Section He-Hea 1106.01 - Criteria In addition to the criteria included in RSA 151-C:7 and He-Hea 303.02 through He-Hea 303.09, applicants shall meet the following criteria when applying for a CON for adult cardiac surgery services:
(a) In order to assess the current and long-range financial feasibility of the proposed project, applicants shall demonstrate that resources:(1) Are available to fund the proposed capital costs and operating costs; (2) Will be available to maintain operations in the event of interruptions to cash flow; and(3) Will be available to ensure the continued operation of the proposed project;(b) Demonstration of financial feasibility shall be made by providing with the application: (1) Copies of the facility's 3-year historical and 3-year projected financial statements;(2) A statement of the sources of funds to finance the proposed project; and(3) Documentation from the applicant's lender, underwriter or other anticipated source of capital, which includes: (c) Applicants shall provide a description of the proposed service area, which includes the following: (1) Geographic boundaries of the proposed primary and secondary service area;(2) Demographic characteristics of the service area by age and sex compositions;(3) Income characteristics of the area populations; and(4) Anticipated payor source by population totals and percentages expressed as: c. Private insurance companies;e. Health maintenance organizations;(d) Applicants shall demonstrate the utilization patterns of the proposed service area;(e) Demonstration of utilization patterns of the proposed service area shall be made by supplying a report with the application which provides an outline of the assumptions that the historical utilization patterns will be altered as a result of the proposed new or expanded adult heart surgery program;(f) Assumptions used to determine the historical utilization patterns of (e) above shall include historical data on admission of residents of the proposed service area to existing hospitals in the area for the last 3 calendar years on the basis of: (1) Inpatient admissions by licensed bed category and total hospital;(2) Adjusted admissions by total hospital;(3) Patient days by licensed bed category and total hospital;(4) Emergency room visits; and(5) Referral patterns of area physicians and health care providers;(g) Applicants shall assess the medical needs of the proposed service area;(h) Assessment of the medical needs of the proposed service area shall be made in the form of a report included with the application, which addresses the issue of the medically underserved population on the basis of: (1) Demographics of the service area population, which shall include:(2) Geographic access problems, such as excessive travel times and distances to existing facilities;(3) Physicians' inability to obtain admitting privileges at existing hospitals in adjacent service area;(4) Lack of specialized services in the service area;(5) Lack of adult heart surgery services in the proposed service area to meet the medical need of the current population; and(6) Cost or reimbursement barriers for uninsured or underinsured populations;(i) Applicants shall demonstrate that the anticipated proposed construction cost per square foot shall be comparable within a 10% margin to the 2013 edition of Marshall Valuation Service, section 15,as referenced in Appendix II of these rules;(j) Demonstration of project costs shall be made in the form of a report included with the application, which provides:(1) A detail of the costs and space by department or areaaffected by the proposed project;(2) A comparison of these costs which shall be within 10% of the 2013Marshall Valuation Service, section 15, as referenced in Appendix II of these rules,for the proposed class and type of construction; and(3) An identification of the square footage for each department or area before and after the project;(k) Applicants shall include a report in the application which provides: (1) An analysis of the class and quality of construction pursuant to section one of the 2013 Marshall Valuation Service,as referenced in Appendix II of these rules;(2) The allocation of costs within a multiple use building;(3) The allocations of site costs and land costs where facilities are proposed to have multiple uses;(4) The methodology used in calculating construction costs for renovations;(5) The methodology used in calculating construction costs involving leasehold improvements; and(6) The anticipated useful life of the building for depreciation purposes;(l) The following construction costs shall be compared with the 2013 Marshall Valuation Service, section 15, as referenced in Appendix II of these rules:(1) Total costs associated with:(3) Architectural and engineering fees;(4) Site preparation for the building;(5) Utilities from structure to lot line;(6) Insurance costs during construction; and(7) Interest costs during construction;(m) The applicant shall follow the outline of the calculator method set forth in section 10 of the 2013 Marshall Valuation Service, as referenced in Appendix II of these rules, to determine construction costs;(n) The costs and factors to take into account pursuant to (m) above shall include: (1) The base cost found in the general hospital table in section 15, page 24 of the 2013 Marshall Valuation Service, as referenced in Appendix II of these rules:(2) An adjustment to heating, ventilation and air-conditioning costs for extreme climate:(3) Sprinkler system costs;(4) Story height multipliers;(5) Perimeter multipliers; and(6) Cost multipliers from section 99 of the 2013 Marshall Valuation Service, as referenced in Appendix II of these rules;(o) Applicants shall describe anticipated operational cost savings that mightoccur as a result of the project due to:(1) Consolidation of services;(2) Improved heating and maintenance costs; (3) Environmental design of the constructed or renovated space; (4) Space for future expansion; or(5) Other factors not listed above;(p) Applicants shall document the assumptions used to determine the overall financial feasibility of the proposed projects to expand, renovate or replace their respective facilities;(q) Documentation of assumptions shall be made in the form of a report including the following: (1) The source of the documents used to determine the population projections of the primary and secondary service areas, if different than the office of energy and planning, 57 Regional Drive, Concord, NH;(2) The changes in market conditions which would result in a change in market share;(3) The causes of any anticipated changes in the overall length of stay in the hospital;(4) The assumptions used to prepare the projected financial statements; and(5) Other assumptions the applicant considers pertinent to the project's feasibility; and(r) Applicants shall document the sources and methodologies used to determine the need for the proposed expanded or new adult heart surgery program.N.H. Admin. Code § He-Hea 1106.01
#5237, eff 9-27-91, EXPIRED: 9-27-97
New. #6931, eff 1-14-99; ss by #8375; eff 6-21-05; ss by #10448, eff 10-25-13