NORTH CAROLINA GENERAL ASSEMBLY

1971 SESSION

 

 

CHAPTER 1164

HOUSE BILL 1398

 

 

AN ACT TO PROVIDE FOR ORDERLY AND ADEQUATE DEVELOPMENT OF HEALTH AND MEDICAL FACILITIES BY REQUIRING THE ISSUANCE OF A CERTIFICATE OF NEED.

 

The General Assembly of North Carolina enacts:

 

Section 1.  Chapter 90 of the General Statutes is hereby amended by inserting a new Article 21 to read as follows:

"Article 21

"Determination of Need for Medical Care Facilities

"§ 90-289.  Orderly Development of Medical Facilities. — The General Assembly of North Carolina declares that it is the public policy of the State to encourage the necessary and adequate' development of health and medical care facilities and that this development shall be accomplished in a manner which is orderly, timely, economical, and without unnecessary duplication of these facilities.

"§ 90-290.  Definitions. — (1) 'Approved areawide comprehensive health planning council' means a voluntary non-profit or public agency or organization that is recognized and approved by the Division of State Planning to function as a health planning agency.

(2)        'Medical care facility' refers to all of the following facilities licensed by State agencies: hospitals, nursing homes, intermediate care facilities and mental hospitals. The term includes facilities licensed by a State agency for inpatient care services, whether operated for profit or not, and whether private or owned by a local governmental unit. The term does not include physicians' offices, first-aid stations for emergency medical or surgical treatment or similar facilities where no overnight bed care is contemplated or performed.

(3)        'State Licensing Agency' refers to the State agency empowered to license a medical care facility.

"§ 90-291.  Certificate of need. — (a) Any other provisions of law to the contrary notwithstanding, such State agencies as administer licensing laws applicable to medical care facilities shall, as a precondition to issuing or continuing the license applied for, make a 'determination of need' with respect to any new construction, construction of additional bed capacity or conversion of existing bed capacity for which a license is requested.

(b)        Any proposed medical care facility, desiring to be licensed by a State licensing agency, shall make application for a certificate of need, as required by this Article, when such facility proposes new construction. Any existing medical care facility need not apply for a certificate of need except when the facility proposes new construction, construction of additional bed capacity, or the conversion of existing bed capacity to a different license category, except outpatient and emergency services. No certificate of need shall be required as a precondition to issuing or continuing a license to an existing medical care facility in the absence of new construction, construction of additional bed capacity or conversion of existing bed capacity to a different license category for the existing medical care facility.

(c)        Certificates of need shall be issued or denied, suspended, revoked or reinstated by such agencies having responsibility for licensing medical care facilities in accordance with law and rules and regulations of the licensing agency. No such certificates shall be denied except with the approval of the board or commission of a State agency licensing medical care facilities; and no decision shall be made contrary to the recommendations of an areawide health planning council unless such council has been notified by such board of the reason for its determination and has been granted full opportunity for hearing thereon by the board reviewing such a council's findings.

No certificate of need shall be issued unless the action proposed in the application for such certificate is necessary to provide new or additional inpatient facilities in the area to be served, can be economically accomplished and maintained, and will contribute to the orderly development of adequate and effective health services. In making such determinations, there shall be taken into consideration (1) the size, composition and growth of the population of the area to be served; (2) the number of existing and planned facilities of similar types; (3) the extent of utilization of existing facilities; and (4) the availability of facilities or service which may serve as alternatives or substitutes.

(d)        Applications for certificates of need shall be made to the State agencies licensing medical care facilities and shall be in such form and contain such information as such State agencies may prescribe. Upon receipt of an application, copies thereof shall be referred by such State licensing agency to the appropriate approved areawide health planning council for review and to the Division of State Planning for information.

The areawide health planning councils shall provide adequate mechanisms for full consideration of such application and for developing recommendations thereon. Such recommendations, whether favorable or unfavorable, shall be forwarded to the State licensing agency within 60 days of the date of referral of the application. A copy of the recommendations of the areawide comprehensive health planning council shall be forwarded to the applicant facility and to the Division of State Planning for information.

Recommendations by areawide comprehensive health planning councils and the State licensing agencies as to issuance of a certificate of need shall be governed by and based upon the principles (1) through (6) set forth in section (c) hereof.

(e)        Construction of a new medical care facility or expansion of an existing facility to gain additional bed capacity shall not be instituted or commenced after the effective date of this Article except upon application for and receipt of a certificate of need as provided herein: provided that in any case which, prior to the effective date of this Article, there has been proposed the construction of a new facility or the expansion of bed capacity of an existing facility and preliminary plans have been submitted to a State licensing agency, such proposed projects are exempt to the extent of initial construction or expansion provided for in such preliminary plans from the provisions of this Article.

(f)         A certificate of need shall be valid for such period of time, not to exceed two years, as may reasonably be required to complete preparation of detailed construction plans, secure necessary funds and building permits and undertake the construction of a medical facility in question: provided, that, with the advice of an areawide health planning agency or, when appropriate, the other resources utilized by a State licensing agency, the agency may renew the certificate for such further periods as may be reasonable where the applicant has shown that substantial and continuing progress towards commencement of construction has been demonstrated. A certificate of need shall be non-transferable.

(g)        The issuance of a certificate of need for a specific project in a medical facility's long-range plan shall not constitute a guarantee that all future proposals contained in that long-range plan will receive a certificate of need; however, the existence of previously certified projects that provide economies and improvement of service that may be derived from operation of joint, cooperative or shared health care resources and reduce the overall cost of future projects shall be taken into account by the areawide health planning council and the licensing agency in reviewing subsequent proposals.

(h)        Decisions as to a certificate of need may be made initially by administrative personnel of any board or agency to the extent permitted by law and the rules and regulations of the agency, provided that the rules and regulations shall provide for a final determination by the board or agency upon the written request of any interested party. Decisions concerning a certificate of need shall be appealable to, or subject to judicial review in, the courts as provided by law with regard to licensing decisions of any licensing agency.

(i)         The boards or commissions of State licensing agencies shall have authority to adopt policies, rules and regulations in order to effectuate the provisions and purposes of this Article."

Sec. 2.  This act shall become effective upon ratification.

In the General Assembly read three times and ratified, this the 21st day of July, 1971.