Section 760.5 - Determinations of public need

760.5 Determinations of public need.

(a) (1) The following methodology shall be utilized in the evaluation of applications involving the establishment and/or construction of certified home health agencies, excluding long-term home health care programs, in order to determine the need for such agencies. It is intended that this methodology, when used in conjunction with the planning standards and criteria set forth in section 709.1 of this Title, which are also applicable to the determination of need for certified home health agencies and which are incorporated herein, represent a statement of basic principles and planning/decisionmaking tools for guiding and directing the development and expansion of certified home health agencies throughout the State. The methodology is conceptually based on the application of uniform planning objectives at the health systems agency and/or State level. Its purpose is to provide guidance, to permit flexibility and to assist the health systems agencies, the State Hospital Review and Planning Council, the Public Health Council, the commissioner and potential applicants in determining the estimated need for certified home health agencies. The objective of the methodology is to ensure that an adequate supply of certified home health agency capacity is available and accessible, while at the same time avoiding the proliferation of unneeded agencies. The application of the methodology is expected to result in reducing the need for institutional acute and long-term care by developing and expanding the availability of certified home health agency services which may serve as appropriate alternatives to institutional care.

(2) In making determinations of public need under this section prior to January 1, 1988, calculations of total projected need, projections of met need, and determinations of standard agency case capacity shall be based on agencies that have reported nursing cases by age and sex cohorts in diagnostic categories to the department on forms provided by the department regardless of whether such cases were admissions of the reporting agency or admissions of another agency for which the reporting agency provided services through contract arrangement.

(b) (1) The commissioner shall designate certified home health agency planning areas within each health systems agency region among which the need estimates calculated pursuant to this section will be allocated. The commissioner shall designate each county as a separate planning area unless, with the advice of the State Hospital Review and Planning Council, he has approved a proposal by a health systems agency to designate two or more contiguous counties as a planning area.

(2) A health systems agency may submit a proposal to the commissioner to designate two or more contiguous counties as a planning area. Factors which shall be considered by a health systems agency in proposing, the State Hospital Review and Planning Council in providing advice regarding, and the commissioner in designating two or more contiguous counties as a planning area shall include, but need not be limited to, the following:

(i) provider travel patterns including driving time and availability of public transportation;

(ii) the availability of existing certified home health agency case capacity; and

(iii) other factors identified by the health systems agencies.

(c) Certified home health agency need estimates.

(1) (i) Certified home health agency need estimates shall be calculated at least once every three years using the most currently available and analyzed data. The factors and methodology to be utilized by the Public Health Council and/or the commissioner, as appropriate, in estimating the public need for certified home health agencies shall include, but need not be limited to, the development of statewide normative use rates, and consideration of the local characteristics and demographics of the planning area. Prior to January 1, 1986, the normative use rates shall be calculated on the basis of reported certified home health agency nursing cases. A case is defined as an admission or readmission to a certified home health agency during a given calendar year. Such cases shall include those reported in the noninfective disease and disability categories, the infective and parasitic diseases categories (excluding tuberculosis and venereal disease and all disease contacts) and the ill without diagnosis category (symptoms, signs and ill-defined conditions) or comparable categories as listed on the department form. Subsequent to December 31, 1985, the calculation of normative use rates shall also include consideration of certified home health agency cases which represent admissions or readmissions during a calendar year directly to therapy services.

(ii) The number of reported cases shall be adjusted by the department to remove reported cases from the data base which represent either nursing assessments solely to determine an individual's eligibility to participate in the personal care program administered by the Department of Social Services, or reporting errors and inconsistencies. In the absence of explicit data, such adjustments shall be determined by the department based on the statewide distribution of nursing visits per case reported by certified home health agencies as follows: (a) the ratio of reported nursing visits to reported cases for each agency shall be computed; and

(b) the reported nursing visits of an agency divided by the statewide mean of the visit to case ratios minus one standard deviation shall be computed to derive adjusted cases.

