Ala. Admin. Code r. 410-2-4-.12

Current through Register Vol. 42, No. 12, September 30, 2024

Section 410-2-4-.12 - Ambulatory Surgery

(1) Discussion. An evolution in the provision of surgical care provided in ambulatory surgery centers has taken place. As a result of cost containment measures and advances in medical technology, many surgical procedures which previously required inpatient care (both before and after the procedures) are now done on an outpatient basis.

(2) Definitions. For the purposes of this section, the following definitions shall be used:

(a) Ambulatory Surgery Center (ASC) - a health care facility, licensed by the Alabama Department of Public Health, with the primary purpose of providing medically necessary or elective surgical care on an outpatient basis and in which the patient stays less than 24 hours. Excluded from this definition are the offices of private physicians and dentists, including those organized as professional corporations, professional associations, partnerships, or individuals in sole proprietorship. Also excluded from this definition are health care facilities licensed as hospitals.

(b) Hospital-owned Ambulatory Surgery Center (HASC) - a facility either owned and operated exclusively by an existing acute care hospital or where the hospital holds majority ownership in conjunction with other entities and which is operated as a separately licensed entity distinct from the hospital, containing operating rooms which are solely and exclusively used for the provision of outpatient surgical services that, due to licensure, practice standards or other reasons, are not performed in a physician's office or in an office-based lab (OBL).

(c) Hospital Surgical Department (HSD) - operating rooms specifically designated by a hospital for performing surgical procedures, on an inpatient, outpatient, or "mixed-use" basis.

(d) Multi-Specialty Ambulatory Surgery Center (MASC) - an ASC established for the provision of outpatient surgical procedures in a variety of specialties. MASCs allow for physicians from multiple disciplines to perform surgical procedures in a centralized location that, due to licensure, practice standards or other reasons, are not performed in a physician's office or in an office-based lab (OBL).

(e) Operating Room - rooms used for the performance of surgical procedures requiring one or more incisions and which must comply with licensure standards for an operating room. Operating Rooms are not to include procedure rooms.

(f) Procedure Room - rooms designated for the performance of special procedures that do not require a restricted environment and are not considered to be operating rooms.

(g) Single-Specialty Ambulatory Surgery Center (SASC) - an ASC established for the provision of outpatient surgical procedures of a single specialty only. SASCs allow for surgical procedures to be performed that, due to licensure, practice standards or other reasons, are not performed in a physician's office or in an office-based lab (OBL).

(3)Purpose

(a) The purpose of this need methodology is to identify the number of Ambulatory Surgery Center operating rooms needed at least three (3) years into the future to assure the continued availability of quality ambulatory surgical care for the residents of the state of Alabama. Such number, as identified later in this section, shall be the basis for statewide health planning and certificate of need approval, except:

1. In circumstances that pose a threat to public health, and/or

2. When the SHCC makes an adjustment based on criteria specified later in this section

(4)Planning Policies. For the purposes of this section, the following planning policies shall apply regarding the provision of ambulatory surgical services:

(a) The methodology in (5) below shall not apply to the expansion of an existing HSD, nor shall it apply to any hospital seeking to establish an outpatient surgical department internal to the existing hospital.

(b) The methodology in (5) below shall not apply to any hospital seeking to convert up to four (4) of its existing operating rooms in a HSD for use in the creation of a HASC, provided that said conversion does not seek to add any additional operating rooms to its existing complement as reported to SHPDA on the Annual Report for Hospitals and Related Facilities for the most recent reporting period. However, the methodology in (5) below shall apply if the applicant seeks to add additional rooms to its existing complement, as reported, as a part of any conversion. Any application to create a new HASC through the conversion of existing HSD rooms shall only be allowed in the same county in which the HSD is currently located. Once a Certificate of Need is issued related to the conversion of the operating rooms in a HSD to a HASC, those rooms will be counted as a part of the CON authorized inventory for the purposes of future statistical updates to this plan. Once CONs are issued for the conversion of the maximum number of operating rooms allowed to be converted through the use of this policy, that hospital shall not qualify to apply to convert additional operating rooms through the use of this policy for a minimum of twenty-four (24) months following the licensure by the Alabama Department of Public Health of all facilities created by that applicant through this policy to allow for the impact of any new ASC created through this policy to be shown.

1. Any ORs converted using this policy shall be removed from the hospital inventory upon licensure of any ASC established through this policy by ADPH. These converted ORs shall not be reopened by the hospital after licensure of the ASC created under this policy unless and until additional action is taken by the hospital, either through the granting of a CON or a determination by SHPDA that the reopening of said converted ORs is not reviewable under CON law.

