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OREGON HEALTH AUTHORITY,
PUBLIC HEALTH DIVISION
DIVISION 615
DEMONSTRATION OF NEED FOR PSYCHIATRIC INPATIENT BEDS
333-615-0000
General
The purpose of this division is to assure provision of accessible, quality care with the least incremental impact in overall community health care capital and operating costs. Treatment of the psychiatric patient requires special staff, facilities, programs and management policies. These may be accomplished either in a unit in a general hospital, or in a specialized hospital. In order for Oregon to have a complete mental health system, both general hospital units and multispecialty units are needed. However, because of Oregon's population size and distribution, the need for subspecialty services is limited, and the need for local access to quality general psychiatric inpatient care is great. Therefore, the number of large, multispecialty, freestanding units feasible in Oregon is limited. The applicant, in providing information to the Public Health Division to demonstrate need for psychiatric inpatient beds other than those directly operated by the federal Veterans' Administration or the state Addictions and Mental Health Division, must satisfy the criteria specified in the Certificate of Need Application Instructions (chapter 333, division 580). Where appropriate, responses to these instructions shall be based on the following:
(1) The methodology of this division (division 615), in order to estimate the appropriate number of psychiatric beds; and
(2) Comparison of estimates of costs and quality arising from conversion of certain of the identified existing licensed capacity, to estimates of costs and quality generated by creation of a new facility.
(3) Statements of preference or priority in this division are expressions of general policy based on Oregon statute and the current literature. Such statements do not necessarily preclude possible approval of an application embodying a less preferred or a lower priority characteristic. Rather, the applicant must bear the burden of demonstrating that any such features are compensated for by other aspects of a proposal, in order to best achieve the policy of ORS 442.025(1). For example, freestanding units under new licenses are not precluded, but the lack of feasible alternatives which better implement state policy must be demonstrated.
(4) In reviewing applications for psychiatric inpatient beds, the division, recognizing that treatment of the psychiatric patient requires special staff, facilities, programs and management policies, shall critically evaluate any proposal for a psychiatric unit which incorporates:
(a) Routine interchangeability of general psychiatric and general acute care in the same unit or on a "swing bed" basis;
(b) Conversion of existing licensed capacity to psychiatric use amounting to no more than minimal cosmetic changes to existing patient rooms without meeting state licensing standards in applicable Public Health Division rules, or Joint Commission on Accreditation of Healthcare Organization standards, as appropriate;
(c) Consideration of costs outweighing adequate quality;
(d) Evidence of insufficient opportunity for potentially affected clinicians to present their views and to obtain serious consideration of these views by any applicant.
(5) To be ruled complete, an application for psychiatric beds must include a narrative organized in the following sequence of separate major sections:
(a) A complete response to each rule of division 615;
(b) If a new facility is proposed, analysis under division 590, the rules for acute hospital beds in general;
(c) Based on the foregoing, and other information included directly or as appendix materials or exhibits, a complete response to the general application form narrative instructions regarding the general statutory criteria which apply to all health care facility requests, in the sequence given in the instructions.
Stat. Auth.: ORS 431.120(6), 442.025& 442.315
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
333-615-0010
Definitions
The definitions of OAR 333-590-0010 shall apply, in addition to the following:
(1) As used in this division, "alternatives" include, but need not be limited to, the following:
(a) Nonhospital, 24-hour residential treatment;
(b) Hospital or nonhospital day or partial hospitalization programs;
(c) Outpatient treatment by a qualified mental health professional (a licensed psychiatrist or clinical psychologist, a psychiatric nurse practitioner within the legal scope of practice, or licensed or registered clinical social worker); and
(d) Outpatient treatment through a mental health program approved by the Addictions and Mental Health Division.
