N.Y. Comp. Codes R. & Regs. tit. 10 § 709.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 709.2 - Acute care facilities

(a) The methodology will be utilized in the evaluation of certificate of need applications involving the construction or establishment of new or replacement beds in an acute care hospital and the need for acute care facilities and services. It is the intent of the State Hospital Review and Planning Council that this methodology, when used in conjunction with the planning standards and criteria set forth in Part 708 of this Title and section 709.1 of this Part, become a statement of basic principles and planning/decisionmaking tools for guiding and directing the development of hospital services throughout the State. Additionally, it is intended that the methodology will provide potential applicants with a framework to develop specific hospital feasability studies submitted as a part of certificate of need applications while allowing health systems agencies sufficient flexibility to consider the unique and special characteristics of their respective areas in determining bed need. The methodology is conceptually based on the application of uniform planning objectives at the county and/or State level. Its purpose is to provide guidance, to insure flexibility, and to assist the health systems agencies, the Commissioner of Health and potential applicants in determining the future need for acute care beds as consistent with the certificate of need program. The goals and objectives of the methodology expressed in this section are expected to insure that an adequate institutional bed supply is available for normal and emergency needs. The methodology helps identify counties where the projection of future acute care bed need implies a potential for excess capacity and where significant issues of hospital access and viability may occur. The goals and objectives of this methodology also are expected to result in minimizing the need for costly inpatient care by encouraging the development and expansion of more desirable lower cost alternatives, as well as insuring that high quality care and an adequate institutional bed supply are available.

(b) For purposes of this methodology, the base year shall be 1991 and the planning target year shall be 1996. The planning area shall be the county.

(c) The methodology uses the following steps to estimate the need for medical/surgical and pediatric beds in the planning target year:

(1) The normative discharge utilization rates by county of patient residence for males and females ages 0-9, 10-14, 15-19, 20-44, 45-64, 65-74, 75-84 and 85 and over are derived for medical/surgical and pediatric services for the base year and the year five years previous to the base year as set forth in paragraphs (d)(1) through (3) of this section.

(2) The population, males and females ages 0-9, 10-14, 15-19, 20-44, 45-64, 65- 74, 75-84 and 85 and over, is estimated by county for the base year, the year five years previous to the base year and for the planning target year as set forth in paragraph (d)(4) of this section.

(3) Normative discharge utilization rates per 1,000 population by county of patient residence and by peer groups of counties for males and females ages 0- 9, 10-14, 15-19, 20-44, 45-64, 65-74, 75-84 and 85 and over are estimated for the planning target year as set forth in paragraphs (d)(5) through (8) of this section.

(4) The number of expected discharges is derived by multiplying the utilization rates by county for males and females ages 0-9, 10-14, 15-19, 20-44, 45-64, 65- 74, 75-84 and 85 and over for the planning target year by the estimated county population for the planning target year divided by 1,000.

(5) Total expected discharges by county of residence is the sum of the expected discharges as set forth in paragraph (4) of this subdivision.

(6) To derive the estimated number of discharges in the planning target year by county of hospitalization, the estimated number of expected discharges for the planning target year by county of residence is adjusted to reflect the migration of patients between counties in the State and for patients migrating from other states to New York as set forth in paragraphs (d)(9) and (10) of this section.

(7) Discharges in the planning target year, by county of expected hospitalization, are distributed by diagnostic related groups (DRG) and payor categories as set forth in paragraph (d)(11) of this section.

(8) Actual average base year length of stay for discharges in the county of hospitalization for each DRG and payor group is compared to national experience in length of stay for each DRG and payor group as set forth in paragraph (d)(12) of this section. The lowest length of stay, either the national experience or the county actual average base year length of stay for each DRG and payor group, is multiplied by the expected number of discharges for that DRG and payor group to derive expected days of hospitalization in the planning target year. Expected days of hospitalization in the planning target year by DRG and payor groups are summed to derive total expected days.

