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March 24, 2008

Jeffrey Mark
Executive Secretary
Illinois Health Facilities Planning Board
535 West Jefferson
Springfield, IL 62761

Dear Jeff:

Before I provide more specific comments, you should be aware that, while this proposal is better than the previously published proposed changes to Part 1110, there continues to be considerable concern among our members. First, the rules are becoming more prescriptive and bureaucratic. Instead, hospitals are advocating for standards that focus on the need for the project and the overall size and cost. They should focus on those things that the Illinois Health Facilities Planning Board (IHFPB) members need to know to make good permit decisions. They should not try to substitute for the planning and project management that must occur at the facility level.

Second, there have been strong concerns expressed about specific new requirements such as the requirement to provide vacancy rate data. Our members are concerned that these data can be easily manipulated by potentially affected providers in an attempt to block an otherwise viable application.

Finally, there is concern that the IHFPB may be inclined to exercise less judgment on project applications once these rules are updated, simply because they have been recently updated. Because the occupancy standards, bed counts, and gross square footage requirements have not yet been revised, it will still be important for the Board to take factors beyond the specific need criteria into account when making permit decisions.

The following are my specific comments:

Section 1110.40 Classification of Projects and Applicable Review Criteria
With respect to the emergency classification, it is not clear what documentation you are expecting regarding the existence of the emergency conditions. I can only recall this classification being granted to one hospital. The emergency was that an airplane had hit the hospital’s roof causing extensive damage. Specific documentation should not be required. A phone call should be sufficient. In addition, these proposed rules will now limit the emergency classification to those conditions that did not exist more than 30 days prior to the receipt of the application for permit rather than more than 30 days prior to the request for emergency classification. This is a significant change. If there is extensive damage, a full application can very well take more than 30 days to write. The intent of this classification is to allow an emergency project to proceed as quickly as possible. It is rarely used. The proposed changes to the emergency classification appear to be addressing a problem that in fact does not exist. Recommendation: Delete the substantive change to this section.

The following are comments address the non-substantive classification:

Section 1110.130 Discontinuation – Review Criteria
With respect to the information requirements, language should be added to 1110.130(a)(2) to clarify that the applicant is required to submit the information in order to give the Board a better description of the discontinuation, but that not all of the potential services to be discontinued are subject to approval by the Board. Discontinuing an outpatient clinic or discontinuing an imaging service is not currently subject to permit, and the proposed rule should be clear that the intent is not to change this.

With respect to the reasons for discontinuation, the current requirement simply asks the applicant to provide the reasons for discontinuation. The proposed rule provides specific examples of reasons, which are unnecessary and create additional concerns.

A hospital proposing to close or proposing to discontinue a service does not need to be prompted regarding potentially appropriate reasons. If a facility is below target occupancy, this may not justify closure depending on the degree to which the facility falls short. Insufficient staff may be a good reason to close a facility or service, but the criterion establishes a standard whereby a vacancy rate over 10 percent might justify closure. I cannot recall a discontinuation project justified by insufficient staff. There have been examples of closing an OB service due to lack of physicians who deliver babies, but this will not be reflected in vacancy statistics. In addition, vacancy rates are determined based on a hospital’s own budget so there may not be consistency from one provider to another. Operating deficits may be a good reason to close a facility or service, but a hospital does not have to be prompted to supply this information.

Most troubling is that under your proposed rule, an applicant is required to document that the reason for closure has been in existence for 24 months. If a condition that might warrant discontinuation has been in effect for even less than a year, the hospital should be able to present a positive case for closure to the IHFPB. If a condition exists that decreases the standard of care for patients or that results in losses for the hospital, why should discontinuation be made more difficult, particularly when often there are others who are willing and able to absorb the patient volume? I would recommend that the applicant simply be required to explain the reasons for the discontinuation as the current rules require and allow the IHFPB to exercise appropriate judgment.