(2) As used in this division, psychiatric "subspecialty beds" do not include general or adult beds, nor chemical dependency treatment beds (see division 600 of this chapter), but do include:
(a) Holding rooms and freestanding mental health emergency centers, created by a public or private agency under ORS 426.241, in response to legislative policy reductions in the operating capacity of Oregon State Hospital with respect to patients originating in the service area, when the general psychiatric inpatient unit or units in that service area, as defined in OAR 333-615-0030(1)(b), do not offer appropriate programs to meet the needs of the anticipated utilizing population;
(b) Child;
(c) Adolescent;
(d) Geriatric;
(e) Drug;
(f) Secure;
(g) Long-term intensive treatment;
(h) Long-term maintenance care; and
(i) Dual diagnosis (person with both a mental health and a substance abuse diagnosis).
(3) Psychiatric inpatient service areas are defined in OAR 333-615-0030 according to the principles stated in OAR 333-615-0020.
(4) Quality of psychiatric inpatient care for purposes of this division is defined in OAR 333-615-0050.
Stat. Auth.: ORS 431.120(6) & 442.315
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
333-615-0020
Principles
Under ORS 442.025(1), state policy gives priority to the achievement of reasonable access to quality health care at a reasonable cost. It is legislative policy under ORS 430.610(3) that to the greatest extent possible, mental health services be delivered in the community where the person lives in order to achieve maximum coordination of services and minimum disruption in the life of the person. Under ORS 430.021(3), it is state policy to encourage and assist community general hospitals to establish psychiatric services. Consistent with legislative policy, priority is given in this division to establishment of access to local hospitalization in geographically distributed, quality psychiatric units, within community hospitals; and hospitalization is to be utilized only when an individual's needs cannot be safely and effectively met by less costly alternatives. The following principles, therefore, are applicable to this division:
(1) Service areas for general psychiatric beds other than those directly operated by the state Addictions and Mental Health Division or the federal Veterans' Administration, shall be delineated so as to encourage the greatest feasible utilization of community hospitals, and of alternatives to hospitalization, by both private and public patients. The division will use as a basis for general psychiatric inpatient service areas the state administrative districts. The districts are based on natural market areas defined by geographical barriers, transportation networks and historical patterns of general trade. In addition, community mental health services in Oregon are organized on a county or multicounty basis, compatible with these districts, thus facilitating planning and coordination with, and access to, local inpatient services in such districts.
(2) Service areas for psychiatric specialty beds, other than those directly operated by the state Addictions and Mental Health Division or the federal Veterans' Administration, as defined in OAR 333-615-0010(2), other than holding rooms, shall be delineated so as to assure availability of quality service at reasonable cost in economically viable subspecialty units:
(a) Factors to be considered in delineating such service areas shall include the sizes of the respective populations at risk in Oregon; the current rates of inpatient hospitalization in Oregon for those groups; and the availability, accessibility, quality and levels of utilization of existing inpatient services addressing the needs of those groups in Oregon. These factors will generally lead to delineation of subspecialty service areas according to health service area, multiple health service area or statewide boundaries;
(b) In order to assure viable, quality subspecialty units, economies of scale shall be given greater weight than geographical distribution;
(c) In estimating subspecialty need, the state will consider the population ratios proposed in "total system" models such as Nebraska (1981) and California (1981);
(d) For each subspecialty service, an applicant will be expected to indicate the anticipated percentage and origins of utilization from outside the general psychiatric service area, based on section (1) of this rule, in which the facility is, or will be located, and to provide the evidence and assumptions related to the analysis.
(3) Service areas for holding rooms shall be based on local considerations of access, demand and feasibility.