(9) Days of care provided to adults and pediatric patients are separated from total expected days of hospitalization in the planning target year as set forth in paragraph (d)(13) of this section. Medical/surgical bed need is derived from adult days and pediatric bed need is derived from pediatric days.

(10) Expected adult and pediatric days of hospitalization in the planning target year are divided by 365 to derive average daily census for each county.

(11) Estimated medical/surgical and pediatric beds needed in the planning target year for each county are calculated by dividing average daily census by the expected occupancy rate as set forth in paragraph (d)(14) of this section.

(12) The estimates of public need for medical/surgical and pediatric beds for the planning target year for each county are adjusted, as set forth in paragraphs (d)(15), (16) and (17) of this section, to reflect the use of these beds for alternate level of care patients and other extraordinary disease occurrences which were not adequately reflected in the historic use rate experience.

(d) The methodology for determining public need for acute care beds and the estimates of projected bed need by county for the planning target year shall be as follows:

(1) The initial data base for the base year and the year five years previous to the base year is extracted from the Statewide Planning and Research Cooperative System (SPARCS) for medical/surgical and pediatric discharges. Excluded are neonatal discharges, newborns, and discharges with nonmedical/surgical DRGs of maternity, psychiatry, drug abuse, alcohol abuse, burns and medical rehabilitation. In the event other methodologies are developed by the Department of Health to project acute care bed need for extraordinary disease occurrences, these discharges also shall be removed from the base year and the year five years previous to the base year. For the purposes of this methodology, discharges with human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) are excluded.

(2) Counties with similar demographic and socio-economic characteristics are grouped into peer groups for purposes of this methodology:

Group

1: Bronx, Kings, New York, Queens;

2: Dutchess, Nassau, Orange, Rockland, Suffolk,

Richmond, Westchester;

3: Albany, Broome, Erie, Monroe, Niagara, Oneida,

Onondaga;

4: Genesee, Madison, Montgomery, Ontario, Oswego,

Rensselaer, Saratoga, Schenectady, Wayne,

5: Cattaraugus, Chautauqua, Chemung, Clinton, Cortland,

Jefferson, Otsego, Steuben, Tompkins, Ulster,

Warren;

6: Columbia, Greene, Hamilton, Herkimer, Livingston,

Orleans, Putnam, Schoharie, Schuyler, Seneca,

Washington, Wyoming, Yates;

7: Allegany, Cayuga, Chenango, Delaware, Essex,

Franklin, Fulton, Lewis, St. Lawrence, Sullivan;

8: Tioga.

(3) To isolate health system changes that are occurring with the growth of hospital and free-standing ambulatory-surgery programs, discharges in the initial data base for the base year and the year five years previous to the base year are further classified based on their principal procedure code in SPARCS. Discharges whose principal procedure is included in the Department of Health's Ambulatory Surgery data base are classified as appropriate for ambulatory surgery. Exceptions to this classification include obstetric and newborn cases, deaths, transfers to acute care and long term care facilities and procedures done less than five percent of the time on an ambulatory basis.

(4) The population age 0-9, 10-14, 15-19, 20-44, 45-64, 65-74, 75-84 and 85 and older shall be estimated by county by sex for the base year, the year five years previous to the base year and the planning target year using linear interpolation of the population projections developed by the New York State Department of Economic Development and by population categories based on U.S. Census Bureau data. If the population projections for the planning target year are based on census data collected 10 years or more before the planning target year, population projections for the planning target year shall be adjusted to account for the percent difference in the most recent year's actual census and the Department of Economic Development's population projection for that same year.

(5) A normative discharge utilization rate per 1,000 population by county of patient residence, for each sex, age group, and ambulatory-surgery category is calculated by dividing the number of discharges by the population for each sex and age group and multiplying this ratio by 1,000.

(6) For each peer grouping of counties, the number of discharges in each sex, age group, and ambulatory-surgery category are summed for a group total in the base year and the year five years previous to the base year. The population projection for the base year and the year five years previous to the base year for each sex and age group are summed for all counties in a peer group for a peer group population total.