With respect to the impact on access review criterion, the current requirements address the availability of services in the planning area. The proposed rule adds a requirement that the applicant also must document that the service will be available within a 45 minute travel time. In addition, a market area definition is referenced but is not used. References to market area should be deleted. This criterion does not need to address market area.

In order to assess impact on access, the proposed rule also requires other providers within 45 minutes travel time to provide a statement regarding the impact of the discontinuation. Language should be added to the effect that if an applicant requests this documentation, but it is not provided, the presumption will be that there will be no negative impact.

Finally, under the list of relevant Parts and Subparts, reference is made to Subpart AF, the financial review criteria. It appears that you are proposing that Part 1120 be incorporated under Subpart AF. I would recommend against this since it leaves no room for the addition of new categories of service that the Board might determine are appropriate. In addition, since these proposed rules do not reflect the removal of the financial review criteria from Part 1120 and their incorporation into a new Subpart AF, this reference should be removed, both from this section and others where the reference appears.

Section 1110.210 Introduction (to Subpart C)
In Section 1110.210(b), the proposed rule states that each required point of information is intended to provide the IHFPB with an overview. The proposed rule goes on to say that the IHFPB will consider a project’s conformance with the information requirements as well as with the review criteria. If I understand your intent here, I would suggest that the rule simply state that the Board will consider whether all of the required information has been submitted and that the Board will consider a project’s conformance with the other applicable review criteria.

Under Section 1110.210(c)(1) there is a reference to Section 1110.232. This is incorrect and should be changed to Section 1110.234.

Section 1110.230 Project Purpose, Background and Alternatives – Information Requirements
With respect to the requirements regarding the background of the applicant under Section 1130.230(a)(1), I realize that much of the language comes from the current rules. However, I would recommend taking the opportunity to simplify the language. For example, under the current and proposed rule, the IHFPB is required to consider whether an adverse action has been taken against the applicant or against any health care facility directly or indirectly owned by the applicant for the last three years. If an applicant sold a health care facility that it owned three years ago, and then two years ago there was an adverse action under the new owner, that should not be part of the current CON application. Also, the last sentence that refers to stock options would fit better under the definition of ownership interest and should be deleted from this section.

Under Section 1110.230(a)(3)(C) the authorization for the IHFPB to access information to ascertain the background of the applicant appears to be expanded from the current requirements in that the requirement now refers to the ability to access any documents necessary to verify information. Of course verifying licensure or accreditation history and status is appropriate, but all of the information that licensing bodies may have could include confidential patient level or other confidential information that should not be provided and is unnecessary for the purpose of determining whether a CON permit should be granted.

Under Section 1110.230(b)(1) the proposed rule states that "Information to be provided should include, but is not limited to…" Then a list of potential examples is given. I would replace should with may because the list is far from exhaustive and may not even be relevant to a particular project. For example, a hospital may easily be able to justify the addition of a service without talking about disease incidence, population characteristics or changes in bus routes. The hospital’s own data on utilization, referrals to other facilities, and other hospital specific factors might be the important considerations. Or the applicant may be proposing a service because the IHFPB’s inventory indicates a need in the planning area. The applicant should not be required to provide irrelevant information that will not be useful to the Board in its decision-making.

My comment on Section 1110.230(b)(3) is similar. To the extent that a project is intended to have an impact on health status of a population, asking for goals and measurable objectives seems reasonable, as an information requirement. However, this information may not be relevant to all projects. Also, the timeframes to achieve actual changes in health status may be much longer than the time for a project to be completed and many factors may contribute to the change.

Section 1110.230(b)(4) addresses modernization projects. It is not clear whether the requirements in (b)(4) are in addition to the ones set forth above or in addition to them. This subsection does not appear to capture the range of modernizations that facilities propose. Upgrades may not be justified solely on the basis of regulatory citations, equipment repair records and the like. A modernization of an emergency department may include both upgrades and expansion. And there may be no equipment failure records or regulatory citations to provide.

