216-40-10 R.I. Code R. § 22.5

Current through June 12, 2024

Section 216-RICR-40-10-22.5 - Formal Application

A. Application forms required of applicants will include but not be limited to items noted in § 22.5(C) of this Part and such additional information as may be deemed appropriate by the state agency. The state agency requires that an application fee be included with the materials filed for certificate of need review. Application fees shall be non-refundable. The application fee shall be paid by check made payable to the General Treasurer.

1. Except for applications that propose new or expanded tertiary or specialty care services, the submission of any application filed in accordance with §23-15-4(d) of the Act by any applicant except a health care facility owned and operated by the State of Rhode Island, shall include an application processing fee as set forth in the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health (Part 10-05-2 of this Title); except that a health care facility owned and operated by the State of Rhode Island shall be exempt from this application fee.

2. Except for applications that propose new or expanded tertiary or specialty care services, for any application filed in accordance with requirements of §23-15-5 (Expeditious Review) of the Act, any applicant except a health care facility owned and operated by the State of Rhode Island, shall include an application processing fee as set forth in the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health (Part 10-05-2 of this Title).

3. Applications that propose new or expanded tertiary or specialty care services as identified in § 22.2(A)(33) of this Part, except for any application from a health care facility owned and operated by the State of Rhode Island, shall include an application fee as set forth in the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health (Part 10-05-2 of this Title).

4. If during the course of review the capital cost of a proposal is increased as a result of a formal modification of the proposal which is accepted by the state agency, the applicant shall submit a supplemental application fee as set forth in the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health (Part 10-05-2 of this Title).

5. Any change order request submitted in accordance with § 22.16 of this Part that proposes to increase the total approved capital cost of a proposal shall include a supplemental application fee as set forth in the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health (Part 10-05-2 of this Title).

6. The state agency may in effectuating the purposes of the Act engage experts or consultants including, but not limited to, actuaries, investment bankers, accountants, attorneys, or industry analysts. Except for privileged or confidential communications between the state agency and engaged attorneys, all copies of final reports prepared by experts and consultants, and all costs and expenses associated with the reports, shall be public. All costs and expenses incurred under this provision shall be the responsibility of the applicant in an amount to be determined by the Director as he or she shall deem appropriate. No application made pursuant to the requirements of the Act shall be considered complete unless an agreement has been executed with the Director for the payment of all costs and expenses in accordance with this section. The maximum cost and expense to an applicant for experts and/or consultants that may be required by the state agency shall be twenty four thousand three hundred and twenty nine dollars ($24,329), provided however, that the maximum amount shall be increased by by the most recently available annual increase in the federal consumer price index as determined by the state agency.

B. A duplicate copy of each application together with all supporting documentation shall be kept on file in the state agency as a public record.

C. A formal application shall contain the following information as a minimum, regarding any new institutional health service or new health care equipment:

1. A brief description of the project setting forth the proposed new institutional health service or new health care equipment;

2. The nature of the additional health care services to be provided as a result of the proposed new institutional health service or new health care equipment including a description of proposed programs for service linkages with other health care facilities and programs for achieving continuity of patient care;

3. The proposed location of the new institutional health service and/or new health care equipment together with acceptable schematic plans consisting of single line drawings (if applicable);

4. Demonstration of a public need for the proposed new institutional health service or new health care equipment and for the scope thereof at the time and place and under the circumstances proposed, considering the availability of existing facilities, equipment and services, both statewide and on a local basis, which may serve as alternatives or substitutes for the whole or any part of the proposed new institutional health service or new health care equipment. In demonstrating public need, the applicant shall, as a minimum, perform the following:

a. Demonstrate the current service and target population involved and where appropriate, the projected population changes;

b. Delineate the health needs of the above populations;

c. Inventory the facilities or services currently available or proposed capable of meeting the types of health needs identified in § 22.5(C)(4)(b) of this Part;

d. Determine that portion of need which is not satisfied;

e. Identify and evaluate alternative proposals to satisfy the unmet need; and

f. Delineate the justification for the specific alternative proposed, including the scope thereof.

5. In the case of an application from an existing facility, an identification of any outstanding health care facility licensure deficiencies, citations or accreditation problems as may have been cited by the appropriate authority. In the case of proposed new health care facilities, a description of the quality assurance programs and/or activities which will relate to the application including both inter- and intra-facility programs and/or activities and outcome analysis whether mandated by the state or federal governments or voluntarily assumed. In the absence of such programs and/or activities, the applicant shall provide a full explanation of the reasons for such absence;

6. An analysis of the cost of the proposed new institutional health service or new health care equipment including all design fees and related expenses as enumerated in §§ 22.2(A)(20)(b)(1) and (b)(2) of this Part together with the relationship of such cost to the total value of the facility's physical plant, equipment, and health care services for both capital and operating costs. Such analysis shall include a reasonable forecast for inflation for the expected time period that is proposed to elapse between the submission of the application and the ultimate implementation date of the proposal;

7. A financial plan for operating and capital expenses and income for the period immediately prior to, during, and for three (3) years after complete implementation of the new institutional health service or new health care equipment;