(7) A normative discharge utilization rate per 1,000 population by county peer group for each sex, age group, and ambulatory-surgery category is derived by dividing the sum of county discharges by the sum of county population estimates as set forth in paragraph (6) of this subdivision and multiplying by 1,000. An average annual rate of change is calculated for each sex, age group, and ambulatory-surgery category between the year five years previous to the base year and the base year.

(8) The projected utilization rate for the planning target year is calculated by applying the county peer group's average annual rate of change for each age group, sex and ambulatory-surgery category to each county's base year utilization rate and then each year thereafter up to the planning target year. This procedure shall be performed in all county peer groups, except groups 1 and 8, to derive a county estimated utilization rate for the planning target year. For group 8, the base year actual utilization rates shall be used for the planning target year. For group 1, the lowest actual average annual rate of change between the year five years previous to the base year and the base year for each age, sex end ambulatory-surgery category shall be applied to each county's base year rate and each year thereafter up to the planning target year.

(9) To account for the migration of patients from the county of residence to the county of hospitalization, the projected number of discharges by county of residence in the planning target year will be subdivided among the counties of hospitalization according to the same proportions as experienced by discharges in the base year. For example, if 50 percent of the base year discharges residing in county A were hospitalized in county B, then 50 percent of the projected planning target year discharges residing in county A shall be assumed hospitalized in county B. Discharges in the counties of hospitalization are summed to derive a total number of discharges by county of hospitalization.

(10) To account for the estimated number of non-New York State residents hospitalized in New York State counties in the planning target year, the actual number of non-New York State residents in the base year is added to the projected number of discharges in the planning target year as calculated in paragraph (9) of this subdivision. In the event that reliable information becomes available from the health systems agencies or other sources on migration pattern changes expected either within New York State counties or from non-New York State residents, then the migration patterns from the base year may be adjusted accordingly before being applied to the planning target year.

(11) For the purposes of this methodology, the 1991 Federal grouping system of DRGs, as set forth in Appendix D-1, infra, shall be used. The following four payor categories are used:

(i) Medicare;

(ii) Medicaid;

(iii) Blue Cross plus other commercial carriers; and

(iv) all other payors including self-pay.

The percent distribution of discharges by DRG and payor group in the base year is applied to the number of discharges projected for the planning target year to derive the projected number of discharges by DRG and payor group by county of hospitalization.

(12) For the purposes of this methodology, the 75th percentile of national length of stay data, as set forth in Appendix D-2, infra, shall be used. This national data is collected from inpatient discharge records submitted by hospitals participating in the Professional Activity Study. If a DRG is excluded from the national survey because it is no longer valid, ungroupable or inappropriate for length of stay determinations, then the actual New York State average length of stay by payor group in the base year shall be used for the expected length of stay in the target year.

(13) Pediatric days are defined as days for patients ages 0-14. The actual proportion of pediatric days as a percent of total medical/surgical and pediatric days combined for the base year is calculated for each county of hospitalization based on the age of the patients discharged. This actual base year percent distribution is multiplied by the projected number of total medical/surgical and pediatric days combined for the planning target year to derive projected pediatric days.

(14) The following occupancy levels are applied to project acute care bed need by county and bed type: Bed Type Urban Rural Medical/surgical .85 .80 Pediatric .70 .65 Obstetric .75 .70

For purposes of this methodology, the following counties are considered urban - Albany, Broome, Dutchess, Erie, Monroe, Nassau, Niagara, Oneida, Onondaga, Orange, Rockland, Suffolk, Westchester, Bronx, Kings, New York, Queens and Richmond. The rural occupancy proportions shall be applied in all other counties in New York State.

