursuant to section 341, to be paid per application.

B.__If the approved capital expenditure or operating cost upon which the fees were based is higher than the initially proposed capital expenditure, then the filing fee must be recalculated and the difference in fees, if any, must be paid before the certificate of need may be issued.

§337.__Maine Health Policy Advisory Committee

The commissioner may establish a Maine Health Policy Advisory Committee to:

1.__Review.__Review proposed rules, criteria, standards and procedures; and

2.__Evaluate.__Evaluate new services, technology or research that could affect the cost, quality and access to care for residents of the State and that results, or is likely to or

should result, in keeping with the intent of this Act, in a certificate of need application.__This evaluation may involve holding public meetings.

§338.__Review process

1.__Review process.__The review process consists of an evaluation of the project application for a certificate of need by the department in light of:

A.__The application itself;

B.__Material collected or developed by or for the department staff to test the assertions in the application; and

C.__All comments received by any person regarding the project and any other material made part of the record.

2.__Public hearing.__The commissioner or the commissioner's designee may hold a public hearing regarding the application. An electronic or stenographic record of the public hearing must be made part of the record.

3. Preliminary staff analyses.__The department staff shall provide, as soon as practicable, its preliminary analyses of the application and the record to the applicant, the commissioner and any interested person. Notice of the availability of the analyses must be published in the Kennebec Journal and a newspaper of general circulation serving the area in which the project is to be located and on the department's publicly accessible site on the Internet.

4.__Final department staff analysis. A final department staff analysis must be submitted to the commissioner, together with the documentary record described in section 334, subsection 2, as soon as practicable after the closing of the record.

5.__Reviews.__To the extent practicable, a review must be completed and the commissioner shall make a decision within 90 days after the application has been certified as complete by the applicant.__The department shall establish criteria for determining when it is not practicable to complete a review within 90 days.__Whenever it is not practicable to complete a review within 90 days, the department may extend the review period for up to an additional 60 days.

The department may delay action on an otherwise complete application for up to 180 days from the time the application has been certified as complete by the applicant if the department finds that a public necessity exists.__For purposes of this

subsection, the department shall find that a public necessity exists if:

A.__The application represents a new service or technology not previously provided within the State;

B.__The__application represents a potential significant impact on health care system costs;

C.__The application represents a new service or technology for which a health care system need has not been previously established; or

D.__There are several applications for the same or similar projects before the department.

The department shall notify in writing the applicant and any other person who has requested in writing information regarding the application of the delay.

§338.__Reconsideration

1.__Reconsideration.__Any person directly affected by a review may, for good cause shown, request in writing a hearing for the purpose of reconsideration of the decision of the department to issue or to deny a certificate of need. The department, if it determines that good cause has been demonstrated, shall hold a hearing to reconsider its decision. A request for hearing for consideration must be received within 30 days of the department's decision. If the department determines that good cause for a hearing has been demonstrated, the hearing must commence within 30 days of receipt of the request.__A decision must be rendered within 60 days of the commencement of the hearing.__The decision may be rendered beyond this time period by mutual consent of the parties.__For purposes of this section, a request for a hearing is considered to show good cause if it:

A.__Presents significant, relevant information not previously considered by the department;

B.__ Demonstrates that there have been significant changes in factors or circumstances relied upon by the department in reaching its decision;

C.__Demonstrates that the department has materially failed to follow its adopted procedures in reaching its decision; or

D.__Provides other bases for a hearing that the department has determined constitute good cause.

2.__"Person directly affected by a review" defined.__For purposes of this section, a "person directly affected by a review" includes:

A.__The applicant;

B.__A group of 10 taxpayers residing or located within the health service area served or to be served by the applicant;

C.__A health care facility, a health maintenance organization or a health care practitioner that can demonstrate that it provides similar services or, by timely filing a letter of intent with the department for inclusion in the record, has indicated an intention to provide similar services in the future to patients residing in the health service area and whose services would be directly and substantially affected by the application under review;

D.__A 3rd-party payor, including, without limitation, a health maintenance organization, who pays health care facilities for services in the health service area in which the project is proposed to be located and whose payments would be directly and substantially affected by approval or disapproval of the application under review; and

E.__A person who can demonstrate a direct and substantial effect upon that person's health care as a result of approval or disapproval of an application for a certificate of need.

