It is enacted by the General Assembly as follows:

SECTION 1. Section 23-15-2 of the General Laws in Chapter 23-15 entitled "Determination of Need for New Health Care Equipment and New Institutional Health Services" is hereby amended to read as follows:

23-15-2. Definitions. -- As used in this chapter:

(1) "Person" means any individual, trust or estate, partnership, corporation (including associations, joint stock companies, and insurance companies), state, or political subdivision or instrumentality of a state.

(2) "State agency" means the Rhode Island state department of health.

(3) "Director" means the director of the Rhode Island state department of health.

(4) "Health services council" means the advisory body to the Rhode Island state department of health established in accordance with chapter 17 of this title, appointed and empowered as hereinafter provided to serve as the advisory body to the state agency in its review functions under this chapter.

(5) "Health care facility" means any institutional health service provider, facility or institution, place, building, agency, or portion thereof, whether a partnership or corporation, whether public or private, whether organized for profit or not, used, operated, or engaged in providing health care services, including, but not limited to hospitals; nursing facilities; home health agencies; inpatient rehabilitation centers; (including drug and/or alcohol abuse treatment centers licensed by the department of mental health, retardation and hospitals pursuant to chapter 40.1-24 of the general laws); health maintenance organizations; free-standing emergency care facilities; and facilities providing surgical treatment to patients not requiring hospitalization (surgi-centers) and hospice care. The term "health care facility" also includes organized ambulatory care facilities which are not part of a hospital but which are organized and operated to provide health care services to outpatients such as central service facilities serving more than one health care facility or health care provider, treatment centers, diagnostic centers, outpatient clinics, infirmaries and health centers (including alcohol, drug abuse and mental health treatment centers) and neighborhood health centers; providing, however, that the term "health care facility" shall not apply to rehabilitation centers or organized ambulatory care facilities owned and operated by professional service corporations as defined in chapter 5.1 of title 7, as amended (the "Professional Service Corporation Law"), or to a private practitioner's (physician, dentist, or other health care provider) office or a group of such practitioners' offices (whether owned and/or operated by an individual practitioner, alone or as a member of a partnership, professional service corporation organization, or association). The term "health care facility" does not include Christian science institutions operated or listed and certified by the first church of Christ, scientist, Boston, Massachusetts.

Any provider of hospice care who provides such hospice care without charge shall be exempt from the provisions of this chapter. A home health agency currently licensed pursuant to chapter 17 of title 23 which complies with the provisions of section 23-17-6 shall be exempt from the provisions of this chapter.

Any organized oupatient department of a hospital licensed by the Rhode Island department of health pursuant to chapter 23-17 providing primary care health services in conjunction with a not-for-profit senior center {ADD or not-for-profit adult day care facility ADD} through a formal affiliation agreement shall, upon submission of an exemption request subsequently approved by the state agency, be exempt from the certificate of need requirement for the provision of such primary care services; provided, however, that no exemption is provided for any other matter which otherwise would require review under this chapter. The state agency shall define primary care health services in rules and regulations.

(6) "Health care provider" means a person who is a direct provider of health care services (including but not limited to physicians, dentists, nurses, podiatrists, physician assistants, or nurse practitioners) in that the person's primary current activity is the provision of health care services for persons.

(7) "Health maintenance organization" means a public or private organization, which:

(A) Provides or otherwise makes available to enrolled participants health care services, including at least the following basic health care services: usual physician services, hospitalization, laboratory, x-ray emergency and preventive services, and out-of-area coverage;

(B) Is compensated (except for co-payments) for the provision of the basic health care services listed in subdivision (7) (A) of this section to enrolled participants by a payment which is paid on a periodic basis without regard to the date the health care services are provided, and which is fixed without regard to the frequency, extent or kind of health service actually provided; and

(C) Provides physicians' services primarily:

(i) Directly through physicians who are either employees or partners of the organization; or

(ii) Through arrangements with individual physicians or one or more groups of physicians (organized on a group practice or individual practice basis).