(15) Patients who no longer require acute care but stay in the hospital Pending discharge are termed alternate level of care (ALC) patients. Their bed use shall be added to the acute care bed need projected for the planning target year. The number of ALC days in the base year and the year five years previous to the base year is extracted from the SPARCS case-mix file by county of hospitalization for the following age groups - 0-44, 45-64, 65-74, 75-84 and 85 and older. The statewide average annual rate of change in the number of ALC days by age group is calculated between the year five years previous to the base year and the base year. This average annual rate of change is applied to the statewide actual number of ALC days by age group in the base year and each year thereafter to the planning target year. The total number of ALC days statewide for the planning target year by age group are then distributed to each county of hospitalization according to the percent distribution of ALC days by county in the base year.

(16) Projected ALC days by county of hospitalization are summed across the age groups to derive a total number of expected ALC days by county. ALC days by county are divided by 365 to calculate an average daily census which is then added to the projected number of acute care beds needed in each county.

(17) The estimates of need for acute care beds as derived in the foregoing provisions of this section do not include estimates of need for acute care beds for patients with HIV/AIDS. Need for acute care beds to serve such patients shall be in addition to the estimates of need otherwise derived in this subdivision. If there are other patients with extraordinary disease occurrences whose acute care use is not adequately represented in the base year rate or in the rate for the year five years previous to the base year, an estimate of expected additional acute care bed need for the planning target year also shall be added to account for the needs of these patients.

(e) The methodology to derive an estimate for the need for obstetrical or maternity service beds in the planning target year shall be as follows:

(1) The number of expected live births for the planning target year is calculated by applying the projected age-specific birth rate for the planning target year as estimated by the New York State Department of Economic Development to the projected female population of child-bearing age (15-44 years) for the planning target year. If the projections of births for the planning target year are based on census data collected 10 years or more before the planning target year, projections of births for the planning target year shall be adjusted to account for the percent difference in the most recent year's actual births and the Department of Economic Development's projection of births for that same year.

(2) An estimated rate of spontaneous fetal deaths and induced abortions is applied to the projected female population of child-bearing age (15-44 years) for the planning target year and then added to the expected number of live births to derive total expected obstetric discharges.

(3) To derive the estimated number of discharges in the planning target year by county of hospitalization, the estimated number of expected discharges for the planning target year by county of residence shall be adjusted to reflect the migration of patients between counties in the State and for patients migrating from other states to New York for the female population ages 15-44, as set forth in paragraphs (d)(9) and (10) of this section.

(4) The number of estimated obstetric discharges for the planning target year is adjusted to account for the number of antenatal admissions, defined as admissions to obstetric beds which, while maternity related, do not result in a delivery. Examples of antenatal services are ectopic pregnancies, threatened abortions, miscarriages, false labor and maternity-related diagnostic procedures. The same proportion of antenatal discharges by county of hospitalization, in the base year is added to the estimated number of obstetric discharges in the planning target year.

(5) Expected discharges for the planning target year by obstetric-related diagnostic related group and payor are distributed as set forth in paragraph (d)(11) of this section.

(6) The expected number of obstetric days for the planning target year is calculated by multiplying the number of projected discharges for each obstetric-related DRG and payor group by either the actual average county length of stay or the 75th percentile of national length of stay by DRG and payor group, as set forth in Appendix D-2, infra, whichever is lower. Total obstetric days for the planning target year shall be further adjusted to reflect an expected length of stay for cesarean deliveries estimated by the Department of Health based on an analysis of the expected frequency and length of stay of cesarean section deliveries in New York State hospitals.

(7) The expected number of obstetric days of hospitalization in the planning target year is divided by 365 to derive an average daily census for each county.

(8) The estimated number of obstetric beds needed in each county in the planning target year is calculated by dividing the average daily census by the expected occupancy rate as set forth in paragraph (d)(14) of this section.

(f) Periodically, but at least every five years from the base year, the Department of Health, in conjunction with the health systems agencies' and the State Hospital Review and Planning Council, shall review and update the methodology and projections established pursuant to this section to project acute care bed need to a new planning target year not to exceed five years from a new base year.