(2) The statewide normative use rates shall be derived using the lower of the reported cases as described in subparagraph (1) (i) of this subdivision or the adjusted cases as determined under subparagraph (1) (ii) of this subdivision for each county for the following age/sex cohorts:

(i) male, 0-18 years;

(ii) male, 20-44 years;

(iii) male, 45-64 years;

(iv) male, 65-74 years;

(v) male, 75-84 years;

(vi) male, 85+ years;

(vii) female, 0-19 years;

(viii) female, 20-44 years;

(ix) female, 45-64 years;

(x) female, 65-74 years;

(xi) female, 75-84 years; and

(xii) female, 85+ years.

(3) The cases for each age/sex cohort for each county shall be expressed as a use rate in cases per 1,000 population and ranked from the lowest to the highest with the use rates for the same cohort for all other counties. Outliers shall be removed from the high end of each of the 12 age/sex cohort rankings. A use rate shall be considered an outlier if it is the highest use rate in an age/sex cohort ranking and is more than 20 percent higher than the next highest use rate in such ranking. After deletion of any outliers, the average of the 10 highest use rates for each of the 12 age/sex cohort rankings shall be determined. Such average for each cohort ranking shall represent the statewide normative use rate for its respective cohort for purposes of estimating need. The statewide normative use rates are then applied to the most current New York State Department of Commerce population figures for each county projected five years into the future to derive an estimate of need, expressed as cases per year.

(4) A health systems agency may submit a plan to the Public Health Council and the commissioner which proposes adjustments to the need estimates for a planning area within its region. The Public Health Council and/or the commissioner, as appropriate, with the advice of the State Hospital Review and Planning Council, may reject or approve all or a portion of the proposed adjustments based upon consideration of pertinent factors, including, but not necessarily limited to the following:

(i) whether the proposed adjustments reflect consistency with the objectives and requirements of this section and section 709.1 of this Title;

(ii) whether the proposed adjustments take into consideration the number of patients on alternate care status in hospitals serving the planning area; and

(iii) whether the proposed adjustments identify special populations in need of certified home health agency services.

(d) (1) To estimate unmet need for certified home health agencies in a planning area, the projected need as determined pursuant to subdivision (c) of this section, together with any adjustments thereto, shall be compared to the case capacity of approved certified home health agencies in such planning area projected five years into the future. Estimates of projected capacity of certified home health agencies shall be calculated at least once every three years using the most currently available and analyzed data.

(2) The projected capacity of a certified home health agency that has reported case data to the department for at least two calendar years shall be the number of annual adjusted cases projected to grow for five years at an annual rate equal to the average annual statewide case growth rate for all such certified home health agencies in the State for the two most recent calendar years for which case data has been analyzed pursuant to this section, or the average annual case growth rate for all such certified home health agencies in the agency's planning area for the two most recent calendar years for which case data has been analyzed pursuant to this section, whichever is less.

(3) The projected case capacity for a certified home health agency that has reported case data for one year only or that was not operational during the most recent reporting year shall be no greater than:

(i) the adjusted cases reported for the most recently completed and analyzed calendar year of operation, if any; or

(ii) the standard agency case capacity for the population density category of the agency's planning area, whichever is higher.

(4) The standard agency case capacity of a planning area shall be determined based on the population density category of that planning area. For each population density category, the standard agency case capacity shall be defined as the mean of the adjusted cases for all certified home health agencies reporting cases for at least two calendar years in that population density category reduced by one standard error of the mean. In determining the standard agency case capacity, an agency's cases shall be excluded if its inclusion would result in a shift in the standard agency case capacity greater than 15 percent. Such exclusions shall be limited to one agency at the lower and upper end of the range of adjusted cases. If a certified home health agency's reported cases in planning areas in more than one population density category, the cases shall be counted in the population density category having the plurality of cases. For purposes of such determination, planning areas shall be grouped into the following population density categories: (i) areas with a population density no greater than 200 persons per square mile;

(ii) areas with a population density greater than 200 but no greater than 800 persons per square mile;

(iii) areas with a population density greater than 800 but no greater than 5,000 persons per square mile; or

(iv) areas with a population density greater than 5,000 persons per square mile.

