SJR 496

Special Joint Subcommittee Studying Virginia's Medical Care Facilities COPN Program

July 28, 1999, Richmond

The second 1999 meeting of the Special Joint Subcommittee to Study Certificate of Public Need focused on various recent COPN activities in Virginia and other states. The director of the Center for Quality Health Care Services and Consumer Protection within the Department of Health discussed implementation activities related to various 1999 COPN legislation, including the special joint subcommittee's recommendations.

1999 Legislation

The Board of Health approved emergency regulations on July 23 to implement certain provisions of several 1999 bills. Backlogs of final decisions are being reduced, and a third hearing officer has been appointed. The impact of the special joint subcommittee's legislation was described as establishment of a sanctioned review process and deregulation of replacement of all medical equipment. The department plans to have emergency regulations in place to implement the sanctioned review process in time for the October 10, 1999, review cycle. Further, emergency regulations to effectuate the 1999 amendments requiring special consideration for projects proposed in rural areas and weighting of project review standards for such projects have been approved by the acting Commissioner of Health on behalf of the Board of Health and will be effective 30 days after publication in the Virginia Register of Regulations. The State Medical Facilities Plan is also being amended to be consistent with the rural special consideration regulations.

Another approved bill required, for the purpose of issuing Requests for Applications (RFAs) for increases in nursing facility beds, the discounting of certain approved increases in nursing facility beds when the particular beds have not yet been built. Analysis of the nursing facility bed need in all planning districts utilizing this restriction did not identify any need for additional beds. The board approved the release of the nursing home bed needs analysis on July 23. The department's recommendation to the acting Commissioner of Health and the Board of Health is, at this time, not to issue additional RFAs for increases in nursing home beds. The department will, however, review the comments on the nursing home bed needs analysis and reconsider this recommendation based on these comments.

Regional Health Systems Agencies

A summary of recent regional health systems agencies' (HSAs) actions was also presented to the special joint subcommittee by a representative of the Virginia Association of Regional Health Planning Agencies. The HSAs believe that the COPN program, including the planning controls on licensed surgery facilities and services, strikes a reasonable balance and is responsive to and protective of the public interests. Further, the question of COPN coverage of surgery capacity has been raised and examined a number of times in Virginia in the last decade.

The HSAs reported that the shift to outpatient--less costly--surgery does not seem to have been affected by COPN and has been dramatic in Virginia. Although nationally approximately 50 percent of surgery performed in licensed facilities is outpatient, in Virginia about 67 percent of the procedures performed in licensed surgery facilities is outpatient, with many hospitals having close to an 80 percent outpatient rate, and some regions of Virginia approaching a 75 percent rate. In the last decade, the demand and facilities for surgery have increased 40 to 45 percent; however, the use pattern reflects that the average number of procedures performed per licensed operating room has increased by four percent over the past 12 years (733 procedures per operating room in 1987; 763 in 1998).

Apparently, licensed surgery facilities, including ambulatory surgery centers, may be more efficiently used in Virginia than in other areas, with the average number of surgery procedures per licensed operating room higher in Virginia than nationally and in neighboring states. Thus, the HSAs reported, effective use of capacity reduces overhead costs and contains average surgery costs and charges, which are lower in Virginia than in other states.

The HSAs also stated that adding unnecessary capacity to any health care service results in increased costs and decreased quality. Outpatient surgery, the association reported, is already available and convenient for both patients and practitioners, and removing COPN from surgery facilities could do significant harm to community hospitals. The association asked that (i) the persons requesting the elimination of COPN from surgery facilities be identified and their interests defined, (ii) the economic threat of increases in surgery capacity to community hospitals be assessed, (iii) the issues relating to the delivery of charity care be addressed, and (iv) the efficiency and cost effectiveness of hospitals and freestanding surgery centers be examined. The final issue emphasized by the HSAs was quality of care--the special joint subcommittee was reminded of the relationship between volume and quality of outcomes.

Among the many questions posed by the joint subcommittee:

• the 1980s use of a reasonable cost standard based on data collected by the state at the time;
• the validity of the economic threat of increases in outpatient surgery capacity to community hospitals;
• the assumption that surgeons who cannot get practice privileges in local hospitals would take advantage of deregulation;
• the effectiveness of the licensure procedures in ensuring quality of care;
• the impact of COPN on access to care;
• the current operating room volume standards and their applicability in today's managed care environment;
• patient demographics and mixes in various outpatient settings (indigent, working poor, Medicare, Medicaid, insured, uninsured, etc.);
• the differences in surgery costs in freestanding centers and hospitals;
• the need to maintain hospital inpatient surgery services;
• consumers' ability to assess the costs and quality of health care and make informed decisions concerning health care services;
• the potential for fragmentation of the health care system;
• patient convenience in the scheduling and timing of procedures and delays in obtaining care; and
• the impact of COPN on quality of care (e.g., use rates, mortality and morbidity rates).

Anesthesia Services

The special joint subcommittee also received information concerning anesthesia services in various surgery settings in Virginia, including some facts concerning a well-publicized Northern Virginia disciplinary case. Answers to members' questions were provided by the president of the Virginia Society of Anesthesiologists, who stated that the guidelines of the American Society of Anesthesiologists for office-based anesthesia will be issued in October or November of this year. In addition, the HCFA study of anesthesia issues is currently in process. The goal of the anesthesiologists is to develop a rational approach to the delivery of anesthesia services through the guidelines, in light of the monumental shift of surgery to the outpatient setting and the current controversy in Florida concerning rules relating to office-based surgery.

There are three levels of anesthesia, depending on the type of surgery: topical/local (small field block; thus having small risk); conscious sedation/sedation anesthesia (using drugs to induce a level of consciousness at which the patient can tolerate unpleasant sensations without loss of defensive reflexes; thus producing a moderate degree of risk); and general anesthesia (using drugs to induce major regional blocks; thus producing greater risks). The special joint subcommittee asked about the standards, particularly accreditation requirements, which might be appropriate for offices. The policies and procedures for patient histories and pre-procedure examinations, obtaining consent and providing information, monitoring of patient signs, infection control, recovery rooms, safety equipment, and discharge criteria were reviewed. Levels of training and supervision for the various levels of anesthesia and practitioner qualifications were also discussed.

A review of COPN actions taken in other states in 1999 was also presented, in which it was noted that nursing home beds were frequent subjects for 1999 bills. The special joint subcommittee adjourned after reviewing a revised study plan and determining that three more meetings will be scheduled for dates in November, December, and January.

The Honorable Jane H. Woods, Chair
Legislative Services contact: Norma E. Szakal

THE RECORD