22 §1844. Certificate of public advantage
Title 22: HEALTH AND WELFARE
Subtitle 2: HEALTH
Part 4: HOSPITALS AND MEDICAL CARE
Chapter 405-A: HOSPITAL AND HEALTH CARE PROVIDER COOPERATION ACT HEADING: PL 2005, C. 670, §1 (NEW)
§1844. Certificate of public advantage
1. Authority. A covered entity may negotiate and enter into a cooperative agreement with another covered entity and may file an application for a certificate of public advantage pursuant to this section. The approval of an application for a certificate of public advantage is governed by the standards of subsection 5.
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
2. Application for certificate. The application process for a certificate of public advantage is as follows.
A. At least 45 days prior to filing an application for a certificate of public advantage for a merger, the parties to a merger agreement shall file a letter of intent with the department describing the proposed merger. Copies of the letter of intent and all accompanying materials must be submitted to the Attorney General and to the Governor's Office of Health Policy and Finance at the time the letter of intent is filed with the department. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
B. The parties to a cooperative agreement shall file with the department an application for a certificate of public advantage with regard to the cooperative agreement and pay the application fee established under section 1851. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
C. The application must include a signed copy of the original cooperative agreement and must state all consideration passing to any party under the agreement. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
D. The parties to a cooperative agreement shall submit copies of the application and all the accompanying materials to the Attorney General and the Governor's Office of Health Policy and Finance at the time they file the application with the department. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
Copies of the application and all accompanying materials filed by the applicant, public comments, records of the department maintained with regard to the application and copies of the letter of intent filed for a merger may be examined at an office of the department.
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
3. Public notice. Within 10 business days of the filing of an application under this section, the department shall give public notice of the filing as follows.
A. The department shall publish notice in a newspaper of general circulation in Kennebec County and in a newspaper published within the service area in which the proposed cooperative agreement would be effective. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
B. The department shall provide notice by mailing copies of the application and letter of intent, if any, to all persons who request notification from the department. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
C. Notice under this subsection must include:
(1) A brief description of the proposal;
(2) A description of the review process and schedule; and
(3) A statement of the availability of the application and records pertaining to it and letter of intent as provided in subsection 2. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
4. Procedure for department review. The following procedures apply to review by the department of an application filed under this section.
A. The department shall review and evaluate the application in accordance with the standards set forth in subsection 5. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
B. Any person may provide the department with written comments concerning the application within 30 days after the public notice in subsection 3, paragraph A. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
C. The department shall provide the Attorney General and the Governor's Office of Health Policy and Finance with copies of all comments from persons submitted under paragraph B. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
D. This paragraph applies with regard to a public hearing.
(1) The department may hold a public hearing when it determines a public hearing is appropriate.
(2) The department shall hold a public hearing if 5 or more persons who are residents of the State and who are from the health service area to be served by the applicant request, in writing, that a hearing be held. A request under this subparagraph must be received by the department no later than 30 days after publication of the notice under subsection 3.
(3) If a public hearing is held, an electronic or stenographic record of the public hearing must be kept as part of the record of the application by the department. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
E. The parties to a cooperative agreement may withdraw their application and thereby terminate all proceedings under this chapter as follows:
(1) Without the approval of the department, any party or the Superior Court at any time prior to the filing of an answer or responsive pleading in a court action under section 1848, subsection 2 or prior to entry of a consent decree under section 1848, subsection 9; or
(2) Without the approval of the department or any party at any time prior to the issuance of a final decision under paragraph G if a court action has not been filed under section 1848, subsection 2. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
F. The department shall issue a final decision to grant or deny an application for a certificate of public advantage under this section no less than 40 days and no more than 90 days after the filing of the application. The department shall issue a preliminary decision at least 5 days prior to issuing the final decision. The preliminary and final decisions must be in writing and set forth the basis for the decisions. The department shall provide copies of the preliminary and final decisions to the applicants, the Office of the Attorney General, the Governor's Office of Health Policy and Finance and all persons who requested notification from the department under subsection 3, paragraph B. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
5. Standards for approval of a certificate of public advantage. The department shall issue a certificate of public advantage for a cooperative agreement if it determines that the applicants have demonstrated by a preponderance of the evidence that the likely benefits resulting from the agreement outweigh any disadvantages attributable to a reduction in competition likely to result from the agreement. The department may not issue to health care providers a certificate of public advantage for a cooperative agreement that allows coordinated negotiation and contracting with payors or employers unless such negotiation and contracting are ancillary to clinical or financial integration. In issuing a decision on an application for a certificate of public advantage under this section, the department shall make specific findings as to the nature and extent of any likely benefits and disadvantages found under this subsection.