(4) The development of a number of psychiatric units, of economically and programmatically viable size, in general hospitals, rather than the development of a few large, multispecialty, freestanding facilities, shall be emphasized. The division recognizes that equivalent programs, in terms of quality, can be developed in either setting, to meet the needs of particular populations; that, in order to attract and retain staff, as well as for quality program design and economic efficiency, consideration must be given to minimum feasible unit size; but that, nonetheless, programs located within acute general hospitals have the advantage of close administrative relationships and proximity to acute medical and surgical consultation, diagnosis and treatment. Among the considerations leading to an emphasis on geographically decentralized psychiatric units in general hospitals, are the following:
(a) Improved geographic access in the various regions of the state, and therefore;
(b) Greater likelihood of reduced utilization of state and federal hospitals for short-stay intensive inpatient care;
(c) Reduced separation of psychiatric patients and staffs from specialty medical care for psychiatric patients at a reasonable cost, substantial numbers of whom have that need;
(d) Improved access to quality psychiatric staff for general medical patients;
(e) Greater access to diversity in medical and support staff, and extent of ancillary services available;
(f) Possibility of reduced construction and operating costs, through development of economically and programmatically viable sized units by conversion of small amounts of existing licensed capacity, where available, rather than new, large scale freestanding construction;
(g) Relative ease of reconversion of the unit at minimal cost, to other hospital associated use if psychiatric utilization is so low as to necessitate closing the unit;
(h) Smaller size of unit necessary to maintain quality at reasonable cost per treatment, because indirect costs are spread over a larger base; and reduced impact of smaller unit on ability of other, existing units, serving the same population, to maintain quality at reasonable cost per treatment.
(5) Demonstration of need for general psychiatric beds will be population based, rather than facility based. According to the Office for Oregon Health Policy and Research studies of actual utilization in Oregon, taken together with legislative reduction of the number of inpatient days mandated for coverage under group health insurance policies in Oregon, the "range of need" criteria based on the then available literature and consultant advice, together with existing provisions in this chapter, provide adequate safeguards against overbedding, but the legislative policy requires more stringent standards for demonstration that any proposed beds are the appropriate response to need for psychiatric care. Therefore, there shall be a moderate standard of evidence of need if a project would result in up to .40 beds per 1,000 population in a service area in the third year after the date of the letter of intent; and a high standard, if the result would exceed .40. The bed-to-population ratio shall not be taken, by itself, as evidence justifying a certain number of beds in a service area. In determining need, the division shall take into account and the applicant shall supply, for each factor in subsections (a) to (f) of this section, a numerical, descriptive and analytic response sufficient for the division to take each factor into account:
(a) The historical utilization of psychiatric inpatient beds by persons in the service area involved;
(b) The historical utilization in other Oregon service areas of comparable size, population and characteristics; and
(c) Based on the level of placement criteria developed by the Office for Oregon Health Policy and Research or developed by insurers under ORS 743.556(16)(b), findings that, with limited exceptions based on clinical judgment in individual cases, inpatient beds are needed for immediate, short-range control of symptoms and protection of the patient when less intensive or supportive placement will not suffice; or for immediate, short-range protection of the community;
(d) The major portion of nonstate, nonfederal inpatient stays are expected to be 12 to 15 days. Approximately 10 percent of stays, at most, are expected to be longer term: Seriously disturbed, usually younger, patients for whom the benefits of 30 to 40 days of hospitalization exceed those of brief hospitalization followed by systematic, long-term residential or outpatient care; and a limited number of chronically mentally ill persons who cannot be maintained safely in the community;
(e) Inpatient beds are not considered the major resource for continued treatment of the typical schizophrenic patient, which, according to the literature, is usually most effective and economical when provided in other ways;
(f) Alternatives, as defined in OAR 333-615-0010(1), do not replace necessary inpatient utilization as described in subsections (c), (d) and (e) of this section, but are usually more effective and economical for meeting other needs for mental health treatment and care.