(g) The county acute care bed need totals for medical/surgical, pediatric and obstetric beds determined in accordance with subdivisions (c), (d) and (e) of this section shall constitute the estimated public need for medical/surgical, pediatric and obstetric beds in each county for the planning target year. Each health systems agency may review the estimated bed need of its region and, in conjunction with the Department of Health and the State Hospital Review and Planning Council, may:

(1) make recommendations for amending the need estimates developed in accordance with subdivisions (c), (d) and (e) of this section to reflect local characteristics. Factors that may be considered in this analysis include, but are not limited to, the following: an analysis of current utilization patterns as it relates to projected trends developed pursuant to the methodology for determining public need for acute care beds in subdivisions (c), (d), and (e) of this section, health status indices of the population, high and low variation discharge composition, ambulatory care sensitive discharge experience and trends in alternate level of care;

(2) identify counties at high risk of undergoing acute care system changes due to an estimated excess of medical/surgical, pediatric and/or obstetric bed capacity for the planning target year. Acute care system changes shall refer to any or all of the following occurrences: discontinuation of acute care services, conversion of all or a portion of the acute care beds, decertification of all or a portion of the acute care beds or hospital closure. A county at high risk of acute care system changes is one that meets at least one of the following criteria:

(i) the estimated acute care bed need in the county for the planning target year is less than 85 percent of existing capacity and there is at least one hospital in the county with fewer beds than the estimated excess in medical/surgical, pediatric, and/or obstetric beds for the county; or

(ii) the county is identified as being at high risk by the local health systems agency, subject to the approval of the commissioner, when other factors are determined to result in acute care systems changes.

(h) The Department of Health in conjunction with the health systems agencies may develop institution-specific recommendations, with the concurrence of the State Hospital Review and Planning Council, for expected service needs and capital expenditure requirements. Commencing in 1994, and no more frequently than once a year, acute care facilities, in counties identified as being at high risk pursuant to subdivision (g) of this section, may be required to submit to the commissioner, on forms prescribed by the commissioner, a summary assessment of the facility's service needs and capital expenditure requirements for at least the following five calendar years. Based on these five-year plans and the estimated need for acute care beds in the county, the department, in consultation with the local health systems agencies, shall identify the need for appropriate changes in facility utilization and services provided to achieve the projected acute care bed need.

(i) Results of the acute care bed need methodology, as set forth in subdivisions (c), (d) and (e) of this section, together with any adjustments approved by the commissioner in consultation with the State Hospital Review and Planning Council and developed in accordance with subdivision (g) of this section, shall be used when an application proposes one of the following:

(1) an increase in the facility's medical/surgical, pediatric or obstetric bed composition;

(2) a change in the operator of a hospital that requires a need review;

(3) a capital investment which meets at least one of the following criteria:

(i) the project is a Capital Architectural and Program Alternatives (CAPA) project with total basic costs of construction as defined in section 710.1 of this Title, exceeding $25,000,000; or

(ii) the total basic costs of construction is an amount which is greater than 50 percent of the net depreciated value of the facility's total fixed assets used for hospital purposes.

(j) When submitting feasibility studies in support of applications which are subject to this section, applicants shall use the same discharge utilization rate calculations and trends as used in the acute care bed need methodology set forth in subdivisions (c), (d) and (e) of this section. Feasibility studies may not incorporate changes in hospital discharges based on market share changes except in the following instances:

(1) acquisition of another hospital and consolidation of inpatient activity;

(2) introduction of new services unavailable to the hospital service area population; or

(3) continued increases in the market share between the year five years previous to the base year and the base year.

(k) The review of, and recommendations and decisions concerning, applications subject to this section shall be based upon the following:

(1) the estimated county acute care bed need as set forth in subdivisions (c), (d), (e) and (g) of this section; and

(2) the county's expected service needs and capital expenditure requirements, and the recommendations developed and need for changes identified in accordance with subdivision (h) of this section.

N.Y. Comp. Codes R. & Regs. Tit. 10 § 709.2