By K. Kelly White Bryant

On August 17, 2020, the proposed final version of the 2020-2022 Kentucky State Health Plan was released, including none of the substantive changes originally proposed by the Cabinet for Health and Family Services. The Cabinet decided not to incorporate the originally proposed changes due to comments received, and the uncertainty surrounding the potential long-term effects of the COVID-19 pandemic on Kentucky’s healthcare system and economy.

Kentucky is a certificate of need (CON) state and, as a result, a CON is required before certain health facilities or services may be established or expanded in Kentucky. In calendar year 2018, 83 CON applications were filed with the Cabinet. In calendar year 2019, 84 CON applications were filed with the Cabinet.

The State Health Plan is a critical element of Kentucky’s CON process. It is a document that establishes the review criteria used for determinations regarding the approval or denial of CON applications for many types of facilities and services. When applicable, “each proposal approved by the Cabinet shall be consistent with the State Health Plan.” The State Health Plan document is prepared by the Cabinet for Health and Family Services every three years and updated annually.

On April 7, 2020, the proposed 2020-2022 State Health Plan was made available for review. The substantive changes proposed in the Plan related to the review criteria for three types of facilities or services: intermediate care facilities for individuals with intellectual disabilities, cardiac catheterization services, and ambulatory surgery centers.

Intermediate Care Facility

The proposed State Health Plan added language to the review criteria for intermediate care facilities for individuals with intellectual disability (ICF/IID) to include a prohibition against transferring public ICF/IID beds to a private ICF/IID. The proposed addition to the State Health Plan simply included the following statement: “Beds from a public ICF/IID shall not be transferred to a proposed or existing private ICF/IID facility.” This is a change that had been requested for several years in an effort to slowly reduce the use of ICF/IID beds in the Commonwealth in favor of community-based service. The change would remove the flexibility that intermediate care facilities currently have.

Cardiac Catheterization

The proposed State Health Plan revised the language of the cardiac catheterization review criteria to permit the addition of a cardiac catheterization program at a hospital based on the existing program’s utilization, rather than a specific laboratory’s utilization.

Specifically, the Cabinet’s proposed change would require every comprehensive program in the planning area, rather than each existing laboratory in the planning area, to have performed at least 550 adult procedures in the last 12 months before an application could be consistent with the State Health Plan. Given that an existing fixed site cardiac catheterization program may have multiple laboratories, this revision would make it easier for hospitals to add cardiac catheterization services in certain situations.

Ambulatory Surgery Center

The proposed State Health Plan revised the language in the ambulatory surgery center review criteria to enable a Kentucky-licensed acute care hospital to more easily establish an ambulatory surgical center in the same county as the hospital in certain circumstances. The State Health Plan has historically contained a specific formula that must be met, except in very limited circumstances, before a CON is granted to establish a new ambulatory surgery center. The formula was arguably designed to ensure that the existing operating rooms are being sufficiently utilized before a new ambulatory surgery center is permitted. The proposed amendment exempted hospitals from almost all the usual State Health Plan criteria required to obtain a CON to establish an ambulatory surgery center (including the utilization formula) if the proposed new ambulatory surgery center:

• Was majority-owned by the hospital.
• Was in the same county as the hospital.
• Was in a county that has a population over 30,000.
• Was established by a hospital that had achieved a sufficient “star rating” on the Hospital Compare web site.

Public Hearing

A public hearing on the proposed State Health Plan was requested, and the public hearing was held electronically via Zoom on June 22, 2020.  In addition to representatives from the Cabinet, 51 people either attended the virtual public hearing, provided verbal testimony at the public hearing, or provided written comments on the proposed State Health Plan.

There were comments in support of and in opposition to the proposed changes to the intermediate care facility review criteria, the cardiac catheterization service review criteria, and the ambulatory surgery center review criteria. In addition to these comments, there were comments submitted proposing changes to separate review criteria.

Proposed Final 2020-2022 State Health Plan

On August 17, 2020, the Office of Inspector General’s responses to the public comments and the proposed final version of the 2020-2022 State Health Plan were published by the Kentucky Cabinet for Health and Family Services. “Based on the comments received during the public comment period and because of the uncertainty created by the ongoing COVID-19 pandemic,” the Cabinet decided not to make any of the substantive changes contained in its proposed 2020-2022 State Health Plan that was released in April.

Specifically, the proposed final 2020-2022 State Health Plan does the following:

• Restores the original intermediate care facility for individuals with intellectual disability review criteria to allow the transfer of public ICF/IID beds to a private ICF/IID.
• Restores the original cardiac catheterization review criteria regarding the addition of a cardiac catheterization program at a hospital.
• Restores the original ambulatory surgical center review criteria, removing the exemption for certain hospitals proposing to establish an ambulatory surgery center in the same county.

The proposed final State Health Plan does include a “temporary waiver of certain certificate of need requirements” permitting the following: “The Secretary of the Cabinet for Health and Family Services, as the Governor’s designee, may temporarily waive Certificate of Need statutory and regulatory requirements established by KRS Chapter 216B, and 900 KAR Chapters 5 and 6, for certain transactions intended to increase access to critical healthcare services in the event of a State of Emergency. Waivers granted pursuant to this authority and as authorized by an Executive Order shall only be effective during a State of Emergency declared as the result of a public health crisis.” (SHP, p. iii.)

Substantively, the State Health Plan remains the same as the prior version, which was the 2018 Update to the 2017-2019 State Health Plan. This will satisfy some stakeholders and displease others. A copy of the proposed final 2020-2022 State Health Plan may be obtained from the Cabinet for Health and Family Services, Office of Inspector General, Division of Certificate of Need.

The regulation relating to the proposed final 2020-2022 State Health Plan is scheduled to be on the agenda of the Administrative Regulation Review Subcommittee scheduled for September 8, 2020.

-K. Kelly White Bryant is with Stites & Harbison in Louisville, Kentucky.