2. Furthermore, any applicant seeking to establish a HASC through the use of this provision shall affirm, as a part of their application, that the hospital shall maintain majority ownership of the HASC for a minimum of five (5) years following its initial licensure to ensure financial viability for the project.

(c) The methodology in (5) below shall apply to any hospital seeking to construct and/or operate a HASC that is not to be created through the conversion of operating rooms in an existing HSD.

(d) An HASC created through these planning policies shall be considered a MASC once established, and the methodology in (5) below shall apply to any existing HASC seeking to expand through the addition of new operating rooms.

(e) The methodology in (5) below shall not apply to any applicant seeking to establish a new SASC consisting of no more than four (4) operating rooms. The methodology in (5) below shall apply, however, to any operating rooms beyond the four (4) allowed under this policy. Applicants seeking to establish a new SASC consisting of no more than four (4) operating rooms shall need to provide, as part of their application, evidence that the SASC is needed in the service area. Once a Certificate of Need is issued related to the establishment of a SASC, those rooms will be counted as a part of the CON authorized inventory for the purposes of future statistical updates to this plan.

(f) The methodology in (5) below shall not apply to any applicant seeking to convert an existing SASC into either a MASC or a SASC of a different specialty without adding additional operating rooms, but shall apply to any applicant seeking to establish a new MASC, to expand an existing MASC, or to an applicant seeking to convert an existing SASC into a MASC that also seeks to add additional operating rooms. Any provider seeking to convert an SASC either to a MASC or to a SASC of a different specialty shall still be required to file for a CON even if the applicant does not seek to add additional operating rooms to its existing CON authorized capacity.

(g) Irrespective of (a)-(f) above, any applicant seeking to offer any service listed elsewhere in this plan which contains its own statistical need methodology or planning policies shall be required to adhere to the need criteria of that section in addition to the need criteria established in this section.

(h) An application for a Certificate of Need for an ambulatory surgical center that is exempt from the methodology in (5) below shall remain subject to the remaining criteria set forth in Alabama's Certificate of Need laws and regulations.

(i) While reviewing any application for the construction of a new Ambulatory Surgery Center, the Certificate of Need Review Board shall consider the physical location of the proposed new ASC in relation to any existing health care facilities in the same planning area to determine whether the proposed new location would create a detrimental impact upon existing providers that might negatively impact the provision of care to existing patients.

(j) The methodology in (5) below shall not apply to any applicant seeking to create or add procedure rooms to an existing facility or to create an ambulatory surgery center that only consists of procedure rooms. Any applicant seeking to create or add procedure rooms shall, in the alternative, provide as a part of any application evidence that the additional rooms are necessary for the delivery of quality outpatient surgical care to patients.

(5) Methodology

(a) The county shall be the planning area for the determination of need for additional outpatient surgery rooms in Ambulatory Surgery Centers.

(b) For the purposes of this methodology, only those ORs utilized and patient cases treated in Ambulatory Surgery Centers shall be used. ORs utilized and patient cases treated at any other location shall not be included as a part of this methodology.

(c) No application for the establishment of a new MASC shall be approved for fewer than four (4) operating rooms to allow for the financial feasibility and viability of a project. Need may be adjusted, therefore, by the Agency for any county currently showing need of more than zero (0) but fewer than four (4) operating rooms to a total of four (4) operating rooms, but only in the consideration of an application for the construction of a new facility in that county, and in situations in which no MASC currently exists in that county. Need shall not be adjusted in consideration of an application involving the expansion of an existing MASC or SASC, nor shall it be adjusted in consideration of an application involving the creation of a new MASC in a county wherein a MASC already exists.

(d) For the purposes of this methodology, the following values will be used to perform the necessary calculations: Average Time of Outpatient Surgery - 1.5 hours; Average Hours of Operation - 8 hours/day 5 days/week, 50 weeks/year; Maximum Cases per OR in one year - 1,350.

(e) In counties in which an existing CON Authorized ASC already exists, need shall be shown for additional Ambulatory Surgery Center operating rooms should the average number of cases per room in the county projected three (3) years from the most recent reported year and considering the growth of population of that county over the three (3) year planning horizon exceed 70% of the maximum, or 945 operations/room/ year. Should a need for additional operating rooms be determined, the need shall be the total number of operating rooms required to decrease the average number of cases per room in the county to 70%, or 945 cases/room/year.