§340.__Remedy

Any person aggrieved by a final decision of the department made under the provisions of this Act is entitled to review in accordance with Title 5, chapter 375, subchapter VII.__A decision of the department to issue a certificate of need or to deny an application for a certificate of need is not considered final until the department has taken final action on a request for reconsideration under section 339.

A decision by the department is not final when opportunity for reconsideration under section 339 exists with respect to matters involving new information or changes in circumstances.__When new information or changes in circumstances are not alleged by the applicant or other person aggrieved by the decision, a person aggrieved by a decision of the department may, at its option, seek reconsideration under section 339 or may seek direct judicial review under this section.

In civil actions involving competitive reviews of proposals to construct new nursing facility beds, the court shall require the party seeking judicial review to give security in such sums as the court determines proper for the payment of costs and damages that may be incurred or suffered by any other party who is found to have been wrongfully delayed or restrained from proceeding to implement the certificate of need, except that, for good cause shown and recited in the order, the court may waive the giving of security. A surety upon a bond or undertaking under this paragraph submits the surety to the jurisdiction of the court and irrevocably appoints the clerk of the court as the agent for the surety upon whom any papers affecting liability on the bond or undertaking may be served. The liability of the surety may be enforced on motion without the necessity of an independent action.__The motion and such notice of the motion as the court prescribes may be served on the clerk of the court who shall mail copies to the persons giving the security if their addresses are known.

§341.__Rules

The department shall adopt any rules, standards, criteria, plans or procedures that may be necessary to carry out the provisions and purposes of this Act.__The department shall provide for public notice and hearing on all proposed rules, standards, criteria, plans, procedures or schedules pursuant to Title 5, chapter 375. Unless otherwise provided by this chapter, rules adopted pursuant to this chapter are routine technical rules as defined by Title 5, chapter 375, subchapter II-A.__The department is authorized to accept any federal funds to be used for the purposes of carrying out this chapter.

§342.__Public information

The department shall prepare and publish at least annually a report on its activities conducted pursuant to this Act.

§343.__Conflict of interest

In addition to the limitations of Title 5, section 18, a member or employee of the department who has a substantial economic or fiduciary interest that would be affected by a recommendation or decision to issue or deny a certificate of need or who has a close relative or economic associate whose interest would be so affected is ineligible to participate in the review, recommendation or decision-making process with respect to any application for which the conflict of interest exists.

§344.__Division of project to evade cost limitation prohibited

No health care facility or other party required to obtain a certificate of need may separate portions of a single project into components, including, but not limited to, site facility and equipment, to evade the cost limitations or other requirements of section 329.

§345.__Scope of certificate of need

1.__Application determinative.__A certificate of need is valid only for the defined scope, premises and facility or person named in the application and is not transferable or assignable.

2.__Maximum expenditure.__In issuing a certificate of need, the department shall specify the maximum capital expenditures that may be obligated under this certificate.__The department shall prescribe, by rules adopted pursuant to section 341, the method to be used to determine capital expenditure maximums, establish procedures to monitor capital expenditures obligated under certificates and establish procedures to review projects for which the capital expenditure maximum is exceeded or expected to be exceeded.

3.__Periodic review.__After the issuance of a certificate of need, the department shall periodically review the progress of the holder of the certificate in meeting the timetable for making the service or equipment available or for completing the project specified in the approved application. A certificate of need expires if the project for which the certificate has been issued is not commenced within 12 months following the issuance of the certificate. The department may grant an extension of a certificate for an additional specified time not to exceed 12 months if good cause is shown why the project has not commenced.__ The department may require evidence of the continuing feasibility and availability of financing for a project as a condition for extending the life of the certificate.__In addition if on the basis of its periodic review of progress under the certificate, the department determines that the holder of a certificate is not otherwise meeting the timetable and is not making a good faith effort to meet it, the department may, after a hearing, withdraw the certificate of need.__The department shall in accordance with section 341 adopt rules for withdrawal of certificates of need.__ The applicant shall issue to the department periodic reports as designated in the certificate of need approval notification on the impact of the service on the health status, quality of care and health outcomes of the population served.__These reports may not be in less than 12-month intervals following the start of service approved in the certificate of need.

