N.M. Code R. § 7.7.2.8

Current through Register Vol. 35, No. 11, June 11, 2024

Section 7.7.2.8 - REQUIRED LICENSURE BY THE DEPARTMENT

Procedures applicable after January 1, 2003: This section addresses the requirements of Section 24-1-5.8 NMSA 1978 (2003) and applies to local communities in which an acute-care hospital or a limited services hospital applies to be licensed or becomes initially licensed by the department at any time after January 1, 2003.

A. No hospital may operate in New Mexico unless it is licensed in accordance with the requirements of the New Mexico department of health.

B. The department shall issue a license to an acute-care hospital or a limited services hospital that meets the requirements of this rule and agrees to:

(1) continuously maintain and operate an emergency department that provides emergency medical services as defined in Section 7.7.2.38 NMAC; and

(2) when applicable, participate in the medicare, medicaid and county indigent care programs; and

(3) require a physician owner to disclose and document in the patient's medical record a financial interest in the hospital before referring a patient to the hospital.

C. Comply with the same quality standards applied to other hospitals.

D. Provide emergency services and general health care to a number of nonpaying patients and low-income reimbursed patients in the same proportion as the patients that are treated in acute-care hospitals in the local community, as determined by the department provided that the annual cost of the care required to be provided pursuant to paragraph (5) shall not exceed an amount equal to five percent of the hospital's annual net revenue for the previous fiscal year from audited financial statements.

E. Require a health care provider to disclose a financial interest before referring a patient to the hospital.

F. Reporting Requirements-General. The department, in accordance with the requirements of Section 24-1-5.8 NMSA 1978 (2003) requires the provision of information necessary to determine the annual cost of care for emergency and general health care to nonpaying and low-income reimbursed patients, including the number of nonpaying and low-income reimbursed patients treated, for the hospital's last full and audited accounting period. This period is called the most recent reporting year.

G. Reporting Hospitals. After January 1, 2003, an application to the department for an initial license by an acute-care hospital or limited services hospital in a local community will require the provision of information necessary to determine the annual cost of care for emergency and general health care to nonpaying and low-income reimbursed patients, including the number of nonpaying and low-income reimbursed patients treated, for the most current reporting year. The following hospitals must report to the department within 30 days of notice from the department of application for an initial license by an acute-care hospital or limited services hospital:

(1) all limited services hospitals in the local community;

(2) all acute-care hospitals in the local community;

(3) the limited services hospital applying for the initial license or the acute-care hospital applying for the initial license must submit a business plan that provides information necessary to determine the projected annual cost of care for emergency and general health care to nonpaying and low-income reimbursed patients, including the number of nonpaying and low-income reimbursed patients.

H. Reporting Requirements-Specific. The reporting requirement for information necessary to determine the annual cost of care for emergency and general health care to nonpaying and low-income reimbursed patients, including the number of nonpaying and low-income reimbursed patients treated, for the hospital's last full and audited accounting period, shall be satisfied by the provision of a certified statement by the hospital's chief executive officer and an independent certified public accountant attesting to the accuracy of the above required information, in the format determined by the department. The department shall conduct, as determined necessary, an independent audit to validate the information provided in the certified statement.

I. Determination of Proportionality by the Department. Based upon the certified statements and business plan(s) submitted, the department shall determine whether the application for licensure will provide emergency services and general health care to the number of nonpaying patients and low-income reimbursed patients in the same proportion as the proportion of nonpaying and low-income reimbursed patients that are treated in acute-care hospitals in the local community. Upon that determination by the department that the proportional requirements are met by the applicant and the receipt of a certified statement by the applicant's chief executive officer that the proportions will be maintained, and other rule requirements are met by the applicant, the department may issue a license consistent with the requirements of Section 24-1.5.8 NMSA 1978 (2003).

J. Limitation on Costs to Achieve Proportionality. The acute-care hospital or limited service hospital applying for licensure after January 1, 2003 shall submit to the department on an annual basis a certified statement from an independent certified public accountant setting out for that reporting yearthe hospital's annual cost incurred in the provisionof care to low-income reimbursed patients and to nonpaying patients, in order to satisfy the hospital's proportionality requirements. Submission to the department of such certified statement from an independent certified public accountant shall be made by the hospital within 30 days of its acceptance by the hospital's board of directors of the annual audited financial statement. The cost incurred in the provision of care to low-income reimbursed patients and nonpaying patients to satisfy the hospital's proportionality requirements is limited to five percent of the hospital's annual netrevenue.