Section 1110.230(c) addresses alternatives to the project. The list of alternatives to address should be discretionary. The list under these proposed rules may not be relevant to the project proposed and applicants should be able to provide information on whatever options they considered. I would recommend changing Section 1110.30(c)(1) to read, "Alternative options that may be addressed include, but are not limited to,"

With respect to documentation regarding alternatives, in the recent past, the Board has required a cost/benefit analysis. This may not always be a useful tool. Benefits are not always easily quantifiable. Consideration should be given to eliminating this requirement while still requiring the applicant to explain why the selected alternative was chosen.

Finally, Section 1110.230(c)(3) requires the applicant to provide empirical evidence including quantified outcome data, that verifies improvement of quality of care. These data may not be available. I recommend changing the requirement to read, "The applicant shall provide empirical evidence, including quantified outcome data, that which verifies improved quality of care if available."

Section 1110.234 Project Scope and Size, Utilization and Unfinished/Shell Space – Review Criteria
Section 1110.234(a) requires projects to conform with the gross square footage requirements in Appendix B. These have not yet been updated. As a result, we would hope the Board will continue to take this into consideration when making decisions about applications.

Section 1110.234(a)(1) now requires applicants to justify additional space needs using published data or studies. There may not be published data or studies. This should not be required.

Section 1110.234(b) essentially says that if the IHFPB has not established utilization standards that the applicant shall document that they will meet the standards in Appendix B. For the most part, Appendix B includes gross square footage standards, and not utilization standards. Many of these are out of date. Applicants should not be required to meet these standards until they are brought up to date. They should also not be required to justify that they will meet the standard within a two year timeframe. Every project is different. Some may be fully utilized almost immediately. Others can justify a longer time to meet utilization standards.

Section 1110.234(c) specifies that shell space shall be needed because of requirements of certification or government agencies or increases in utilization. Shell space might be justified by many factors. Applicants should be able to provide additional information regarding their need for shell space.

Section 1110.234(d) requires applicants to submit a CON for the build-out of shell space regardless of the capital thresholds. This is an overly broad requirement. It is appropriate to come back to the Board if a facility decides on a different use for the space than what was in the application. It is appropriate to come back to the Board for a permit if the build-out would independently require a permit. Automatically requiring a permit for the build-out is an excessive requirement and may even exceed the Board’s statutory authority, depending on the intended use for the shell space.

Section 1110.530 Medical/Surgical, Obstetric, Pediatric and Intensive Care – Review Criteria
Section 1110.530(b)(2)(C) requires that applicants proposing to expand an existing category of service to submit patient origin information by zip code based on the patient’s legal residence for the last six months prior to admission. Hospitals have no way of knowing where patients have lived for the last six months. This requirement should be eliminated.

Section 1110.530(b)(3) requires that an applicant proposing to establish a new bed category of service to justify the number of proposed beds based on two years of historical data. Two years may represent too long of a time frame given that access to services for patients is a priority. Consideration should be given to the time needed for historical data, the time to establish the service.

Section1110.530(b)(3)(A) addresses historical referrals and requires existing facilities to document referrals to other facilities based upon information from referring physicians. I don’t know how hospitals will be able to obtain referring physician data from another hospital. If it is available at all, this information will be extremely difficult to obtain. Patient origin by zip code can be obtained from a hospital’s own data system or from COMPdata.

Section 1110.530(b)(3)(B)(i) addresses projected referrals and requires physician referral letters that attest to the physician’s total number of patients(by zip code of residence) who have received care at existing facilities located in the area during the 12-month period prior to submission of the application. This requirement seems unreasonable in that it presumes that physicians have access to data systems in the same way hospitals do, which is not the case. In addition, the data will not reflect patients who are admitted directly from the emergency department where there won’t be a physician referral. To the extent that these data are available to a hospital, it will only be for that hospital and not for others in the area. Data may be available from COMPdata, but the requirement should be to provide data for the most recent 12-month period for which data are available, not for the 12-month date prior to submission of an application.

