Senate Bill 506: Certificate of Need Modifications

• Increases capital expenditure thresholds for certificate of need review effective January 1, 2022: diagnostic center equipment from $500,000 to $1,500,000, major medical equipment from $750,000 to $2,000,000, and new institutional health services from $2,000,000 to $4,000,000, with annual adjustments using the Medical Care Index beginning September 30, 2022.

• Establishes certificate of need expiration timelines: projects over $50,000,000 must initiate construction within 4 years of approval, projects $50,000,000 or less within 2 years, and any certificate unused in the prior 12 months automatically expires.

• Creates exemption for ambulatory surgical facilities in counties with population of 100,000 or more, requiring physicians to attempt joint venture with a hospital at 55% physician ownership or demonstrate inability to reach agreement within 6 months, with hospital affiliation and transfer arrangements required.

• Requires new ambulatory surgical facilities developed after October 1, 2019 to commit to providing charity care equal to 4% of total surgical revenue for self-pay and Medicaid cases or match affiliated hospital's charity care percentage, whichever is greater, and report utilization data by payer category.

• Reduces rural hospital behavioral health bed reservation requirement from 50% to 25% for beds constructed or converted with state funds, effective 18 months after the bill becomes law.