A. In evaluating the potential benefits of a cooperative agreement, the department shall consider whether one or more of the following benefits are likely to result from the cooperative agreement:
(1) Enhancement of the quality of care provided to citizens of the State;
(2) Preservation of hospitals or health care providers and related facilities in geographical proximity to the communities traditionally served by those facilities;
(3) Gains in the cost efficiency of services provided by the hospitals or others;
(4) Improvements in the utilization of hospital or other health care resources and equipment;
(5) Avoidance of duplication of hospital or other health care resources; and
(6) Continuation or establishment of needed educational programs for health care providers. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
B. The department's evaluation of any disadvantages attributable to a reduction in competition likely to result from a cooperative agreement may include, but is not limited to, the following factors:
(1) The extent of any likely adverse impact on the ability of health maintenance organizations, preferred provider organizations, managed health care service agents or other health care payors to negotiate optimal payment and service arrangements with hospitals or health care providers;
(2) The extent of any disadvantages attributable to reduction in competition among covered entities or other persons furnishing goods or services to, or in competition with, covered entities that is likely to result directly or indirectly from the cooperative agreement;
(3) The extent of any likely adverse impact on patients or clients in the quality, availability and price of health care services;
(4) The extent of any likely adverse impact on the access of persons enrolled in in-state educational programs for health professions to existing or future clinical training programs; and
(5) The availability of arrangements that are less restrictive to competition and achieve the same benefits or a more favorable balance of benefits over disadvantages attributable to any reduction in competition likely to result from the agreement. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
C. In evaluating a cooperative agreement under the standards in paragraphs A and B, the department shall consider the extent to which any likely disadvantages may be ameliorated by any reasonably enforceable conditions under subparagraph (1) and the extent to which the likely benefits or favorable balance of benefits over disadvantages may be enhanced by any reasonably enforceable conditions under subparagraph (2). Reasonably enforceable conditions are those conditions that the department determines are subject to future measurement or evaluation in order to assess compliance with those conditions.
(1) In a certificate issued under this subsection, the department may include conditions reasonably necessary to ameliorate any likely disadvantages of the type specified in paragraph B.
(2) In a certificate issued under this subsection, the department may include additional conditions, if proposed by the applicants, designed to achieve public benefits, which may include but are not limited to the benefits listed in paragraph A. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
D. In a certificate of public advantage issued under this subsection, the department may include a condition requiring the certificate holders to submit fees sufficient to fund expenses for consultants or experts necessary for the continuing supervision required under section 1845. These fees must be paid at the time of any review conducted under section 1845. The total amount charged to the certificate holders for continuing supervision may not exceed $5,000 for mergers involving hospitals with 50 or more beds and $2,500 for all other cooperative agreements. [2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF).]
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
6. Intervention. The Attorney General and the Governor's Office of Health Policy and Finance may intervene as a right in any proceeding under this chapter before the department. Except as provided in this subsection, intervention is governed by the provisions of Title 5, section 9054.
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
7. Attorney General enforcement. The Attorney General may file an action in Superior Court to enforce any final action taken by the department under this section. In the event that the Attorney General files an action pursuant to its separate authority outlined in section 1848, pending department proceedings in accordance with this section are stayed pursuant to section 1848, subsection 2.
[ 2005, c. 670, §1 (NEW); 2005, c. 670, §4 (AFF) .]
SECTION HISTORY
2005, c. 670, §1 (NEW). 2005, c. 670, §4 (AFF).