New Certificate of Need (CON) regulations recently became effective that permit, for the first time, the reallocation, relocation, or redistribution of acute care beds and certain pieces of major medical equipment from one hospital to another hospital within an 'established Article 28 network.' The regulations do not permit the movement of beds between acute care facilities and nursing homes in a network. The regulations define an 'established Article 28 network' as an arrangement in which operating authority 'is legally delegated to a corporation or other entity by hospitals participating in such arrangement and in which the corporation or other entity has received establishment approval' by the Public Health Council as operator or co-operator of the participating hospitals.

Prior to the effective date of these new regulations, projects to increase bed capacity or to acquire certain medical equipment, through relocation or movement, required a CON. The new regulations require that, prior to relocating the beds or equipment, the applicant submit a letter to the New York State Department of Health (DOH) Bureau of Architectural and Engineering Review advising DOH of the proposed movement of beds or equipment. DOH is required to notify the applicant within 30 days regarding whether or not the proposal is acceptable. If DOH determines that the proposal is unacceptable, the application will be deemed to be a CON application subject to either administrative review or full review.

Active Model/Corporate Merger: The term 'established Article 28 network' includes the 'active model,' in which the network takes an active role in the functions and operations of member facilities, and the corporate merger, in which a single, new entity is formed when two or more formerly independent entities are joined.

Passive Parent: Although it does not specifically use the term 'passive parent,' the Regulatory Impact Statement indicates that the new regulation does not apply to an arrangement between health care facilities if that arrangement does not involve delegating certain functions to the network entity; therefore the network does not play a significant role in the day-to-day operations of the facility. These arrangements are commonly known as 'passive parent' arrangements. This is also indicated in the report of the State Hospital Review and Planning Council Workgroup on Network Development, released in 1998, which states that the term 'established Article 28 network' does not include 'passive parent' arrangements. For a copy of the regulations, call Olivia Segree at GNYHA.