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Frequently Asked Questions

  • What role does the Department of Health (DOH) play when a hospital is sold?

The Department of Health may conduct two different reviews when a hospital is sold. The first, Certificate of Need review, takes place whenever a hospital is sold. The second, a hospital conversion review, takes place when a for-profit business purchases a non-profit hospital. The proposed sale of Empire Health System (Deaconess Hospital and Valley Medical Center) would require both reviews. All information provided by the applicants or in public testimony is independently verified.

  • How is it determined when these reviews are necessary?

    Certificate of Need: This process occurs whenever a hospital is sold. It does not matter if the buyer or seller is for profit or non-profit. It applies whether the entire hospital or only a part of the hospital is sold.

    Hospital Conversion: A review under the hospital conversion law occurs when a for-profit business seeks to purchase a non-profit hospital. This occurs when the change in ownership involves at least 20 percent of the assets or when it would give the acquiring owner control of more than 50 percent of the hospital’s assets.
     
  • Which review will be triggered with the sale of Empire Health?

    The sale of the Empire Health System hospitals to a for-profit company will trigger a hospital conversion review. The sale of the hospitals also requires a Certificate of Need CON) review.
     
  • How long will the conversion review take and will the public have a chance to comment?

    The conversion review will take about 6-8 months and involve a public hearing. The hearing will be advertised in advance.
     

  • What information will the Department of Health consider during the Hospital Conversion review?

    The review will include the following legal criteria (RCW 70.45 and WAC 246-312):

    • Is the sale at fair market value? Financial information and prices independently verified.

    • Are there any conflicts of interest?

    • An unrelated non-profit organization controls the proceeds of the sale; the proceeds must be used for charitable health purposes consistent with the hospital’s original purpose.

    • Will doctors maintain hospital privileges?

    • Are health research and education programs maintained?

    • Will there be access to affordable care or alternative care?

    • Is the new owner committed to care for the disadvantaged and uninsured?

    • If done by the facility, a review of the last two years community health assessments conducted by Empire Health.

    • Labor contracts are not part of the conversion review.
       

  • What are the possible conclusions the department could come to?

    The hospital conversion review can result in approval as submitted, approval with changes or conditions, or disapproval. A change, for example, could be to add the requirement to continue a service that the purchaser was proposing to drop. A condition could require a minimum composition of the non-profit board.
     
  • How long will the Certificate of Need review take and will the public have a chance to comment?

    The review could be as short as four months under expedited review. This review could be done at the same time as the hospital conversion review.
    The review does not include a public hearing. However, written comments from the public are considered as testimony in the Certificate of Need hearing.
     
  • What will be looked at in the Certificate of Need review?

    The review process is outlined in RCW 70.38 and WAC 246-310. These help ensure:

    • Continued access to services.

    • Continued access to care for Medicare, Medicaid and low income patients.

    • Charity care.

    • The buyer can meet short and long-term financial obligations.

    • The project financing is reasonable.

    • The buyer has a history of quality care.

    • There is no better, practical alternative.
       

  • What are the possible decisions the department could make?

    As with the conversion process, the review can result in approval as submitted, approval with changes or conditions or disapproval. For example, a change could modify the admittance policy to increase access to financial support by indigent persons. A condition could require the buyer to provide the average regional level of charity care.
   

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Washington State Department of Health
Certificate of Need Program
Office of Certification & Enforcement

Mailing Address:
 P.O. Box 47852
Olympia, WA 98504-7852

Physical Address:
310 Israel Rd SE
Tumwater, WA 98501

Phone: (360) 236-2955
Fax: (360) 236-2901

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Last Update : 10/28/2008 01:04 PM
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