8. A statement of the sources of funds for the new institutional health service or new health equipment showing funds derived from the applicant's own sources and from borrowing, and further showing:

a. Evidence of equity commitment;

b. Interest rate for the proposed debt financing;

c. Term for the proposed debt financing;

d. Principal amount borrowed;

e. Points, discounts, or origination fees, etc.;

f. A debt service schedule with annual outlays for principal and interest on the amount borrowed;

g. Evidence that alternative methods of financing have been investigated;

h. A comparison of the proposed method of financing with financing through a tax-exempt bonding authority;

i. An annual analysis of cash flow for the period between approval of the application and the third full year of operation of the new institutional health service or new health care equipment;

j. A depreciation schedule for the new institutional health service or new health care equipment showing useful life, method of depreciation, and salvage value;

k. Audited financial statements for the most recent year available;

l. Where refinancing of existing debt is contemplated, the original principal, current balance or principal, interest rates, term remaining, and documented justification for the refinancing contemplated;

m. With respect to a proposed lease, a comparison of the lease with the option of purchase, showing term of lease, annual lease payments, salvage value of equipment at lease termination, purchase options, value of insurance and service options contained in the lease, discounted cash flows under both lease and purchase arrangements, and discount rate;

n. Such financial indicators as may be requested by the state agency.

9. Evidence of site control - a fee simple or such other estate or interest in the site including necessary easements and rights of way, sufficient to assure use and possession for the purpose of the construction and operation of the facility (applicable only to new institutional health services involving new construction, a new premise, or a new licensed health care facility);

10. Evidence of the receipt from the applicable zoning authority of an application for zoning approval where such zoning approval is required by the municipality in which the facility is to be located (applicable only to new institutional health services involving new construction, renovations, new premises, or a new licensed health care facility). Failure to obtain needed zoning approval(s) within the time period allowed for project implementation as set forth in § 22.15(A)(7) of this Part or such time period for implementation as otherwise specifically set by the state agency in its decision shall be grounds for the withdrawal of any approval of any certificate of need granted subject to any zoning approvals;

11. Evidence from the appropriate state and/or municipal authority(ies) of an approved plan for water supply and sewage disposal (applicable to new institutional health services involving new construction or the expansion of patient occupancy);

12. Assurance of and/or evidence of compliance with other federal, state, or municipal fire, safety, use or occupancy or other health facility licensure requirements;

13. A projected manpower budget specifying the personnel required for the staffing of the proposed new institutional health services or new health care equipment and the contemplated program and plan for the recruitment and training of personnel (if applicable);

14. The estimated date of contract award (if applicable);

15. A statement of the arrangements for architectural services that have been made or are anticipated including the name of the architect (if applicable);

16. Evidence that the applicant has adequately planned for any temporary move or relocation of any facility or service which may be necessary during any proposed construction period, and evidence that the applicant has planned adequately to assure patient protection from noise, dust, etc. and to the extent possible, continuation of services during any proposed construction period (applicable only to new institutional health services involving construction or renovation);

17. A statement of the period of time estimated to be required for the completion of construction or implementation of a change in service after approval of the formal application;

18. An analysis and description of the impact of the proposed new institutional health service or new health care equipment, if approved, on the charges and anticipated reimbursements in any and all affected areas of the facility including consideration of such impacts on individual units of service and on an aggregate basis by individual class of payer.

19. From the applicant's perspective, comments on the affordability of the proposed new institutional health service or new health care equipment and of the scope thereof at the time and place and under the circumstances proposed considering the affordability of the proposal as defined in § 22.2(A)(5) of this Part, as applicable.

20. In the case of an application involving the establishment of a new health care facility, evidence must be provided that the applicant has legally incorporated said entity in accordance with the requirements of the General Laws of Rhode Island, or in the absence of such evidence, the applicant must provide written documentation attesting to the facts of the legal status of the proposed entity. The application shall provide full disclosure of all entities, subsidiaries, or persons within a legal chain of control which shall include, but is not limited to ownership type, the names, addresses, and principal occupations of all owners or holders of equity interest in the entity, proposed or established by-laws, and such other relevant related information as may be deemed necessary by the state agency for full disclosure.

21. In each application, the chief executive officer, the chairperson of the governing board, or other such person equating to the owner or person in charge of the applicant shall certify as to the completeness, accuracy, and veracity of the contents of the application; and

22. Any additional information pertaining to the new institutional health service or new health care equipment which the state agency may deem necessary for analysis of the applicable considerations outlined in § 22.10(L) of this Part.

D. Acceptance of the application "in form" by the state agency at the time of submission shall in no way be construed as indicating that additional information may not later be required and shall not be construed as having any effect on the merits of the application or of the contents thereof.

E. Notwithstanding the preceding application requirements or other certificate of need requirements contained in this Part, the state agency may periodically issue requests for proposals for the purpose of soliciting specific and limited certificate of need proposals from prospective applicants to address a potential need for development or expansion of a particular health care service or health equipment. The state agency shall prepare and publish the specifications for each request for proposal which shall include the following requirements:

1. The specific subject matter for development or expansion;

2. The selection criteria to be utilized;

3. The time frames for submission and project implementation;

4. Relevant cost and affordability considerations;

5. Selection process; and

6. Other pertinent review considerations and administrative procedures.

216 R.I. Code R. § 216-RICR-40-10-22.5