Section 1110.530(b)(3)(B)(ii) states that the anticipated number of referrals cannot exceed the physician’s documented historical caseload. While a subsequent section of these rules allows an applicant to incorporate population growth, this section should allow for projected increases due to changing demographics such as an aging population or for growth in a physician’s own practice. This section is intended to provide information on projected service demand. If only historical data are allowed, the information provided will only reflect historical service demand, the subject of another section of these proposed rules.

Section 1110.530(b)(4)(A)(i) addresses historical service demand for the expansion of an existing service. It requires documentation of an annual occupancy rate that has equaled or exceeded occupancy standards for the category of service for each of the latest two years before it can even submit a CON application. This is not the best solution for patients or hospital staff. It also has the potential to further strain crowded emergency departments increasing wait times for emergency department patients.

Also addressing historical service demand, Section 1110.530(b)(4)(A)(ii) states that if patients have been referred to other facilities in order to receive the subject services, the applicant is to provide documentation of the referrals, including patient origin by zip code, information about the referring physician, and the location of the recipient hospital for the latest two years. These data will be extremely difficult to obtain, and in fact may not be available at all. Physicians do not have the same data capabilities as hospitals do and generally will not be able to provide this information.

Section 1110.530(b)(4)(B)(i) addresses projected referrals and requires physician referral letters that attest to the physician’s total number of patients(by zip code of residence) who have received care at existing facilities located in the area during the 12-month period prior to submission of the application. As stated above under my comments on Section 1110.530(b)(3)(B)(i), this requirement seems unreasonable in that it presumes that physicians have access to data systems in the same way hospitals do, it does not account for emergency department patients, and does not recognize that data may not be available for the exact 12-month period prior to the submission of an application.

Section 1110.530(b)(4)(B)(ii), which addresses service demand based on projected referrals for expansion of an existing bed category of service, includes the following sentence: "The percentage of project referrals used to justify the proposed expansion cannot exceed the historical percentage of applicant market share within a 24-month period after project completion." It is unclear what is intended here. Is the intent to say that the number of project referrals cannot result in an increase in the market share of the applicant for two years? If so, this may not be realistic or even desirable from a public policy perspective. Protection of market share may be a by-product of preventing unnecessary duplication, but is not the primary goal of the CON program.

Section 1110.530(b)(4)(C) addresses projected service demand based on rapid population growth. It has been suggested by some of our members that a one-year timeframe is insufficient to gauge rapid population growth One member suggested that a five year time horizon would be more appropriate. Also, projected service demand based on rapid population growth also appears to apply only to expansion of existing bed categories of service. Why would these not apply to new services also?

Sections 1110.530(b)(4)(C)(i) and (ii) state that the applicant shall define the facility’s market area based upon historical patient origin data by zip code or census tract and that projections shall be produced using base data for the county, incorporated place, township, or community area by the US Census Bureau or IDPH. My first recommendation is that there should be a guideline regarding what percent of patients should come from the self-defined market area. Second, the applicant will be defining the market area by zip code but neither the US Census Bureau nor IDPH provide projections by zip code. Here, applicants will need the flexibility to use proprietary data sources. Finally, the underlying sources of the IDPH population projections should be identified.

Section 1110.530(b)(4)(C)(v) requires projections to contain documentation of population changes in terms of births, deaths and net migration for a period of time equal to or in excess of the projection horizon. Since this type of information is embedded in the projection methodology used, applicants may not be able to provide this information, which may be proprietary. Instead, the rules should provide examples of acceptable data sources for projections that include sources that provide zip-code level information. And finally, the rules should allow for consideration of other evidence regarding population growth. For example, information on housing starts, transportation planning information, school planning and other data may be useful to provide a more complete picture.