Stat. Auth.: ORS 430.021(3), 430.610(3), 431.120(6), 442.025, 442.315 & 743.556(16)
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
333-615-0030
Estimates of Need
The following methods are applicable to the interpretation of OAR 333-580-0040(1):
(1) Based on OAR 333-615-0020(1), service areas for general psychiatric beds shall be identified as follows:
(a) Geographic service areas for general acute, nonsubspecialty psychiatric beds, other than those directly operated by the state Addictions and Mental Health Division or the federal Veterans' Administration, may be less than an entire health service are in order to maximize access provided there is sufficient projected population in the third year after the date of the letter of intent to make possible an economically feasible inpatient unit of acceptable quality, low capital cost and low operating costs. Thus, for example in health service area I, Clatsop-Columbia-Tillamook could be considered separately from Multnomah-Washington-Clackamas. Within a given health service area, all service areas shall be defined at one time, rather than proceeding application by application;
(b) The service areas described in subsection (a) of this section shall in general consist of single state administrative districts, or combinations of such areas. Available patient origin data may be interpreted by the division and taken into account in adding or deleting minor portions of such areas, or in combining districts. The division shall consider whether a lesser area, or a combination of areas, will better serve the policies and principles of this division; whether there are, or will be, enough clinicians in practice to staff the program; and whether there will be sufficient diversity of staff to meet the needs of the service area. The geographical units on which general psychiatric inpatient service areas shall be based will be the 14 state administrative districts, which are as follows:
(A) In health service area I: Clatsop-Columbia-Tillamook; Multnomah-Washington-Clackamas;
(B) In health service area II: Marion-Polk-Yamhill; Benton-Linn-Lincoln; Lane; Douglas; Coos-Curry; Jackson-Josephine;
(C) In health service area III: Hood River-Sherman-Wasco; Crook-Deschutes-Jefferson; Klamath-Lake; Gilliam-Grant-Morrow-Umatilla-Wheeler; Baker-Union-Wallowa; Harney-Malheur.
(c) The service areas identified in subsection (b) of this section shall be used for population-based review, as required by state and federal law. The methods of this division are intended to assure that population needs are met by the service or services within the service area. Different facilities within a given service area share the responsibility for meeting the needs of the population of that area;
(d) Based on OAR 333-615-0020(2), the geographic service areas for subspecialty psychiatric beds, other than those directly operated by the state Addictions and Mental Health Division or the federal Veterans' Administration, as defined in OAR 333-615-0010(2), other than holding rooms, shall be the state as a whole;
(e) The geographic service areas for holding rooms shall be determined by the division on a case-by-case basis;
(f) Clinicians in each part of the state are encouraged to work with prospective applicants to develop proposals which meet the general psychiatric inpatient needs of individual service areas and/or subspecialty service areas.
(2) Need for beds per 1,000 population in the service area shall be evaluated in relation to availability of alternatives according to the following criteria. A complete description of all alternatives under subsection (a) or (b) of this section means more than a list; it means at least, for each type of alternative listed in OAR 333-615-0010(1), an inventory with provider names, addresses, bed or slot capacity, and occupancy or utilization averages for each of the past several years:
(a) If a proposed project would result in up to .40 beds, other than those directly operated by the state Addictions and Mental Health Division or the federal Veterans' Administration, per 1,000 population in the third year following the date of the letter of intent, a complete description of all alternatives, as defined in OAR 333-615-0010, available in the service area shall be required; there shall be substantial evidence that appropriate existing alternatives in the service area will be fully utilized; there shall be substantial evidence that further development of alternatives by the applicant is not feasible; and there shall be substantial evidence that further development of less costly or more effective alternatives by any other prospective provider is not feasible. In addition, with respect to the proposed project itself, there shall be substantial evidence that project design and program alternatives have been considered and evaluated comparatively, with the least costly one selected that will meet identified need without substantial adverse impact on the quality of patient care;
(b) If the consequence of approval of a project would be in excess of .40 beds per 1,000 population in the third year following the date of the letter of intent, evidence submitted by the applicant shall:
(A) Demonstrate an average occupancy of applicant's existing capacity, if any, in excess of the appropriate criterion in Table 1, based on the method in section (3) of this rule, for the year ending September 30 prior to the formal application; and
(B) Be comprehensive with respect to the availability and feasibility of appropriate alternatives by meeting the requirements of subsection (a) of this section.
(c) The division may take into account evidence with respect to problems of quality or cost in other units serving the area in evaluations under subsection (b) of this section;
(d) In future years, by amendment of this rule, the division may raise the population-based limit at the same time as programmed decreases in utilization of state and federal beds serving the service area take place. This, however, may not be necessary if alternatives become more available and the scope of reimbursement is expanded. Because of the factors cited in OAR 333-615-0020(5), it may be appropriate, in future years, to reduce the population-based limit.
