RELATES TO: KRS 216B.010, 216B.085, 216B.086, 216B.090, 216B.095, 216B.990
STATUTORY AUTHORITY: KRS 194A.030, 194A.050, 216B.040(2)(a)1
NECESSITY, FUNCTION, AND CONFORMITY: KRS 216B.040(2)(a)1 requires the Cabinet for Health and Family Services to administer Kentucky's Certificate of Need Program and to promulgate administrative regulations as necessary for the program. This administrative regulation establishes the requirements for filing, hearing, and show cause hearings necessary for the orderly administration of the Certificate of Need Program.
Section 1. Definitions. (1) "Cabinet" is defined by KRS 216B.015(5).
(2) "Certificate of Need Newsletter" means the monthly newsletter that is published by the cabinet regarding Certificate of Need matters and is available on the Certificate of Need Web site at http://chfs.ky.gov/ohp/con.
(3) "Days" means calendar days, unless otherwise specified.
(4) "Formal review" means the review of applications for Certificate of Need which are reviewed within ninety (90) days from the commencement of the review as provided by KRS 216B.062(1) and which are reviewed for compliance with the review criteria set forth at KRS 216B.040 and 900 KAR 6:070.
(5) "Nonsubstantive review" is defined by KRS 216B.015(17).
(6) "Office of Inspector General" means the office within the Cabinet for Health and Family Services that is responsible for licensing and regulatory functions of health facilities and services.
(7) "Office or clinic" means the physical location at which health care services are provided.
(8) "Owner" means a person as defined in KRS 216B.015(21) who is applying for the Certificate of Need and will become the licensee of the proposed health service or facility.
(9) "Practice" means the individual, entity, or group that proposes to provide health care services and shall include the owners and operators of an office or clinic.
(10) "Proposed findings" means the submission of a proposed final order by the applicant or an affected party for review and consideration by the hearing officer.
(11) "Proposed service area" means the geographic area the applicant proposes to serve.
(12) "Public information channels" means the Office of Communication and Administrative Review in the Cabinet for Health and Family Services.
(13) "Public notice" means notice given through:
(a) Public information channels; or
(b) The cabinet's Certificate of Need Newsletter.
(14) "Secretary" is defined by KRS 216B.015(25).
(15) "Show cause hearing" means a hearing during which it is determined whether a person or entity has violated provisions of KRS Chapter 216B.
Section 2. Filing. (1) The filing of all documents required by this administrative regulation shall be made with the Office of Health Policy, CHR Building, 4 WE, 275 East Main Street, Frankfort, Kentucky 40621 on or before 4:30 p.m. eastern time on the due date.
(2) Filings of documents, other than Certificate of Need applications and proposed hearing reports, may be made by facsimile transmission if:
(a) The documents are received by the cabinet by facsimile transmission on or before 4:30 p.m. eastern time on the date due; and
(b) An original document is filed with the cabinet on or before 4:30 p.m. eastern time on the next business day after the due date.
(3) The Office of Health Policy shall endorse by file stamp the date that each filing is received and the endorsement shall constitute the filing of the document.
(4) In computing any period of time prescribed by this administrative regulation, the date of notice, decision, or order shall not be included.
(5) The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or legal state holiday, in which event the period shall run until 4:30 p.m. eastern time of the first business day following the Saturday, Sunday, or legal state holiday.
Section 3. Hearing. (1)(a) Hearings on Certificate of Need matters shall be held by hearing officers from the Cabinet for Health and Family Services, Health Services Administrative Hearings Branch.
(b) A hearing officer shall not act on any matter in which the hearing officer has a conflict of interest as defined in KRS 45A.340.
(c) Any party may file with the cabinet a petition for removal based upon a conflict of interest supported by affidavit.
(2) The hearing officer shall preside over the conduct of each hearing and shall regulate the course of the proceedings in a manner that shall promote the orderly and prompt conduct of the hearing.
(3) Notice of the time, date, place, and subject matter of each hearing shall be:
(a) Mailed to the applicant and all known affected persons providing the same or similar service in the proposed service area not less than ten (10) days prior to the date of the hearing;
(b) Published in the Certificate of Need Newsletter, if applicable; and
(c) Provided to members of the general public through public information channels.
(4) A public hearing shall be canceled if each person who requested the hearing withdraws the request by giving written notification to the Office of Health Policy that the hearing is no longer required. The consent of affected persons who have not requested a hearing shall not be required in order for a hearing to be canceled.
(5) Any dispositive motion made by a party to the proceedings shall be filed with the hearing officer at least three (3) working days prior to the scheduled date of the hearing.
(6) The hearing officer may convene a preliminary conference.
(a) The purposes of the conference shall be to:
1. Formulate and simplify the issues;
2. Identify additional information and evidence needed for the hearing; and
3. Dispose of pending motions.
(b) A written summary of the preliminary conference and the orders thereby issued shall be made a part of the record.
(c) The hearing officer shall:
1. Tape record the conference; or
2. If requested by a party to the proceedings, allow a stenographer to be present at the expense of the requesting party.
