HB370 Alabama 2012 Session

Summary

Primary Sponsor

Ron Johnson

Republican

Co-Sponsor

Mary Sue McClurkin

Session

Regular Session 2012

Title

Certificate of need application, fees, assessment of costs, direct appeals to Court of Civil Appeals, Secs. 22-21-265, 22-21-270, 22-21-271, 22-21-275 am'd (2012-20248R1)

Summary

HB370 updates Alabama's certificate of need system by adjusting fees, adding a temporary online filing surcharge, creating direct appeals to the Court of Civil Appeals, and adding several exemptions and new requirements for SHPDA and CON reviews.

What This Bill Does

Imposes a temporary $2,000 surcharge on each CON application and a $300 surcharge on each reviewability determination to fund an online filing system, with the surcharge ending once the system is implemented. Allows direct appeals from SHPDA decisions to the Court of Civil Appeals, with the administrative record transmitted to the court and the appeal governed by appellate procedures. Expands CON exemptions (for certain Department of Mental Health facilities, equipment replacement under conditions, nonclinical campus modernization, nursing home bed increases under criteria, and cross-county home health referrals) and creates a digital hospital exemption with strict technological and cost requirements. Reforms CON fees, extension rules, and review timelines, and creates separate funds to administer and enforce the CON program.

Who It Affects

• Health care providers/applicants for a certificate of need (CON) and those involved in CON proceedings, who face new or adjusted fees and potential exemptions.
• Rural hospitals, which may benefit from reduced fees or specific exemptions.
• Department of Mental Health and Mental Retardation facilities and related contracts, which may be exempt from CON.
• Home health agencies that may refer patients outside their service area under certain conditions and reporting requirements.
• Nursing homes and facilities with bed-expansion plans, due to occupancy, capital expenditure, and sunset requirements.
• Hospitals planning to replace with a digital hospital, due to the digital hospital exemption and its criteria.
• SHPDA and the Statewide Health Coordinating Council, due to new funding, procedures, and appeals rules.
• The Court of Civil Appeals, which would handle direct CON-related appeals.

Key Provisions

• Temporary surcharge: a $2,000 fee on each CON application and a $300 fee for each reviewability determination to fund an online filing system, terminating when the system is implemented.
• Direct appeals: SHPDA decisions may be appealed to the Court of Civil Appeals; the administrative record must be transmitted within 30 days, and appeals follow the Alabama Rules of Appellate Procedure.
• Exemption (a) – MH/MR facilities: certain MH facilities with contracts deemed the primary income source are exempt from CON; exemption also includes a replacement equipment provision with specific conditions for exemption and a rural hospital fee reduction to 25% of the non-rural fee for determinations.
• Exemption (b) – nonclinical campus projects: modernization or construction of nonclinical buildings, parking, or noninstitutional capital items on an existing campus are exempt if they do not enable new institutional services; SHPDA to define an appeals process.
• Exemption (e) – nursing home bed expansions: allows increases up to 10% of beds or 10 beds, with occupancy and capital expenditure conditions and a sunset of December 31, 2005 (unless renewed); requires 90-day filing window (Jan 1–Mar 31) for exemption applications; occupancy benchmarks and prior exemptions counted toward calculations.
• Exemption (f) – home health referrals: existing home health agencies may accept referrals from contiguous counties without a CON if no branch office is opened and capital expenditures stay under $500; SHPDA to require notification within 14 days of first referral; no fee for servicing outside service area, but possible costs recovered by SHPDA.
• Exemption (g) – digital hospital: replacement by a digital hospital is exempt if it meets detailed digital system, access, and cost criteria (minimum $100 million), replaces an existing hospital in the same county, and operates within specified bed/service limits; first digital hospital has unique location and program requirements and appeal rights; sunset or continuation depends on milestones.
• Certificate of Need timelines: CONs are valid for 12 months with possible 12-month extensions; extensions require a filing fee up to 25% of the original; failure to begin or complete could nullify the CON unless tolling or extensions apply.
• Transfers and ownership: CONs are generally non-transferable, with specific allowances for parent-subsidiary corporate groups; stock transfers or mergers do not automatically transfer the CON.
• Fee structure and use: application fees are 1% of estimated project cost (max $12,000, indexed) with reduced amounts for certain nonprofit or high Medicaid situations; minimum fees set by SHPDA; additional fees may be charged for opinions and non-routine data; all fees are nonrefundable and kept in a separate enforcement fund; a general fund appropriation may cover costs beyond collected fees.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Health