(3) When expansion of an existing unit is under consideration, an allowance for peak-to-average utilization ratios may be made:
(a) An average bed utilization consistent with the principles and methods of this division shall be evaluated for peak bed need by applying to the anticipated average census, a formula taking into account the anticipated peak demand, allowing for greater peak-to-average ratios for smaller units;
(b) The average census entered into the formula shall be consistent with the principles and methods of this division and justified by the applicant on the basis of historical utilization from the service area and any reasonably anticipated growth in the population at risk;
(c) The method to be used should be analogous to that found in OAR 333-590-0050, except that the standard deviation is estimated by raising the anticipated average census to the 0.468 power rather than taking its square root (the 0.500 power). The standard deviation is then multiplied by a factor of 2.06 (7.30 days/year at or above 100 percent occupancy) for units in service areas with other, interacting units, or a factor of 2.33 (3.65 days/year at or above 100 percent occupancy) or a unit which is the only one in its service area, or which can be shown not to interact with others in its service area;
(d) The results of calculations according to this method, for a range of values are shown in Table 1;
(e) The calculation in subsection (c) of this section does not take into account the extent to which elective admissions could be postponed, so as to smooth out the variations and reduce the peak-to-average ratio. This calculation only sets an upper limit of peak bed need for a given average bed need;
(f) The division will not automatically approve an application requesting the peak needs indicated by the formula without examining the schedulability of the proposed case load and the commitment to scheduling on the part of the applicant.
(4) General considerations applicable to review of need for psychiatric inpatient beds include the following:
(a) As with hospital inpatient beds in general and in other specialties, new psychiatric beds, whether general or subspecialty, except under unusual circumstances with respect to nonavailability, access and less costly alternatives, shall not be approved if the net effect of the project would be additional licensed short-term acute inpatient capacity (other than state Addictions and Mental Health Division operated or federal hospital beds) in the psychiatric service area, unless additional acute hospital beds are justified in that area by the criteria for acute inpatient beds in division 590 of this Chapter. The principles and methods in division 590 shall apply in reviewing applications for psychiatric beds to the extent that the issues involved are not addressed in this division;
(b) Unusual circumstances shall be determined in relation to an evaluation of the feasibility of meeting service area needs by the higher priority methods indicated in OAR 333-615-0040;
(c) Review of subspecialty beds other than chemical dependency inpatient beds, holding rooms, and freestanding mental health emergency centers shall take into account historical service area utilization and substantiated projections, rather than according to the population-based criteria for general psychiatric beds in this rule. The service areas for subspecialty beds are defined in subsections (1)(d) and (e) of this rule. Need for subspecialty units shall be evaluated with respect to population-based need; availability of existing capacity in the service area; effect on viability of existing quality providers; and proposed size of the unit in relation to economies of scale;
(d) Chemical dependency inpatient beds shall be reviewed according to the principles and methods of division 600 of this Chapter;
(e) Need for holding rooms and freestanding mental health emergency centers shall be evaluated in relation to local considerations of access, demand and feasibility.
[ED. NOTE: Tables referenced are available from the agency.]
Stat. Auth.: ORS 431.120(6) & 442.315
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
333-615-0040
Availability of Alternative Uses for Resource
The following principles shall be applicable to the interpretation of OAR 333-580-0050(1) and (2). The term "quality unit" is explained in OAR 333-615-0050:
(1) The methods of meeting acute psychiatric bed need, in order of preference, shall be:
(a) Conversion of existing licensed space to purposes of psychiatric treatment where such conversion is feasible to provide an adequate inpatient program at less cost than building new licensed space, especially when the average daily census for the facility as a whole for the most recent year ending September 30, converted to expected peak occupancy under the methods of OAR 333-590-0050(8) and (9), does not exceed the current licensed number of beds at the facility;
(b) A project resulting in the smallest feasible net increase in acute licensed capacity within an existing general hospital or specialty hospital license, especially when the average daily census to the facility as a whole, for the most recent year ending September 30, converted to expected peak occupancy under the methods of OAR 333-590-0050(8) and (9), equals or exceeds the current licensed number of beds at the facility;
(c) A separately licensed new psychiatric hospital, not part of a general hospital, that will provide adequate psychiatric inpatient care at the most reasonable charges per day and per spell of treatment, for care that must be rendered on an inpatient basis, taking into consideration the factors in OAR 333-615-0000(2).
