12VAC5-230-530. Need for new service.

A. No new inpatient beds should be approved in any health planning district unless:

1. The resulting number of beds for each bed category contained in this article does not exceed the number of beds projected to be needed for that health planning district for the fifth planning horizon year; and

2. The average annual occupancy based on the number of beds in the health planning district for the relevant reporting period is:

a. 80% at midnight census for medical/surgical or pediatric beds;

b. 65% at midnight census for intensive care beds.

B. For proposals to convert under-utilized beds that require a capital expenditure of $15 million or more with an expenditure exceeding the threshold amount as determined using the formula contained in subsection C , consideration may be given to such proposal if:

1. There is a projected need in the applicable category of inpatient beds; and

2. The applicant can demonstrate that the average annual occupancy of the converted beds would meet the utilization standard for the applicable bed category by the first year of operation.

For the purposes of this part, "underutilized" means less than 80% average annual occupancy for medical/surgical or pediatric beds, when the relocation involves such beds and less than 65% average annual occupancy for intensive care beds when relocation involves such beds.

C. The capital expenditure threshold referenced in subsection shall be adjusted annually using the percentage increase listed in the Consumer Price Index for All Urban Consumers (CPI-U) for the most recent year as follows:

            A x (1+B)

            Where"

            A = the capital expenditure threshold amount for the previous year

            And

            B = the % increase for the expense category "Medical Care" listed in the most recent year available of the CPI-U of the US Bureau of Labor Statistics.

12VAC5-230-760. Project need.

A. All applications involving the expenditure of $15 million or more with an expenditure exceeding the threshold amount as determined using the formula contained in subsection B by a medical care facility should include documentation that the expenditure is necessary in order for the facility to meet the identified medical care needs of the public it serves. Such documentation should clearly identify that the expenditure:

1. Represents the most cost-effective approach to meeting the identified need; and

2. The ongoing operational costs will not result in unreasonable increases in the cost of delivering the services provided.

B. The capital expenditure threshold referenced in subsection shall be adjusted annually using the percentage increase listed in the Consumer Price Index for All Urban Consumers (CPI-U) for the most recent year as follows:

            A x (1+B)

            Where:

            A = the capital expenditure threshold amount for the previous year

            And

            B = the % increase for the expense category "Medical Care" listed in the most recent year available of the CPI-U of the US Bureau of Labor Statistics.