Section 1110.530(b)(5) addresses service accessibility. It requires applicants to document service restrictions such as the absence of the service in the planning area, access limitations due to payer status of patients, restrictive admission policies of existing providers, population factors that would suggest concerns regarding access to medical services, or services within 30 minutes operating at the occupancy targets. Either these factors will be obvious (such as no services within the planning area) or the applicant will be unable to justify their project based on these factors. In addition, they may be more easily applied outside metropolitan areas. Since they may be relevant to a project, perhaps these factors ought to be moved to the information requirements so that applicants will have the ability to describe them in their application, but won’t be used to justify rejection of an application for a worthwhile and needed project. Otherwise these factors should be reflected in a variance. In this case, the current Medically Underserved Variance could apply.

Section 1110.530(c)(3)(B) requires applicants to document that their projects will not further lower the utilization of other hospitals that are operating below occupancy standards. This section does not only apply to hospitals. You should refer to providers instead.

Section 1110.530(e) addresses staffing availability. I strongly encourage you to completely delete this section. Medical/surgical, obstetrics, pediatrics, and ICU do not currently have specific staffing requirements under the IHFPB rules. This has not been a concern and it seems unreasonable to make applicants to jump through new hoops to address a non-problem. The new staffing requirements are probably the most controversial sections in these new proposed rules. Budgeted positions can be manipulated. As a result, this criterion has the potential to be manipulated in order to block another provider’s project. Also, staffing shortages often occur during a 12-month period. And they occur for a variety of reasons. The shortages may or may not exist by the time a project is completed. Collecting staffing information from other providers is burdensome for everyone. Finally, the rules require applicants to describe how they will meet the staffing requirements defined by licensure, when these don’t exist in some cases, and when often requirements are established by designation rather than licensure programs.

Section 1110.530(f)(1) addresses bed capacity minimums. With respect to the bed minimum for obstetrics outside an MSA, I would recommend deleting the minimum or scaling it back to 3 or 4 beds. If you look at your inventory, there are facilities that have fewer than 7 beds. These rules should not discourage rural hospitals from offering OB services if they have physicians who can deliver babies and deliver pre- and postnatal care in their communities. I would also recommend either eliminating the minimum unit size for pediatric units in an MSA or reducing it to substantially (one member suggested 4 beds). Some hospitals may have the resources needed to provide specialized pediatric services, but have insufficient volume to justify 16 beds. A lower bed minimum will recognize that fewer pediatric patients are admitted than when the 16-bed minimum was established. Pediatrics patients are more often treated either on an outpatient or observation basis. Those who are admitted are often sicker, justifying the need for a dedicated pediatric unit. However, that unit no longer has to be a 16-bed unit.

I also recommend that you delete section 1110.530(f)(2). A requirement for hospitals to submit length of stay data is not currently justified. Length of stay is not a proxy for quality. The reimbursement system has changed such that there is no incentive to keep patients in the hospital longer than necessary. This is more information that an applicant has to provide that does not contribute to the Board making good decisions regarding the need for a project. In the limited cases where length of stay data may be relevant, such as when an applicant is proposing to serve a different population than others in the planning area, then length of stay data can be provided.

Finally, I question the need for Section 1110.530(g), which requires the CEO of the applicant facility to submit a statement attesting to the understanding that the occupancy targets for the relevant categories of service will be reached within two years of project completion. First, the application itself should be used to justify the need for a project, so this attestation seems unnecessary. Second, and more importantly, a very complex project may not meet utilization standards within two years of project completion. That does not mean that a project is not justified or needed. I would recommend eliminating this requirement.

Section 1110.630 Comprehensive Physical Rehabilitation Beds – Review Criteria
My comments on this section mirror those for the medical/surgical, OB, pediatrics and ICU categories of service. In addition, in this case, the criteria relate to rehabilitation. Instead of referring to generic bed services in the text, the rule would be clarified if you simply named the category of service that you are referring to – comprehensive physical rehabilitation.

With respect to staffing criteria, as with the previous category of service, I would recommend deleting the staffing availability criterion (Section 1110.630(c)(1)). I also note that the minimum number of beds for a freestanding rehabilitation hospital remains at 100. Is there a reason why this is not consistent with the number of beds required for a new hospital in an MSA as set forth in the previous section? There you are stating that a new hospital should have 75 beds.