K. Penalties for Non-Reporting. Failure to meet the reporting requirements set out in this rule within the proscribed timeliness may result in a civil monetary penalty not to exceed $500,000, in the suspension or revocation of the hospital's license, the referral to CMS for sanctions under the medicare and medicaid program.

L. Penalties for Failure to Provide Proportional Services. Failure by an acute-care hospital or limited service hospital applying for licensure after January 1, 2003 to provide proportional services to nonpaying and low-income reimbursed patients, as required by this section, in any year following licensure, as determined from the information submitted annually by the hospital's chief executive officer and an independent certified public accountant may result in the Department's imposition of one or more of the following penalties:

(1) a department-directed or department approved plan of correction in which the hospital's failure to provide proportional services to nonpaying and low-income reimbursed patients is remedied in subsequent years through the additional provision of services to nonpaying and low-income reimbursed patients beyond the proportion established by the department for such years;

(2) a civil monetary penalty not to exceed $500,000;

(3) suspension or revocation of the hospital's license; and

(4) referral to CMS for sanctions under the medicare and medicaid programs.

M. Annual Reporting. Acute-care hospitals or limited services hospitals licensed after January 1, 2003, and all acute-care hospitals in the local community, shall submit to the department on an annual basis a certified statement from an independent certified public accountant that sets out:

(1) the annual cost of care for emergency and general health care to nonpaying and low-income reimbursed patients;

(2) the annualnet patient service revenue;

(3) the number of nonpaying and low-income reimbursed patients treated; and

(4) the total number of patients treated.

N. Physician Owner Disclosure of Financial Interest Requirements, Disclosure Required. The physician owner of a limited services hospital or an acute-care hospital initially licensed by the department at any time after January 1, 2003 shall not make a referral of a patient for the provision of health care items or services to such limited services hospital or the acute-care hospital unless, in advance of any such referral, the referring physician owner discloses to the patient the existence and the nature of physician's ownership interest.

O. Disclosure of Financial Interest by a Physician Owner. The disclosure of financial interest by a physician owner, as required in this section, shall be made in writing, prior to or at the time of the referral, and shall be furnished to:

(1) the patient, or the patient's authorized representative, and

(2) the acute-care hospital or the limited services hospital licensed by the department at any time after January 1, 2003, in which the referring physician owner has a financial interest, for inclusion in the hospital's permanent patient's medical record; the acute-care hospital or the limited services hospital licensed by the department at any time after January 1, 2003 must permit inspection of the patient's medical record by authorized employees of the department to determine the hospital's compliance with this requirement, regardless of the hospital's deemed status.

P. Written Disclosure of Financial Interest by a Physician Owner. The written disclosure of financial interest by a physician owner, as required in this section, shall include:

(1) the physician's name, address, and telephone number;

(2) the name and address of the limited services hospital or the acute-care hospital licensed by the department at any time after January 1, 2003 to which the patient is being referred by the physician;

(3) the nature of the items or services, which the patient is to receive from the hospital to which the patient is being referred;

(4) the existence, nature and extent of the physician's financial interest in the hospital to which the patient is being referred; and

(5) a signed acknowledgement by the patient or the patient's authorized representative that the required disclosure has been furnished.

Q. To be approved by the New Mexico department of health, a hospital shall comply with these requirements and with all other applicable state laws and local ordinances. Staff of the hospital shall be licensed or registered, as appropriate, in accordance with applicable laws.

R. An application for licensure shall be submitted to the department on a form prescribed by the department. All applications must have the following information:

(1) name of administrator or chief executive officer;

(2) type of facility to be operated and types of services that will be offered;

(3) location of the hospital; and

(4) statement of ownership, which must include:

(a) the name and principle business address of each officer and director for the corporation;

(b) the name and business address of each stockholder owning 10 percent or more of the stock;

(c) copy of the current organizational chart; and

(d) such other information or documents as may be required by the department for the proper administration and enforcement of the licensing law and requirements.

S. The department shall review and make a determination on an application for licensure within 90 working days of receipt of the application.

T. Separate licenses shall be required for hospitals that are maintained on separate premises even though they are under the same management. This does not apply to outpatient departments or clinics of hospitals designated as such which are maintained and operated on separate premises within the same county or, if in another county, not to exceed a one hour drive time from the parent facility. Separate licenses shall not be required for separate buildings on the same grounds or adjacent grounds.

U. Applications submitted for proposed construction of new hospitals or additions to licensed hospitals shall include architectural plans and specifications.

V. Information contained in such applications shall be on file in the department and available to interested individuals and community agencies.

N.M. Code R. § 7.7.2.8

7.7.2.8 NMAC - Rp, 7.7.2.8 NMAC, 06-15-04; A, 03-15-06