(2) A proposed psychiatric inpatient bed project shall be related to alternatives, as defined in OAR 333-615-0010(1), with preference given in the following order:
(a) Projects which include development of alternative care resources as part of the project, if an unmet need for such resources in the service area is demonstrated;
(b) Projects for which formal arrangements, together with triage criteria and mechanisms, are documented in the application with respect to all levels of low cost alternative care resources listed in OAR 333-615-0010(1). Documentation of triage criteria and mechanisms should include discussion of the relation of such criteria to the level of placement criteria developed by the Office of Health Policy and insurers under ORS 743.556 (16)(b). Applicants should show that their triage criteria and mechanisms will be consistent with such level of care screening criteria.
(3) If, in the service area defined in OAR 333-615-0030(1), there does not exist a quality unit of minimum economically viable size, sections (1) and (2) of this rule apply.
(4) If, in the service area defined in OAR 333-615-0030(1), there does exist one quality unit, and its occupancy (from the designated service area) is above the appropriate criterion in Table 1 for the year ending September 30 preceding the formal application, and available private acute beds do not exceed the interim population-based limit indicated in OAR 333-615-0030(2), a minimum economically viable increment may be needed. In addition to sections (1) and (2) of this rule, the following options will be considered, in order of preference:
(a) The existing quality unit may be expanded;
(b) An additional unit in the service area may be developed, provided that considerations of cost, access and quality outweigh the estimated economic advantages, if any, of expansion of the existing unit.
(5) If, in the service area defined in OAR 333-615-0030(1), there exist two or more units, sections (1), (2) and (4) of this rule apply, preference being given to expansion of the highest quality existing unit unless consideration of the factors in subsection (4)(b) of this rule leads to preference for an additional unit.
(6) In evaluating the relationship of any proposed project to the existing health care system of the service area, the division shall address possible compromising of quality of care. The division shall consider the conformity to state safety and program standards of both the proposed project and existing, related health services now provided to the population of the service area; the impact of the project, once completed and operational, upon the financial ability of providers of related services to maintain present quality; and the feasibility that the proposed project will be sufficiently efficient to maintain quality standards at reasonable cost. Impact on total community health care costs, not merely charges per day or charges per stay, shall be considered.
[ED. NOTE: The Tables referenced are available from the agency.]
Stat. Auth.: ORS 431.120(6), 442.315 & 743.556(16)
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
333-615-0050
Quality and Costs
All proposed psychiatric beds must meet the licensure, certification and accreditation criteria of the Public Health Division, Medicare and the Joint Commission on on Accreditation of Health-care Organizations, as appropriate. "Quality" for purposes of review of certificate of need proposals is a description of threshold factors to be considered, not a presumption of clinical judgment, nor a substitute for the licensing or accreditation functions. A proposal for a quality psychiatric unit shall include explicit policies, and specific examples and detail regarding each factor below:
(1) Triage criteria and mechanisms, including documentation that such criteria and mechanisms will be consistent with the level of placement criteria developed by the Office of Health Policy and insurers under ORS 743.556(16)(b);
(2) Data and record systems;
(3) Length of stay related to treatment goals, and averaging no more than 15 days for treatment of adults;
(4) Nonmaintenance, high-level treatment goals beyond mere restoration to the level just permitting release;
(5) Low recidivism; compare to data available;
(6) Rates which reflect low capital and operating costs and a justifiable rate of return; and
(7) Rapid access to quality general and multispecialty medical inpatient care.
Stat. Auth.: ORS 431.120(6), 442.315 & 743.556(16)
Stats. Implemented: ORS 431.120(6) & 442.315
Hist.: HD 13-1994, f. & cert. ef. 4-22-94
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