§346.__Withholding of license

No new health care facility, as defined in section 328, is eligible to obtain a license under the applicable state law if the facility has not obtained a certificate of need as required by this chapter. The license of any facility does not extend to include and may not otherwise be deemed to allow the delivery of any services, the use of any equipment that has been acquired, the use of any portion of a facility or any other change for which a certificate of need as required by this Act has not been obtained. Any unauthorized delivery of services, use of equipment or a portion of a facility or other change is in violation of the respective chapter under which the facility is licensed.

§347.__Withholding of funds

No health care facility or other provider may be eligible to apply for or receive any reimbursement, payment or other financial assistance from any state agency or other 3rd-party payor, either directly or indirectly, for any capital expenditure or operating costs attributable to any project for which a certificate of need as required by this Act has not been obtained. For the purposes of this section, the department shall determine the eligibility of a facility to receive reimbursement for all projects subject to the provisions of this Act.

§348.__Injunction

The Attorney General, upon the request of the department, shall seek to enjoin any project for which a certificate of need as required by this Act has not been obtained and shall take any other action as may be appropriate to enforce this Act.

§349.__Penalty

Whoever violates any provision of this chapter or any rate, rule or regulation pursuant to this Act is subject to a civil penalty payable to the State of not more than $5,000 to be recovered in a civil action.__The department may hold these funds in a special revenue account that may be used only to support certificate of need reviews, such as for hiring expert analysts on a short-term consulting basis.

§350.__Implementation reports

The holder of a certificate of need shall make a written report at the end of each 6-month period following its issuance regarding implementation activities, obligations incurred and expenditures made and any other matters as the department may require. A summary report must be made when the service or services for which the certificate of need was issued becomes operational. For a period of one year following the

implementation of the service or services for which the certificate of need was granted, the provider shall file, at 6- month intervals, reports concerning the costs and utilization.__ The department, in its rules, shall prescribe the form and contents of the reports. Any holder of a certificate of need that has been issued for the construction or modification of a facility or portion of a facility shall file final plans and specifications for the project with the department within 6 months, or any other time that the department may allow, following the issuance of the certificate for review by the department to determine that the plans and specifications are in compliance with the certificate of need and are in compliance with applicable licensure, life safety code and accreditation standards. The department may revoke any certificate of need it has issued when the person to whom it has been issued fails to file reports or plans and specifications required by this section on a timely basis.__The department shall review services that fall below the required volume and quality standards of a certificate of need.

Sec. 3. Preview. The Department of Human Services shall review its rules concerning Certificate of Need Health Care Facility/Agency Space and Needs Guidelines for which the department's Bureau of Medical Services, Division of Licensing and Certification has established service-specific licensure requirements and revise them as necessary to ensure that those guidelines are identical to the licensure requirements.

Sec. 4. Revisor's review; cross-references. The Revisor of Statutes shall review the Maine Revised Statutes and include in the errors and inconsistencies bill submitted to the Second Regular Session of the 120th Legislature pursuant to Title 1, section 94, any sections necessary to correct and update any cross-references in the statutes to provisions of law repealed in this Act.

SUMMARY

This bill repeals and replaces the Maine Certificate of Need Act of 1978. This bill requires that health prevention services be part of reviewable projects, clarifies when certificate of need waivers can be granted, clarifies the ability of the Department of Human Services to impose conditions on a certificate of need, changes certain dates, eliminates the Certificate of Need Advisory Committee and authorizes the commissioner to establish a new advisory committee.