To the extent the provision for appropriateness review encourages this unauthorized and improper practice, it should be deleted. 3. The planning process should be phased in, - As this Committee is well aware, the Planning Act has imposed a huge burden upon the local and state planning agencies, both because of the complexity of the Act's procedural requirements and because of the scope of the health plans required. The planning agencies now are in the throes of developing the health systems plans and the state plans a process that has proved more difficult than was originally contemplated. And there are few people qualified to do this job. 'At the same time, the planning agencies are being required to act on applications for approval of new services and purchases of equipment. As a result, the planning agen cies are fully occupied just in keeping the paper flowing. They have not had a chance to sort out their priorities, to develop effective administrative procedures, and to make the basic policy judgments which are a necessary precondition of any effective planning. It is, therefore, questionable whether the planning agencies are prepared to implement the Act in its present form in the foreseeable future. We would propose, therefore, that the Planning Act be limited to expenditures above a specified substantial amount, for instance $1,500,000, for a transitional period of two years. 4. The certificate of need requirement should As a As this Committee is well aware, one of the major loopholes and counter-productive features of the existing Act has been the interpretation by HEW that it applies to the purchase of medical equipment only by institutional providers. result of this, there has been a proliferation of equipment located outside and independent of hospitals. Because physicians' offices and clinics are considered not to be included within the Act, they have been able to purchase expensive equipment free of review by the planning agencies. As a result, equipment which rightfully should be centralized for the use of the whole community in the hospital is being dispersed in a number of unnecessary and duplicative facilities. The Act should be amended to make it clear that all purchasers of equipment are equally subject to planning review. We understand Section 218(b) of the Bill to be intended to make that change, and we heartily support that intent. We believe, however, that the provision can be written more clearly. The proposed amendment to Section 1523 (a) (4) (B) refers to the "offering and development within the state of ... major medical equipment." This is not clear; one does not offer major medical equipment (unless he is an equipment manufacturer). Perhaps the word "use" should be added to make clear the intent 5. Used equipment should be exempted from We support the concept of proposed new Section 1531 (6) which will exempt from the capital expenditures subject to planning review those used to obtain "an existing health care facility the services or bed capacity of which is not changed in being so obtained." We would propose two amendments to strengthen this provision: (a) It should apply to equipment, as well as to a facility, so as to promote a market in existing equipment, and encourage (and enable) providers with excess or duplicative equipment to sell it. */ As discussed above, moreover, the proposed language also should be amended to stipulate that the provision only applies to new equipment and not to equipment currently in use. (b) The provision should apply if the services or bed capacity of the purchased facility are decreased, as often occurs in mergers, as well as if they remain constant. The word "changed" should be changed to "increased." 6. The ability of planning agencies to take We have received numerous reports that planning agencies are using their authority to approve new institutional health services to make other changes in a hospital that they are not authorized to require. This tendency poses a host of problems. For instance, an HSA may refuse to approve the purchase of new X-ray equipment unless a hospital agrees to close its obstetrical service, or an HSA may not approve what it considers to be a new service because the hospital has refused to enter into a merger which the HSA for its own reasons is encouraging. In effect, one of the major abuses of the Planning Act that is coming to be generally recognized is the fact that the planning agencies have the authority to coerce hospitals into doing things that planning agencies do not have the authority to require directly. If Congress wishes planning agencies to have the authority to close beds and terminate services, it should provide so directly (as H. R. 10460 proposes), and as a necessary corollary of doing so require them to assume operational control and moral and financial responsibility for the facilities. We do not believe Congress wishes the planning agencies to have that authority. If so, it should make certain that the planning agencies do not arrogate to themselves that authority by their use of what authority they do have. Planning agencies should not be permitted to use their authority as a club to force hospitals into taking actions that they are not authorized to require. We believe, therefore, that the following language should be added to Sections 1513 and 1523 of the Act: "The review by an agency or State Agency of any new 7. Local and state planning should be protected As we understand the intent of this Committee, the Planning Act is designed to provide a system by which planning decisions will be made by local agencies attuned to the needs of the community. In point of fact, however, the local planning agencies have little real power; their authority is only to make recommendations, and the final determination is made by the state agencies. Furthermore, both the local and state agencies are subject to the final authority of HEW authority that is vaguely defined and essentially unlimited as a practical matter. We believe that HEW's power over the local and state planning - agencies should be lessened and that its authority should be more precisely delineated. of provisions of the Act: This concern is raised by a number |