(d) During the preliminary conference, the hearing officer may:
1. Instruct the parties to:
a. Formulate and submit a list of genuine contested issues to be decided at the hearing;
b. Raise and address issues that can be decided before the hearing; or
c. Formulate and submit stipulations to facts, laws, and other matters;
2. Prescribe the manner and extent of the participation of the parties or persons who will participate;
3. Rule on any pending motions for discovery or subpoenas; or
4. Schedule dates for the submission of prefiled testimony, further preliminary conferences, and submission of briefs and documents.
(7) At least five (5) days prior to the scheduled date of any nonsubstantive review hearings and at least seven (7) days prior to the scheduled date of all other hearings, all persons wishing to participate as a party to the proceedings shall file with the cabinet an original and one (1) copy of the following for each affected application and serve copies on all other known parties to the proceedings:
(a) OHP - Form 3, Notice of Appearance, incorporated by reference in 900 KAR 6:055;
(b) OHP - Form 4, Witness List, incorporated by reference in 900 KAR 6:055; and
(c) OHP - Form 5, Exhibit List, incorporated by reference in 900 KAR 6:055 and attached exhibits.
(8)(a) If a hearing is requested on an application which has been deferred from a previous cycle and for which a hearing had previously been scheduled, parties shall:
1. File a new OHP - Form 3, Notice of Appearance; and
a. Incorporate previously-filed witness lists (OHP - Form 4) and exhibit lists (OHP - Form 5); or
b. File an amended OHP - Form 4 and OHP - Form 5.
(b) A new party to the hearings shall file an original OHP - Form 3, OHP - Form 4, and OHP – Form 5.
(c) Forms shall be filed in accordance with subsection (7) of this section.
(9) The hearing officer shall convene the hearing and shall state the purpose and scope of the hearing or the issues upon which evidence shall be heard. All parties appearing at the hearing shall enter an appearance by stating their names and addresses.
(10) Each party shall have the opportunity to:
(a) Present its case;
(b) Make opening statements;
(c) Call and examine witnesses;
(d) Offer documentary evidence into the record;
(e) Make closing statements; and
(f) Cross-examine opposing witnesses on:
1. Matters covered in direct examination; and
2. At the discretion of the hearing officer, other matters relevant to the issues.
(11) A party that is a corporation shall be represented by an attorney licensed to practice in the Commonwealth of Kentucky.
(12) The hearing officer may:
(a) Allow testimony or other evidence on issues not previously identified in the preliminary order which may arise during the course of the hearing, including any additional petitions for intervention which may be filed;
(b) Act to exclude irrelevant, immaterial, or unduly repetitious evidence; and
(c) Question any party or witness.
(13) The hearing officer shall not be bound by the Kentucky Rules of Evidence. Relevant hearsay evidence may be allowed at the discretion of the hearing officer.
(14) The hearing officer shall have discretion to designate the order of presentation of evidence and the burden of proof as to persuasion.
(15) Witnesses shall be examined under oath or affirmation.
(16) Witnesses may, at the discretion of the hearing officer:
(a) Appear through deposition or in person; and
(b) Provide written testimony in accordance with the following:
1. The written testimony of a witness shall be in the form of questions and answers or a narrative statement;
2. The witness shall authenticate the document under oath; and
3. The witness shall be subject to cross-examination.
(17) The hearing officer may accept documentary evidence in the form of copies of excerpts if:
(a) The original is not readily available;
(b) Upon request, parties are given an opportunity to compare the copy with the original; and
(c) The documents to be considered for acceptance are listed on and attached to the party's Exhibit List (OHP - Form 5) and filed with the hearing officer and other parties at least:
1. Seven (7) days before the hearing for formal review applications; or
2. Five (5) days before the hearing for nonsubstantive review applications.
(18) A document shall not be incorporated into the record by reference without the permission of the hearing officer. Any referenced document shall be precisely identified.
(19) The hearing officer may take official notice of facts which are not in dispute or of generally-recognized technical or scientific facts within the agency's special knowledge.
(20) The hearing officer may permit a party to offer, or request a party to produce, additional evidence or briefs of issues as part of the record within a designated time after the conclusion of the hearing. During this period, the hearing record shall remain open. The conclusion of the hearing shall occur when the additional information is timely filed or at the end of the designated time period, whichever occurs first.
(21) In a hearing on an application for a Certificate of Need, the hearing officer shall, upon the agreement of the applicant, continue a hearing beyond the review deadlines established by KRS 216B.062(1) and 216B.095(1).
(22) If all parties agree to waive the established decision date, the hearing officer shall render a decision within sixty (60) days of the filing of proposed findings.
(23) The cabinet shall forward a copy of the hearing officer's final decision by U.S. mail to each party to the proceedings. The original hearing decision shall be filed in the administrative record maintained by the cabinet.
Section 4. Show Cause Hearing. (1) The cabinet may conduct a show cause hearing on its own initiative or at the request of an affected person, to include hearings requested pursuant to Humana of Kentucky v. NKC Hospitals, Ky., 751 S.W.2d 369 (1988), in order to determine if a person has established or is operating a health facility or health service in violation of the provisions of KRS Chapter 216B or 900 KAR Chapter 6 or is subject to the penalties provided by KRS 216B.990 for specific violations of the provisions of KRS Chapter 216B.