(5) A health systems agency may submit a proposal to the Public Health Council and the commissioner which recommends adjustments to reduce the estimates of projected met need for a planning area within its region. The Public Health Council and/or the commissioner, as appropriate, with the advice of the State Hospital Review and Planning Council, may reject or approve all or a portion of the proposed adjustments based upon consideration of pertinent factors, including, but not necessarily limited to, documentation indicating that one or more approved agencies within its planning area will not attain or retain the growth rates projected for such area.

(6) The sum of the projected case capacities for a planning area shall be the estimate of projected met need for certified home health agency capacity for such area.

(e) (1) Notwithstanding that need may otherwise have been determined to be met under this section, the Public Health Council and/or the commissioner, as appropriate, may recognize the need for additional certified home health agencies or agency case capacity where:

(i) an applicant proposes to provide services to patients that would otherwise require care in a facility or program licensed by the Office of Mental Health or the Office of Mental Retardation and Developmental Disabilities when the appropriate office documents the number of individuals in the applicant's planning area that are eligible for care in a facility or program licensed by such office who would also be eligible for and would benefit from certified home health agency services, the nature of the certified home health agency services required by such individuals, the expected length of time such individuals would require certified home health agency services and the inability of existing certified home health agencies to provide such services. The Office of Mental Health or the Office of Mental Retardation and Developmental Disabilities shall provide the necessary documentation to the department before an application to provide care for such individuals may be acted on. The certified home health agency case capacity approved to serve any special population under this subparagraph shall not be counted as part of the available resources to satisfy public need for certified home health agency case capacity otherwise estimated under this section; or

(ii) an applicant proposes to be established as a special pilot program home health agency; and:

(a) has demonstrated how the direct provision of home health agency services by the applicant will improve continuity of care, access to services, cost effectiveness and efficiency;

(b) has identified and described a particular population group and any special needs of such group, and has estimated the number of people therein to be served and the geographic area where the services will be provided;

(c) has demonstrated how the applicant will be better able than other home health agencies in the service area to meet any special needs of the defined population group; and

(d) has agreed to, and if approved shall, prepare and file an annual report to the commissioner and the State Hospital Review and Planning Council on meeting the program's objectives, including reaching its approved case capacity, enhancing quality assurance and access to services, and improving cost effectiveness and efficiency.

(2) The commissioner shall:

(i) specifically limit the case capacity and service area of a special pilot program home health agency, approved pursuant to subparagraph (1) (ii) of this subdivision, consistent with the program scope as set forth in the application; and

(ii) approve no more than 10 such special pilot program home health agencies.

(3) An agency program approved pursuant to this subdivision shall be exempt from the requirements relating to minimum annual case capacity and serving an entire certified home health agency planning area as set forth in subdivisions (g) and (h) of this section.

(4) An agency program approved pursuant to this subdivision shall not have a case capacity that exceeds 10 percent of the entire certified home health agency planning area's projected need.

(f) (1) The need estimates for each planning area together with any approved adjustments determined under this section shall constitute the estimate of the public need for certified home health agency case capacity in the planning area. (2) Public need shall be deemed satisfied for each planning area when the projected case capacity of approved certified home health agencies meets the estimate of public need for the planning area.

(g) Approval of new agencies.

(1) (i) Except as provided below, the number of new agencies which may be approved in a certified home health agency planning area shall not exceed the nearest rounded number derived from dividing the unmet need by the standard agency case capacity for the planning area's population density category.

(ii) Where there is not sufficient remaining unmet need to approve a new agency under subparagraph (i) of this paragraph, a new agency may be approved to meet such unmet need if the Public Health Council determines that such need will not otherwise be met and such unmet need is sufficient to sustain an efficiently operated agency.

(2) Where there is remaining unmet need, an agency may be approved to serve more than one planning area without meeting the standard agency case capacity for each such planning area provided that the agency's total proposed case capacity among all planning areas to be served by it is no less than the standard agency case capacity for the planning area to be served by such agency with the greatest population density.

