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NEW DoN REGULATIONS LIFT 20 YEAR MORATORIUM ON ASCs

January 2017

 

New Determination of Need (DoN) regulations effective January 27, 2017 eliminate a 20-year moratorium on free-standing ambulatory surgery centers in the Commonwealth and will allow all currently licensed ASC’s to apply for a DoN certificate without affiliation or in a joint venture with an acute care hospital.  The affiliation/joint venture provision was a requirement of draft regulations but was eliminated from the final regulations after strong opposition from the MAASC, physicians, and insurers.

 

The new DoN regulations are consistent with the Department of Public Health’s desire to acknowledge the important cost-saving contributions that the more than 50 existing freestanding ASCs within the Commonwealth have and continue to provide, support community hospitals, and incentivize the formation of value-driven and patient-centered ACOs. The regulations put freestanding ASC’s and Hospital Outpatient Departments (HOPD’s) on a level playing field for DoN purposes, a longstanding goal of the MAASC.

 

Specifically, all existing facilities are grandfathered in and allowed to apply for a DoN without affiliation or in a joint venture with an acute care hospital. Multi-specialty facilities are allowed to add a new service line, expand the facility and transfer ownership.  Same for single specialty facilities but those wishing to become multi-specialty would have to affiliate with a Health Policy Commission certified Accountable Care Organization (ACO). Construction of a free-standing ASC at a new location must be done by an Applicant working either in joint venture with an HPC-certified ACO or by an existing independent community hospital. Additionally, any entities seeking to locate a new free-standing ASC location within the primary service area of one of the Commonwealth’s 10 remaining independent community hospitals (i.e. independent, non-affiliated), the entity would be required to either obtain a letter of support from the independent community hospital, or engage in a joint venture/affiliation with the independent community hospital. It should be noted that according HPC’s Massachusetts Hospital Cohort Designation and Affiliation Status, only 10 independent community hospitals are currently in operation, limiting this provision’s scope. Lastly, the new regulations simplify and speed up the DoN process for all applicants.

 

Here's a link to the final DoN regulations, the DPH staff memo, and a two page summary of the DoN program:

www.mass.gov/eohhs/gov/laws-regs/dph/proposed-regulations/determination-of-need.html

 

DPH will be fine-tuning the application form and process over the coming months. An updated application form as well as new DoN Guidelines are posted at this link: www.mass.gov/dph/don

 

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