(2) Unless initiated by the cabinet, in order for a show cause hearing to be held, a request for a show cause hearing submitted by an affected person shall be accompanied and corroborated by credible, relevant, and substantial evidence, including an affidavit or other documentation which demonstrates that there is probable cause to believe that a person:
(a) Has established, or is operating, a health facility or health service in violation of the provisions of KRS Chapter 216B or 900 KAR Chapter 6; or
(b) Is subject to the penalties provided by KRS 216B.990 for specific violations of the provisions of KRS Chapter 216B.
(3) Based upon the materials accompanying the request for a show cause hearing, the cabinet shall determine if sufficient cause exists to conduct a hearing.
(4) The cabinet shall conduct a show cause hearing based on its own investigation pursuant to an annual licensure inspection or otherwise which reveals a possible violation of the terms or conditions which are a part of a Certificate of Need approval and license.
(5) The cabinet shall also conduct a show cause hearing regarding terms and conditions which are a part of a Certificate of Need approval and license at the request of any person.
(6) The show cause hearing regarding the terms and conditions shall determine whether a person is operating a health facility or health service in violation of any terms or conditions which are a part of that Certificate of Need approval and license.
(7) Show cause hearings shall be conducted in accordance with the provisions of Section 3 of this administrative regulation.
(8) If a show cause hearing is held, the individual or entity alleged to be in violation of KRS Chapter 216B shall have the burden of showing that the individual or entity:
(a) Has not established or is not operating a health facility or health service in violation of the provisions of KRS Chapter 216B or 900 KAR Chapter 6; or
(b) Is not subject to the penalties provided by KRS 216B.990 for specific violations of the provisions of KRS Chapter 216B.
(9) If it is alleged that an office or clinic offering services or equipment covered by the State Health Plan was established or is operating in violation of KRS 216B.020(2)(a), the hearing officer shall base his or her proposed findings of fact, conclusions of law, and proposed decision on whether the clinic or office meets the physician exemption criteria set forth in 900 KAR 6:130, Certificate of Need criteria for physician exemption.
(10) Prior to convening a show cause hearing, the cabinet shall give the person suspected or alleged to be in violation not less than twenty (20) days' notice of its intent to conduct a hearing.
(11) The notice shall advise the person of:
(a) The allegations against the person;
(b) Any facts determined to exist which support the existence of the allegation; and
(c) The statute or administrative regulation alleged to have been violated.
(12) Notice of the time, date, place, and subject matter of each hearing shall be:
(a) Mailed to all known affected persons or entities not less than ten (10) business days prior to the date of the hearing; and
(b) Published in the Certificate of Need Newsletter, if applicable.
(13) At least seven (7) days prior to all hearings required or requested pursuant to KRS Chapter 216B, with the exception of hearings involving applications for or revocation of a Certificate of Need, all persons or entities wishing to participate as a party to the proceedings shall file an original and one (1) copy of the following with the cabinet and serve copies on all other known parties to the proceedings:
(a) OHP - Form 3, Notice of Appearance;
(b) OHP - Form 4, Witness List; and
(c) OHP - Form 5, Exhibit List and attached exhibits.
(14) Within thirty (30) days of the conclusion of the hearing, the hearing officer shall tender findings of fact and a proposed decision to the secretary.
(15) Within thirty (30) days of the receipt of the findings of fact and proposed decision from the hearing officer, the secretary shall issue a final decision on the matter.
(16) A copy of the final decision shall be mailed to the person or his legal representative with the original hearing decision filed in the administrative record maintained by the cabinet.
(17) If a violation is found to have occurred as a result of a show cause hearing conducted pursuant to subsection (1) of this section, the cabinet shall take action as provided by KRS Chapter 216B.
(18) If the person is found to have violated any of the terms or conditions of any Certificate of Need approval and license as a result of a show cause hearing conducted pursuant to subsection (4) of this section, the cabinet shall take the following action:
(a) If the person had not previously been found to be in violation of the terms and conditions which were made a part of the person's Certificate of Need approval and license, the person shall be given a period of time, not to exceed sixty (60) days after issuance of the cabinet's decision, in which to demonstrate that the violation has been corrected. At the conclusion of this period, the cabinet shall verify that the facility or service is operating in compliance with the terms or conditions of the Certificate of Need and license at issue.
(b) If the cabinet is unable to verify that the facility or service has corrected the violation in accordance with paragraph (a) of this subsection, or if a person who had previously been found to be in violation of the terms and conditions which were a part of the person's Certificate of Need approval and license is found in a subsequent show cause hearing conducted pursuant to this section to be in violation of the terms and conditions again, the matter shall be referred to the Office of Inspector General for appropriate action.
(19) The deadlines established with respect to hearings shall be modified if agreed to by all parties and the hearing officer. (36 Ky.R. 244; Am. 811; eff. 10-21-2009; 39 Ky.R. 331; 807; 982; eff. 11-9-12.)