Finally, as recommended above, I recommend deleting the requirement to provide average length of stay data (Section 1110.630(f)(2)).

Section 1110.730 Acute Mental Illness – Review Criteria
My comments on this section mirror those for the comprehensive physical rehabilitation category of service. The rules should refer specifically to the acute mental illness category of service rather than to generic bed services.

With respect to staffing criteria, as with the previous category of service, I would recommend deleting the staffing availability criterion (Section 1110.730(e)). Finally, as recommended above, I recommend deleting the requirement to provide average length of stay data (Section 1110.730(f)(2)).

Section 1110.1430 In-Center Hemodialysis Projects – Review Criteria
As for all of the categories of service, I recommend deleting the staffing availability criterion (Section 1110.1430(e)(1)).

Section 1110.1730 General Long-Term Care – Review Criteria
In reviewing this section, I would question why variances were removed from other categories of service while for general long-term care, the continuum of care variance and the defined population variance are specifically included in the table that describes which criteria to address. With respect to continuum of care projects, I question the assumption that the components are always inseparable. If an applicant already has a residential component (not regulated under CON) and adds an assisted living component (not regulated under CON) but then wants to add a nursing home to the campus to serve residents from both the residential and assisted living components, it should be the long-term care component only that is reviewable. If there is no bed need in the planning area, the applicant has another way to justify the need for beds due to the fact that the limited population that will be served.

As with the previous categories of service, I would also recommend revisions for consistency with the need and access criteria noted for the other categories of service and also eliminating the staffing availability review criterion (Section 1110.1730(g)).

Section 1110.2330 Selected Organ Transplantation – Review Criteria
Section 1110.2430 Kidney Transplantation – Review Criteria
Again, my comments are consistent with those for the medical/surgical categories. In addition, the staffing availability criteria (Section 1110.2330(c) and Section 1110.2430(e)) should be eliminated.

Section 1110.2930 Long Term Acute Care Hospital Bed Projects – Review Criteria
To the extent that the rules for this category of service mirror the others, I would make the same comments. In addition, I would eliminate Section 1110.2930(b)(6) that addresses conversion of existing general acute care beds to long term acute care beds. This is already covered under the discontinuation review criteria so is redundant. Again, I recommend elimination of the staffing availability criterion (Section 1110.2930(e)).

The average length of stay criteria (Section 1110.2930(f)(2)) should also be eliminated. In this case, it is completely irrelevant since long term acute care hospitals are supposed to have an average length of stay of more than 25 days.

Section 1110.3030 – Clinical Service Areas Other Than Categories of Service Review Criteria
I recommend re-considering the need for this whole section. The services covered are not categories of service yet criteria are being set that require a demonstration of need. If the services are part of a larger project and as a result are reviewable, then the utilization standards that exist are sufficient. I am not aware of any real problem that exists with maintaining the status quo. The application process should not become more cumbersome without a need to do so.

Conclusion
Overall, there have been improvements from previous drafts of these rules. However, there are many opportunities for improving them further. These proposed rules also be further consolidated. Much of the language gets repeated for every category of service. And while definitions are being deleted, they are not yet moved to Part 1100. When these rules are implemented, there likely will not be definitions.

Finally, in addition to the specific comments I have already made, I would say that these proposed rules are still confusing. Perhaps once revisions are made they will be less so. Because they are quite comprehensive and since there are significant concerns about unintended consequences, I would recommend that after all of the comments are reviewed, that there be another open meeting to consider a working draft that responds to the comments received prior to the 2^nd Notice public comment period. In addition, it might be helpful to actually take a few applications that have been previously submitted and assess them under this new proposed rules rubric to see if the outcomes make sense. I think this will result in a better product for both the Planning Board and for the regulated community.

I appreciate the opportunity to comment on these proposed rules. I look forward to continue working with the IHFPB as concerns about these rules are addressed.

Sincerely,

Ann Guild
Vice President