California Health And Safety Code Section 127200
Taking into consideration the basis for decision set forthin Section 127165: (a) The office may, in individual cases, grant certificates ofneed for projects when it determines that one of the following isapplicable: (1) The applicant has provided evidence that the project will meetthe needs or reasonably anticipated needs of a special populationincluding members of a religious body or denomination who desire toreceive care and treatment in accordance with their religiousconvictions. (2) The applicant has provided evidence that the project is orwill be necessary to meet the health needs or reasonably anticipatedhealth needs of adult residents of a nonprofit community carefacility, as defined by subdivision (a) of Section 1502, that isowned by the applicant. (3) The applicant has provided evidence that, as a healthfacility, it has developed community support for its services asindicated by its current utilization patterns, and has providedhealth care services for at least five years. (4) The applicant has provided evidence, when the project is for anew health facility or an increase in bed capacity, that there willbe an equal or greater reduction in bed capacity in other healthfacilities in the area. (5) The applicant has provided evidence that it will deliver theservice proposed to be offered as a result of the project in aninnovative and more competitive manner, or at a lower cost than theservice is provided by other facilities in the area, and has providedevidence that the quality of care offered will be comparable to thatoffered by other facilities in the area; or that as a healthfacility, it serves a disproportionate volume of publicly fundedpatients, or patients for whom the cost of health care isuncompensated. The office director shall, as he or she deemsappropriate, ensure fulfillment of the requirements of thissubdivision through conditions mutually agreed upon by the applicantand the office. This paragraph does not apply to projects for theaddition of licensed skilled nursing beds by construction orconversion. If an applicant is requesting the exercise of discretion by theoffice director pursuant to this paragraph, prior to granting acertificate of need, the office director shall receive an evaluationfrom the department assessing the potential negative financial impactupon any county owned or operated general acute care hospital. Ifthere is a significant negative potential financial impact, acertificate of need shall not be granted. Nothing in this subdivision requires the office to grantcertificates of need as authorized by this section in any of theabove categories. (b) In the case of a project for a service to be provided by orthrough a health maintenance organization for which assistance may beprovided under Title XIII, the office shall grant a certificate ofneed for the project unless the office director finds that theproject is not needed by the enrolled or reasonably anticipated newmembers of the HMO or proposed HMO or the beds or services to beprovided are available from non-HMO providers or other HMO's in areasonable and cost-effective manner that is consistent with thebasic method of operation of the HMO. For the purposes of subdivision (b), beds or services shall not beconsidered available if they are any of the following: (1) Dispersed in more than one facility when the HMO's basicmethod of operation is to provide services through medical centersthat consist of a hospital and medical offices at the same site. (2) Not available under a contract of at least five years'duration, with an option to extend the contract for an additionaltime period as is reasonably necessary for the HMO to obtain acertificate of need and to construct and equip and begin operatingalternative beds or service, in the event the non-HMO provider orother HMO gives notice that it intends to terminate the contract. (3) Not available under circumstances that would grant full andequal staff privileges to an adequate number of physicians associatedwith the HMO in appropriate specialties, or otherwise notconveniently accessible through physicians and other health careprofessionals associated with the HMO. (4) Not available in a manner that is administratively feasible tothe HMO. (5) More costly than if the services were provided by the HMO. In order to qualify under this section, a project that is proposedto be provided by or through a health maintenance organization forwhich assistance may be provided under Title XIII, and that consistsof or includes the construction, development, or establishment of anew inpatient health care facility, shall be a facility that theoffice determines will be utilized by members of the healthmaintenance organization for at least 75 percent of the projectedannual inpatient days, as determined in accordance with therecommended occupancy levels under the applicable health systemsplan. (c) In the case of a project for a service to be provided by orthrough an HMO, the office shall not deny a certificate of need withrespect to the service (or otherwise make a finding that the serviceis not needed) in those cases (1) when the office has granted acertificate of need that authorized the development of the service,or expenditures in preparation for the offering or development (orhas otherwise made a finding that the development or expenditure isneeded), and when the offering of this service will be consistentwith the basic objectives, time schedules, and plans of thepreviously approved application. However, the office may impose alimitation on the duration of the certificate of need that shallexpire at the end of this time unless the health service is offeredprior thereto, or (2) solely because there is an HMO of the same typein the same area, or solely because the services are not discussedin the applicable health systems plan, annual implementation plan,state health plan, or state medical facilities plan. (d) A project for a service to be provided by, or through, an HMOthat is subject to review under this chapter shall remain subject tothat review, unless the federal law states that an approved stateprogram shall not require a certificate of need for the project. The office shall establish uniform procedures and criteria forapproving applications under this section.