(f) In counties in which an existing CON Authorized ASC does not exist, need shall be shown for Ambulatory Surgery Center operating rooms based upon the projected number of cases for residents of that county in ASC's located elsewhere and the growth in population of that county over a three year planning horizon. The total number of operating rooms shown to be needed will be that number required to sustain a utilization rate of 70%, or 945 cases/room/year.

(g) Need for new operating rooms/suites shall be determined using the following formula:

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*For counties with existing ASCs:

Y1 = total operations, ASCs in county, current reporting year

Y2 = total operations, ASCs in county, current reporting year - 1

Y3 = total operations, ASCs in county, current reporting year - 2

*For counties without existing ASCs:

Y1 = total operations, county residents in ASCs, current reporting year

Y2 = total operations, county residents in ASCs, current reporting year - 1

Y3 = total operations, county residents in ASCs, current reporting year - 2

P1 = current reporting year's population as projected by CBER^[1]

P3 = population 3 years from current reporting year as projected by CBER

** Due to the impact of COVID-19 on the delivery of ambulatory surgical services, the SHCC, in consultation with the Health Care Information and Data Advisory Council, has determined that data from the 2020 reporting period shall NOT be utilized in the determination of need for additional ASC operating rooms. SHPDA is hereby directed to omit FY2020 data, if necessary, and utilize FY2019 data in its place.

Once a CON is issued for the provision of ASC services in a county in which an ASC did not previously exist, or should all ASCs in a county cease to operate AND lose CON authority, the appropriate methodology shall be applied on the next issued statistical update.

(h) The current need for additional operating rooms/suites can be found as a statistical update to this section

(i) Additional need may be shown in situations involving a sustained high utilization rate for a single facility in a county. An applicant may apply for additional ORs, and thus the establishment of need above and beyond the standard methodology, utilizing one of the following two policies. A provider obtaining a Certificate of Need under either of the two following policies may not submit another application under either such policy for a period of twenty-four (24) months following the date the additional ORs are licensed/ become operationalized to allow for the impact of those additional ORs to be shown.

1. If the utilization rate for an ASC is greater than 80% for each of the two (2) most recent "Annual Report(s) for Ambulatory Surgery Centers" published by or filed with SHPDA, an additional need of the greater of either ten percent (10%) of the current total CON authorized OR capacity of that provider, or four (4) total ORs may be approved for the expansion of that facility, irrespective of the total utilization rate of ASC ORs of the county over that time period.

2. If an ASC is seeking to add the services of additional surgeons treating cases in a service line not currently offered at that ASC, an additional need of the greater of either ten percent (10%) of the current total CON authorized OR capacity of that provider, or four (4) total ORs, may be approved for the expansion of that facility, irrespective of the total utilization rate of ASC ORs of the county over that time period. However, these additional ORs may be added ONLY if the projected number of additional cases to be treated in this new service line for the first two (2) years following implementation of the service would cause the utilization rate of the existing ORs at that facility to increase to 80% or higher according to the calculations used to determine utilization rate as defined above.

As a part of any application seeking to expand based upon this specific policy, additional information shall be submitted showing both the current volume of cases treated by the additional surgeons currently at any other surgery locations for the previous two (2) years along with the current volume of cases treated by the ASC seeking expansion for the previous two (2) years AND the projected number of cases to be treated at the ASC for the first two (2) years following implementation of the new service line. No application shall be accepted under this policy in which the underlying utilization data for the previous two (2) years OR the projected number of cases for the first two (2) years following implementation of the new service does not support a projected utilization rate of the existing ORs at that ASC of 80% or greater for the first two (2) years following implementation of the new service line.

(j) Any ASC or Hospital that does not substantially comply with any data request made on behalf of SHPDA shall not be allowed to apply for a Certificate of Need under any provision in this section of the Plan, nor shall they be allowed to intervene in or oppose any application filed on behalf of another ASC or Hospital under any provision in this section of the Plan. Such barriers to an application for a Certificate of Need, or inability to intervene or oppose an application for a Certificate of Need, shall be applied in a manner consistent with the provisions set forth in Ala. Admin. Code r. 410-1-3-.11.

(k) The SHCC finds that a minimum of three (3) years is needed to evaluate the effectiveness of the need methodology in this section. To facilitate such review:

1. On the date this new methodology becomes effective, SHPDA shall memorialize the total number of ambulatory surgery centers, including both single- and multispecialty, and the total number of outpatient surgery rooms including all hospitals, HASCs, SASCs, and MASCs for future use. This memorialization shall also be used by SHPDA to establish and maintain the CON authorized OR capacity for each ambulatory surgery center currently licensed and operational, as well as all CON projects still active and under development, which will establish the existing state inventory of CON authorized ORs for the purposes of this methodology moving forward.

