Sec. 10.24.01.02. Coverage

A. Except as provided in Regulations .03 and .04 of this chapter, a Certificate of Need is required before:

(1) A new health care facility is built, developed, or established;

(2) An existing health care facility is moved to another site, unless the relocation is:

(a) The result of a partial or complete replacement of an existing hospital or related institution, as defined in Health-General Article, §19-301, Annotated Code of Maryland, and is to another part of the site or immediately adjacent to the site of the existing hospital or related institution;

(b) Of an existing health care facility owned or controlled by a merged asset system, subject to the provisions of Regulation .03D or .04A(2) of this chapter, whichever is applicable; or

(c) By a hospital converting to a limited service hospital, subject to the provisions of Regulation .04A(4) of this chapter, and is to a site within the immediate area, as determined by the Commission, as described in §B of this regulation;

(3) The bed capacity of a health care facility is changed, unless the change in bed capacity:

(a) Is for a health care facility that is not an acute general hospital, does not exceed ten beds or 10 percent of the facility's total bed capacity, whichever is less;

(b) Would increase or decrease the bed capacity of an existing medical service provided by an acute general hospital, if:

(i) The total licensed bed capacity of the hospital does not increase;

(ii) The change is maintained for at least 1 year, unless modified pursuant to a Certificate of Need or exemption from Certificate of Need approved by the Commission, or the annual recalculation of hospital licensed bed capacity required at Health-General Article, §19-307.2, Annotated Code of Maryland; and

(iii) The hospital notifies the Commission at least 45 days before the proposed change in bed capacity of its medical services;

(c) Is proposed pursuant to a merger or consolidation between health care facilities, and the Commission finds that the change:

(i) Is not inconsistent with the State Health Plan;

(ii) Will result in the delivery of more efficient and effective health care services; and

(iii) Is in the public interest;

(d) Is the result of the annual licensed bed recalculation for an acute general hospital provided under Health-General Article, §19-307, Annotated Code of Maryland;

(e) Is proposed for an acute general hospital in a jurisdiction with three or more acute general hospitals, and between acute general hospitals in a merged asset system located within the same jurisdiction, subject to the provisions of Regulation .03D(3) of this chapter; or

(f) Is proposed pursuant to Regulation .03C of this chapter, and meets the requirements of that subsection;

(4) The type or scope of any health care service offered by a health care facility is changed, and the change:

(a) Establishes a new medical service;

(b) Establishes a new open heart surgery, organ transplant surgery, burn treatment, or neonatal intensive care program;

(c) Establishes a new home health agency, general hospice care program, or freestanding ambulatory surgical facility;

(d) Builds or expands ambulatory surgical capacity in any setting owned or controlled by a hospital, if the building or expansion would increase the surgical capacity of the State's health care system;

(e) Results in:

(i) The establishment of a new subunit by an existing home health agency;

(ii) The expansion of a home health agency into a jurisdiction not included in a previous Certificate of Need; or

(iii) A transfer of ownership of a subunit or a facility based home health care service of an existing health care facility that separates the ownership of the subunit from the home health agency or home health care service that established the subunit;

(f) Closes an existing medical service, except as provided in Regulation .03 or .04 of this chapter, or is a temporary delicensure that meets the requirements of Regulation .03C of this chapter;

(g) Closes an existing health care facility or converts it to a non-health-related use, with the exception of:

(i) The closure of an acute general hospital or its conversion to a limited service hospital, as provided in Regulation .03 or .04 of this chapter; or

(ii) The temporary delicensure of a health care facility that meets the requirements of Regulation .03C of this chapter;

(5) A health care facility makes a capital expenditure, as defined in Health-General Article, §19-120 (k), Annotated Code of Maryland, and in this chapter, that exceeds the threshold for capital expenditures, as adjusted for inflation as provided in this chapter, including a capital expenditure:

(a) For the relocation of an existing health care facility owned or controlled by a merged asset system, except as provided in Regulation .03H(3) of this chapter; and

(b) By the relocated health care facility to permit the facility to offer a new health care service for which Certificate of Need is otherwise required.

B. Definition of Immediate Area for Limited Service Hospital Conversion.

(1) For the purpose of §A(2)(c) of this regulation, "immediate area" means a location on the site of the existing hospital, or on an adjacent site.

(2) A hospital may provide evidence as to why the Commission should approve a site for a limited service hospital beyond the immediate area of the converting hospital.

(3) The Commission will not approve a site for a limited service hospital unless the site is both within:

(a) A 5-mile radius of the site of the hospital proposing the conversion; and

(b) Its primary service area.

C. A person may not divide a project into component parts except as permitted by this chapter. The Commission shall, on request, issue a determination regarding whether two or more apparently individual projects actually represent component parts of a single project, considering factors such as the timing of the projects, the functional areas of a facility to be affected, the number of construction contracts entered into, and whether expenditures under one contract depend upon the completion of a prior contract.

D. Proposed Change After Acquisition. If a person acquires an existing health care facility or service without a Certificate of Need, in accordance with Regulation .03A of this chapter, and proposes to change the health care services it provides or its bed capacity, the proposed change requires Certificate of Need review and approval in accordance with §A of this regulation.

E. A health maintenance organization, or health care facility directly or indirectly controlled by an HMO or group of HMOs, shall obtain a Certificate of Need before it builds, develops, operates, or participates in building, developing, or operating:

(1) A hospital;

(2) An ambulatory surgical facility; or

(3) Any other health care facility for which a Certificate of Need is required under §A of this regulation, if that health care facility is planned for or could be used by non-subscribers of the health maintenance organization or organizations.

F. Changes Not Covered By This Chapter. Changes to a health care facility not covered under §A of this regulation do not require Certificate of Need review and are not covered by this chapter. In instances when a person is uncertain whether the establishment of a new health care facility, or the expansion of an existing health care facility, is covered by Certificate of Need review requirements, the project requires, review for a determination of coverage under Regulation .14B of this chapter.