(D) The term "health maintenance organization" shall not include individual health care providers who contract privately with a health maintenance organization to provide health care services.

(8) "Health services" means organized program components for preventive, assessment, maintenance, diagnostic, treatment and rehabilitative services, provided in a health care facility.

(9) "Institutional health services" means health services provided in or through health care facilities and includes the entities in or through which the services are provided.

(10) "New institutional health services" means and includes:

(A) Construction, development, or other establishment of a new health care facility.

(B)(i) Any expenditure except acquisitions of an existing health care facility which will not result in a change in the services or bed capacity of the health care facility by or on behalf of an existing health care facility in excess of eight hundred thousand ($800,000) dollars which is a capital expenditure including expenditures for predevelopment activities.

(C) Where a person makes an acquisition by or on behalf of a health care facility or health maintenance organization under lease or comparable arrangement or through donation, which would have required review if the acquisition had been by purchase, the acquisition shall be deemed a capital expenditure subject to review.

(D) Any capital expenditure which results in the addition of a health service or which changes the bed capacity of a health care facility with respect to which the expenditure is made; except that the state agency may exempt from review by rules and regulations promulgated for this chapter any bed reclassifications made to license nursing facilities and annual increases in licensed bed capacities of nursing facilities that do not exceed the greater of ten (10) beds or ten percent (10%) of facility licensed bed capacity and for which the related capital expenditure does not exceed eight hundred thousand dollars ($800,000).

(E) Any health service, proposed to be offered to patients or the public by a health care facility, which was not offered on a regular basis in or through the facility within the twelve (12) month period prior to the time the service would be offered, and which increases operating expenses by more than two hundred and fifty thousand ($250,000) dollars, except that the state agency may exempt from review by rules and regulations promulgated for this chapter any health service involving reclassification of bed capacity made to licensed nursing facilities.

(F) Any new or expanded tertiary or specialty care service, regardless of capital expense or operating expense, as defined by and listed in regulation, such list not to exceed a total of twelve (12) categories of services at any one time.

(11) "New health care equipment" shall mean any single piece of medical equipment (and any components which constitute operational components of the piece of medical equipment) proposed to be utilized by a health care provider (whether practicing alone or as a member of a partnership, corporation, organization, or association) in conjunction with the provision of services to patients or the public, the capital costs of which would exceed six hundred thousand ($600,000) dollars (including in the case of health care facilities the costs for installation and any necessary costs of erection or alteration of buildings or facilities directly associated with adding the equipment); provided, however, that the state agency shall establish an accelerated review process and criteria by regulation whereby the state agency may review one for one equipment replacement.

(12) "To offer" means to hold oneself out as capable of providing, or as having the means for the provision of, specified health services or health care equipment.

(13) "To develop" means to undertake those activities which, on their completion, will result in the offering of a new institutional health service or new health care equipment or the incurring of a financial obligation, in relation to the offering of such a service.

(14) "Affected person" for purposes of this chapter means and includes, as a minimum, the person whose proposal is being reviewed, or the applicant, health care facilities located within the state which provide institutional health services; the state medical society; the state osteopathic society; such voluntary nonprofit area-wide planning agencies as may be established in the state; the state budget office; any hospital or medical service corporation organized under the laws of the state; the statewide health coordinating council; contiguous health systems agencies; and those members of the public who are to be served by the proposed new institutional health services or new health care equipment.

(15) "Predevelopment activities" means expenditures for architectural designs, plans, working drawings and specifications, site acquisition, professional consultations, preliminary plans, studies, and surveys made in preparation for the offering of a new institutional health service, exclusive of expenditures for feasibility surveys for health maintenance organizations which are funded under section 1303 of the Public Health Services Act or expenditures for planning of health maintenance organizations funded under section 1304 of the Public Health Services Act .

(16) "Cost impact analysis" means a written analysis of the effect that a proposal to offer or develop new institutional health services or new health care equipment, if approved, will have on health care costs and shall include such detail as may be prescribed by the state agency in rules and regulations.

SECTION 2. This act shall take effect upon passage.