Introduction

The Delaware Certificate of Public Review (“COPR”) program is defined by the Delaware Department of Health and Social Services as:

A review process used to assure that there is continuing public scrutiny of certain healthcare developments which could negatively affect the quality of healthcare or threaten the ability of healthcare facilities to provide services to the medically indigent.  This public scrutiny is focused on balancing concerns for access, cost, and quality.[1]

Delaware first passed its COPR statute in 1978 to comply with a then existing federal law requiring state certificate of need (“CON”) statutes designed to improve the delivery of healthcare.[2]  The federal law was, “based on the economic assumption that excess healthcare capacity directly results in healthcare price inflation.”[3]

Delaware Health Resources Board

The Delaware Health Resources Board (the “Board”) was established by statute to, “foster the cost-effective and efficient use of healthcare resources and the availability of and access to high quality and appropriate healthcare services.”[4]  The Board’s fifteen members are appointed by the Governor and carry out duties and responsibilities which include development of Delaware’s Health Resources Management Plan, assessment of the supply of healthcare resources, review of COPR applications, and issuance of decisions on those applications.[5]

Requirements

Activities subject to the COPR process include:

The construction, development or other establishment of a healthcare facility or the acquisition of a nonprofit healthcare facility; any expenditure by or on behalf of a healthcare facility in excess of $5.8 million; a change in bed capacity of a healthcare facility which increases the total number of beds (or distributes beds among various categories, or relocates such beds from one physical facility or site to another) by more than 10 beds or more or more than 10 percent of total licensed bed capacity, whichever is less over a two year period; the acquisition of major medical equipment, whether or not by a healthcare facility and whether or not the acquisition is through a capital expenditure, an operating expense or a donation. [6]

 The replacement of major medical equipment with similar equipment is not subject to review by the Board.  “Major medical equipment” is defined as follows:

A single unit of medical equipment or a single system of components with related functions which is used for the diagnosis or treatment of patients and which:  (a) entails a capital expenditure as set forth in this chapter which exceeds $5,800,000 or some greater amount which has been designated by the Board following an annual adjustment for inflation; (b) represents medical technology which is not yet available in Delaware; or (c) represents medical technology which has been designated by the Board as being subject to review.[7]

The following medical technologies have been designated by the Board as being subject to review per subsection (c) above:

  • Cardiac Catheterization
  • Megavoltage Radiation Therapy
  • Extracorporeal Shock Wave Lithotripsy
  • Positron Emission Tomography (PET)[8]

Criteria

Per 16 Del. C. §9306, the Board considers the following seven statutorily-mandated criteria in assessing applications for a COPR.

  1. The relationship of the proposal to the Health Resources Management Plan;
  2. The need of the population for the proposed project;
  3. The availability of less costly and/or more effective alternatives to the proposal, including alternatives involving the use of resources located outside the state;
  4. The relationship of the proposal to the existing healthcare delivery system;
  5. The immediate and long-term viability of the proposal in terms of the applicant’s access to financial management and other necessary resources;
  6. The anticipated effect on the proposal on the cost of and charges for healthcare; and
  7. The anticipated effect of the proposal on the quality of healthcare.

Procedures

The COPR process includes the following steps:

  1. Applicant files a notice of intent.
  2. Applicant files the COPR application.  When the Board determines the application to be complete, a notification is provided to applicant regarding the commencement of its review.
  3. At the Board’s initial meeting to consider the application, an overview is presented by the applicant and an opportunity is provided for questions from the Board.  At this meeting the application is generally assigned to a Review Committee appointed from Board members.
  4. If a public hearing is requested by the applicant, this is conducted by the Review Committee.
  5. The Review Committee meets with the applicant and deliberates as necessary to formulate a recommendation to the Board.
  6. The Review Committee report is submitted to the Board.  The Board renders a decision.  From the date of initial notification, the maximum review period is generally no more than ninety days.  There may be exceptions, such as where a public hearing is requested by the applicant, or where it is mutually acceptable to the Board and the applicant.[9]

Application Fees

COPR applications require submission of an application filing fee.  The present fees are set forth in 16 Del. C. § 9305, as follows:

Capital Expenditures Application Fee
Less than $500,000 $100
$500,000-$999,999 $750
$1,000,000-$4,999,999 $3,000
$5,000,000-$9,999,999 $7,500
$10,000,000 and over $10,000

Filing fees are due on or before thirty days after the date of notification of the beginning of review.  This due date may be extended up to ten additional days at the discretion of the Board.  Applications for which filing fees have not been paid within this timeframe are considered withdrawn.[10]

Recourse Upon Application Rejection

In the event an application is rejected, an applicant may, for good cause shown, request a public hearing for purposes of reconsideration.[11] A request for public hearing shall be deemed by the Board to have shown good cause if it presents “newly discovered, significant, relevant information not previously available or considered by the Board; and demonstrates that there have been significant changes in factors or circumstances relied upon by the Board in reaching its decisions; or demonstrates that the Board has materially failed to follow its adopted procedures in reaching its decision.”[12]  A request for such a hearing must be received within ten days of the decision.  The hearing shall commence within forty-five days of the request.

Following completion of the hearing, the Board shall, within forty-five days, issue its written decision which will set forth the findings of fact and conclusion of law upon which its decision is based.[13] A Board decision following either review of an application, administrative reconsideration, or the denial of a request for extension of a COPR, may be appealed within thirty days to the Superior Court.[14]

Analysis

A number of states, including Pennsylvania, have ended their certificate of need programs.  Critics of such programs question whether it is a state government’s proper role to interfere in the market if private capital and/or healthcare institutions wish to risk their resources to build new facilities and/or provide new services.  Additionally, some analysts have argued that Delaware’s COPR process has acted as a barrier to competition and, as a net result, services are now overpriced and less competitive from a quality of outcome perspective.

Currently, according to the Kaiser Family Foundation, Delaware ranks third among the states in healthcare expenditures per capita.[15]  Delaware ranks fourth in hospital-adjusted expenses per day and third in Medicaid physician fees relative to the nation and in Medicaid spending per age elderly enrollee.[16] The data makes clear that Delaware must continue to focus on reducing healthcare costs, and the debate about the effectiveness and necessity of the COPR program will undoubtedly continue.

Helpful Links

 

Endnotes:

[1] https://www.dhss.delaware.gov/dhss/dhcc/hrb/cprphome.html

[2] Will Delaware’s Certificate of Need Law Fall in 2021? Owens, J., Delaware Business Times, September 29, 2020.

[3] Will Delaware’s Certificate of Need Law Fall in 2021? Owens, J., Delaware Business Times, September 29, 2020.

[4] 16 Del. C. §9303(a).

[5] 16 Del. C. §9303(d).

[6] 16 Del. C. §9304.

[7] 16 Del. C. §9302.

[8] 16 Del. C. §9302(6)(c).

[9] 16 Del. C. §9305.

[10] 16 Del. C. §9305(10).

[11] 16 Del. C. §9305(7).

[12] 16 Del. C. §9305(7).

[13] 16 Del. C. §9305(7).

[14] 16 Del. C. §9305(8).

[15] Now’s our Chance to Get Rid of Unnecessary, Costly Certificate of Need Law, C. Cassells and S. Beck, Delaware Online, March 6, 2020.

[16] Now’s our Chance to Get Rid of Unnecessary, Costly Certificate of Need Law, C. Cassells and S. Beck, Delaware Online, March 6, 2020.