(h) In addition to meeting the other applicable provisions of this section, an applicant for initial certification shall be approved as meeting public need only if the applicant:

(1) agrees to serve the entire certified home health agency planning area. Pursuant to the procedure set forth in section 709.1(c) of this Title, exceptions to serving the entire planning area may be permitted under special circumstances, including but not limited to those set forth below, provided that the agency agrees to serve the entire alternate service area designated for such agency. Such circumstances include:

(i) geographic barriers and/or travel time which may impede service delivery to the entire planning area provided that the remaining portion of the planning area is adequately served;

(ii) proposals in which an applicant will focus its program of care in specific underserved areas which form only a portion of a planning area; and

(iii) other factors identified by the local health systems agency; and

(2) agrees to serve general hospital inpatients on alternate care status that would be suitable to receive home care;

(3) agrees to serve population groups in the planning area that have difficulty gaining access to appropriate certified home health agency care due to minority status, age, medical history, case complexity, or payment source; and

(4) ensures the provisions of charity care in each fiscal year of the agency in an amount no less than two percent of the projected total annual operating costs of the agency in that fiscal year for not-for-profit and for-profit agencies and agencies operated by public benefit corporations and 3-1/3 percent of projected total annual operating costs of the agency for public agencies. Charity care is care provided at no charge or reduced charge for the services the agency it certified to provide to patients who are unable to pay full charges, are not eligible for covered benefits under title XVIII or XIX of the Social Security Act, are not covered by private insurance and whose household income is less than 200 percent of the Federal poverty level. Adjustments to the required percentages of charity care may be made by the department upon recommendation of the appropriate health systems agency to reflect significant county variations from the State average with respect to the proportion of indigent and medically uninsured persons to the total population; and

(5) demonstrates an ability and willingness to attain a minimum annual case capacity no less than the standard agency case capacity for its planning area population density category, or the remaining need, whichever is less, within three years of the date of issuance of its certificate of approval.

(i) For initial certification of home health agencies and where public need is established herein, priority consideration will be given to applicants who demonstrate that they will:

(1) reduce the utilization of general hospital and residential health care facilities in the planning area;

(2) provide charity care in excess of that specified in paragraph (h) (4) of this section; or

(3) provide, in addition to the minimum services required by this Subchapter, three or more of the following which include social work, occupational therapy, physical therapy, speech/language pathology and nutrition services.

(j) Any application wherein a determination of public need is made pursuant to this section shall be subject to the following: (1) (i) The Public Health Council and/or the commissioner, as appropriate, may, during the processing of an application, propose to disapprove the application solely on the basis of a determination of public need in advance of the consideration of the other review criteria required by article 36 of the Public Health Law without, however, waiving the right to consider such other criteria at a later date.

(ii) The local health systems agency may, during its review process, determine to recommend disapproval of an application solely on the basis of a determination of public need.

(2) In the event the Public Health Council and/or the commissioner proposes to disapprove an application on the basis of a lack of public need and the applicant requests a hearing, the Public Health Council and/or the commissioner, as appropriate, may direct the completion of the other reviews required by article 36 of the Public Health Law. The application shall then be returned to the Public Health Council and/or the commissioner as appropriate, to consider such reviews, the results of which may then be included as grounds for the proposed disapproval to be considered at the hearing. If the Public Health Council and/or the commissioner, as appropriate, directs the completion of such reviews, a copy of the report containing the results of the reviews shall be mailed to the applicant at least 60 days prior to the date set for hearing.

(3) In the processing of an establishment application, the commissioner may recommend disapproval based on a review limited to a determination of public need. In the event the Public Health Council does not concur with the commissioner's recommendation of disapproval, it shall return the application to the department at which time all other required reviews shall be completed. When all other reviews are completed, the application shall be returned to the Public Health Council for action.

(k) The provisions of this section shall be evaluated by the department and the health systems agencies by January 1, 1988 to assure that projected need for certified home health agencies is adjusted to reflect changes in health care delivery and medical practice patterns, including but not limited to general hospital prospective payment, residential health care facility case mix reimbursement, improved facility discharge planning procedures, increased utilization of ambulatory care, and uniform patient assessment of potential home care recipients. This evaluation shall include an examination of the standard agency case capacity, planning areas and other factors utilized in this section.

Effective Date: 
Monday, July 2, 2012
Doc Status: 
Complete