Seven Year Regulatory Cycle: Revisions to the State Medical Facilities Plan for Cardiac Catheterization and Occupancy Standards for Nursing Home Beds Effective March 31, 2021

Revisions to the State Medical Facilities Plan (“SMFP”)—to be replaced over the next 2 years by the State Health Services Plan (“SHSP”)—took effect March 31, 2021. These revisions (1) implement new review criteria for cardiac catheterization, and (2) update the occupancy standards in determining need for nursing home beds. The Virginia Board of Health proposed these regulatory changes in response to a 2014 SMFP Task Force review examining the SMFP, evolution of cardiovascular treatments delivered by catheters, and nursing facility occupancy and access changes. This Client Advisory highlights these long overdue updates and their effect on the current Certificate of Public Need (“COPN”) program.

Currently, providers seeking to either introduce or expand cardiac catheterization labs in use or add additional nursing home beds must obtain a COPN from the State Health Commissioner. The Commissioner grants or denies a COPN based on whether a project complies with enumerated criteria, including the project’s consistency with the SMFP—a planning document detailing the standards for the review for each type of COPN application, as well as the methodologies for projecting the need for medical care facilities and beds. The revisions alter the review standards and relax the criteria for catherization labs and nursing home bed expansions.

New Review Criteria for Cardiac Catheterization Labs

In determining need for new or expanding cardiac catheterization services in a health planning district, the SMFP assigns Diagnostic Equivalent Procedure (“DEP”) values to different types of cardiac catheterization—awarding DEPs based on the acuity level and anticipated procedure time. To be eligible for a COPN, a provider must demonstrate that its proposed catheterization services reach or will reach a minimum number of DEPs. Additionally, absent proof of an institutional need for the new lab, existing labs within the health planning district must perform a certain number of DEPs per reporting period. On March 31, the calculation for DEPs changed to reflect intersectional cardiac catheterization and structural heart procedures such as transcatheter aortic valve replacements (TAVRs) delivered via catheter. The new calculations are as follows:

Calculation of DEPs for Different Types of Cardiac Catheterization

	Old Calculation	New Calculation (as of March 31, 2021)
Diagnostic	1 DEP	1 DEP
Therapeutic	2 DEPs	“Simple” Therapeutic: 2 DEPs “Complex” Therapeutic” 5 DEPs
Diagnostic and Therapeutic (same session)	3 DEPs	3 DEPs
Pediatric	2 DEPs	x2 Multiplier (e.g., a pediatric “complex” therapeutic is 10 DEPs)

The SMFP revisions further define simple and complex therapeutic catheterizations:

• Diagnostic: Cardiac catheterization for the purpose of detecting and identifying defects in the great arteries or veins of the heart or abnormalities in the heart structure, whether congenital or acquired.

• “Simple” Therapeutic: Cardiac catheterization for the purpose of correcting or improving certain conditions that have been determined to exist in the heart, specifically catheter-based treatment procedures for relieving coronary artery narrowing (e.g., angioplasty).

• “Complex” Therapeutic: Cardiac catheterization for the purpose of correcting or improving certain conditions that have been determined to exist in the heart or great arteries or veins of the heart, specifically catheter-based procedures for structural treatment to correct congenital or acquired structural or valvular abnormalities.

In addition, the prior SMFP language required all proposals to provide elective interventional cardiac procedures to be located only where open heart surgery services are available on site in the same hospital. As of March 31, only proposals to provide “complex” therapeutic cardiac catheterization must abide by this requirement. However, the new SMFP includes additional requirements for cardiac catheterization proposals, shown below:

Requirements for Proposals to Provide Elective Interventional Cardiac Procedures

	Requirements
Old Requirements	All proposals must be located where open heart surgery services are available on site in the same hospital.
New Requirements (as of March 31, 2021)	Proposals to provide “simple” therapeutic cardiac catheterization: Proposals do not have to be located where open heart surgery services, but they must adhere to 9 additional guidelines. Proposals to provide “complex” therapeutic cardiac catheterization: Proposals must be located where open heart surgery services are available on site in the same hospital, and such programs must participate in the Virginia Cardiac Services Quality Initiative and the Virginia Heart Attack Council.

Providers seeking COPNs for cardiac catheterization should assess recent cath volume and determine how these new calculations and requirements affect the validity of their applications. The likely results will expand evidence of institutional need of existing structural heart programs.

Updated Occupancy Standards in Determining Need for Nursing Home Beds

DCOPN applies the nursing home SMFP need formula in determining whether to issue a request for applications for new nursing home beds consistent with Va. Code § 32.1-102.3:2. DCOPN staff have applied the same formula when evaluating bed transfer requests under Va. Code § 32.1-102.3:7.

In determining need for additional nursing home beds in a health planning district, the DCOPN required that the average annual occupancy of existing and authorized Medicaid-certified nursing home beds be at least 93% (excluding the Virginia Veterans Care Centers). Beginning March 31, this required percentage will be reduced to 90% to allow for earlier development of nursing home beds. This SMFP revision applies to proposals for additional beds at existing nursing homes.

Conversely, as of March 31, proposals for additional beds at new nursing homes will now be rejected unless the median annual occupancy of existing and authorized Medicaid-certified nursing home beds in a health-planning district is at least 93%. These changes to the occupancy standards are summarized below:

Updated Occupancy Standards in Determining Need for Nursing Home Beds

	Occupancy Standards
Old Standards	For all proposals, the average annual occupancy of existing and authorized Medicaid-certified nursing home beds must be at least 93%.
New Standards (as of March 31, 2021)	For proposals for additional beds at existing nursing homes: The average annual occupancy of existing and authorized Medicaid-certified nursing home beds must be at least 90%. For proposals for additional beds at new nursing homes: (1) The average annual occupancy of existing and authorized Medicaid-certified nursing home beds must be at least 90%, and (2) the median annual occupancy of existing and authorized Medicaid-certified nursing home beds must be at least 93%.

As with cardiac catheterization proposals, providers seeking COPNs for additional nursing home beds should be aware of how these new occupancy standards affect the prospects for consideration of their applications.

Conclusion

The SMFP or SHSP will continue to be reviewed and revised to reflect up-to-date practices and procedures. Following Chapter 1271 of the 2020 Acts of Assembly, providers can expect additional revisions in the coming years. Providers should be cognizant of these updates as they consider future development projects.

Should you, your practice, or your business have any questions about the implications of the new SMFP regulations, please contact Peter Mellette, Harrison Gibbs, or Elizabeth Dahl Coleman at Mellette PC.

This client advisory is for general educational purposes only and does not cover every provision of the new legislation. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.