2. SHPDA shall consult with the Health Care Information and Data Advisory Council to make such amendments to the existing Annual Report for Ambulatory Surgery Centers as needed to more accurately determine the utilization of ASCs as defined by the methodology in this section. The SHCC specifically requests that any amendments to the existing Annual Report for Ambulatory Surgery Centers include the collection of additional information related to the amount of available time for all operating rooms at a facility and the total amount of surgical time (including any necessary preparatory or clean-up) the operating rooms at a facility are in use, as well as a specific breakdown of cases treated in operating rooms versus cases treated in procedure rooms.

3. SHPDA shall compile and summarize the information for the three-year period defined above, and shall provide a report to the SHCC showing the growth or decline in outpatient surgery rooms, HASCs, SASCs, and MASCs and in the total number of outpatient surgeries/procedures performed in these locations. SHPDA shall identify potential causes for such changes including population and demographic changes. Such information shall also be distributed to any interested parties, which shall be given an opportunity to provide testimony or written input to the SHCC regarding the impact of the methodology.

4. As part of the analysis of the impact of this new methodology, SHPDA shall review the number of cases in which patients travel outside of their county of residence to receive services. This information shall be used by SHPDA to provide to the SHCC information allowing for future discussions related to both the ability for an HASC to be created in a contiguous county of an existing hospital and whether the county is the appropriate planning area for ASCs. Furthermore, SHPDA shall specifically review the information collected regarding the total time available for surgeries in operating rooms and the total time the operating rooms are in use to determine if this would be a more accurate mechanism to determine need for additional operating rooms under the utilization exemption defined in (5)(i) above. Such information shall also be distributed to any interested parties, which shall be given an opportunity to provide testimony or written input to the SHCC regarding this analysis as part of those discussions.

5. Following receipt of such input, SHCC shall review the methodology to consider any needed changes.

(6) Criteria for Plan Adjustments

(a) The need, as determined by the methodology, is subject to adjustment by the SHCC as provided in Ala. Admin Code 410-2-5-.04, and the additional, specific criteria set forth below. An applicant seeking an adjustment has the burden of demonstrating extraordinary circumstances that result in the identified needs of a target population not being met by existing ambulatory surgery providers, and not able to be met in a timely fashion through application of the methodology, based on each of the following:

1. Evidence that affected residents do not have access to necessary health services that can be met through application of the methodology. Accessibility refers to an individual's ability to make use of available health resources. Problems which might affect access to care include persons living more than thirty (30) minutes travel time from a facility providing ambulatory surgical services, lack of health manpower in certain counties, and individuals being without financial resources to obtain access to care;

2. Evidence of unique, area specific circumstances demonstrating that a plan adjustment would result in health care services being rendered in a more cost effective manner. The SHCC, by adopting the need methodology herein, has determined that services in excess of the number computed to be needed are not cost effective. Therefore, a party seeking a plan adjustment would have a high burden in establishing such circumstances; and

3. Evidence that a plan adjustment would result in improvements in the quality of health care delivered to residents in the proposed county.

(b) Applicants seeking an adjustment shall address, and the SHCC shall consider, the potential detrimental financial impact on existing health care facilities in the proposed county.

(7) Inventory of Existing Resources. For a listing of Ambulatory Surgery Centers contact the Data Division as follows:

MAILING ADDRESS (U. S. Postal Service)	STREET ADDRESS Commercial Carrier)
PO BOX 303025 MONTGOMERY, AL 36130-3025	100 NORTH UNION STREET, SUITE 870 MONTGOMERY, AL 36104
TELEPHONE: (334) 242-4103	FAX: (334) 242-4113
EMAIL: data.submit@shpda.alabama.gov	WEBSITE: http://www.shpda.alabama.gov

^[1] Centers for Business and Economic Research, University of Alabama

Ala. Admin. Code r. 410-2-4-.12

Amended by Alabama Administrative Monthly Volume XXXIII, Issue No. 03, December 31, 2014, eff. 1/6/2015.

Amended by Alabama Administrative Monthly Volume XXXVIII, Issue No. 06, March 31, 2020, eff. 5/15/2020.

Adopted by Alabama Administrative Monthly Volume XLII, Issue No. 07, April 30, 2024, eff. 6/14/2024.

Author: Statewide Health Coordinating Council (SHCC)

Statutory Authority:Code of Ala. 1975, § 22-21-260(4).